The logistics audit is a logistical diagnostic that concerns a particular field of a company’s logistics and that aims to deal with an organizational dysfunction and improve the company’s performance in general. We’ll tell you all about the essentials of the logistics audit to implement in order to optimize your business strategy.
Why Conducting a Logistics Audit Is Essential
A logistics audit is used to measure the company’s performance and concerns all its skills or only some part of the logistics system. During a logistics audit, the proper implementation of a certain number of processes is verified and validated, similar to a quality audit. Grades or points can be assigned to the process. The logistics audit is articulated with the organization’s logistics strategy and depends on the company’s overall strategy.
Measuring the performance of the logistics function therefore allows a company:
- To ensure that all methods and procedures are implemented to control the costs of transportation, stock, or storage.
- To ensure the optimization of methods for high-quality customer service.
- To ensure the proper level of trust and cooperation between the different organizations that intervene throughout the supply chain. By measuring this specific point and sharing the results with the employees, the company can optimize its long-term strategy as a team.
The goals of a logistics audit for a company
The audit – a professional examination based on techniques of identifying and evaluating deviations from norms and objectives – has different goals:
- Analyzing an existing situation compared to a benchmark;
- Identifying deviations and dysfunctions compared to this benchmark;
- Proposing recommendations and areas of improvement to address perceived deviations.
How to optimize your business strategy with a logistics audit
- To conduct a relevant and effective logistics audit, it’s first necessary to understand and familiarize yourself with the mission assigned to the logistics department within the company in question. It’s also necessary to perform an evaluation of the company’s competitive positioning and the place given to service, innovation, target markets, or its range. Indeed, many factors can vary the missions assigned to the logistics department.
- Another important factor to consider during a logistics audit is the final sales price of the products and services marketed by the company. Indeed, the ratio of the sales price to the related logistics costs has a major impact.
The Logistics Benchmark for the Logistics Audit
To be able to perform a diagnostic, it’s necessary to rely on an internal benchmark that can be edited directly in house or by external consulting firms. That way, it’s possible to compare your own performance with that of your competitors. Based on these results, a company can identify areas of progress. A logistics benchmark is also a great way to gather information about the competition legally without needing to rely on an illegal method of obtaining information.
Once possible improvements and obstacles to better logistical organization have been identified, it’s possible – even necessary – to develop a solid action plan to plan all the elements and actions to be implemented in order to achieve the goals. Finally, for the plan to be successful, the methods must be clearly identified, and the procedures must be simple to apply. Of course, each person’s role must also be carefully decided and defined.