Wish I Had Known About Lean Auditing Way Back
A business strategy named Lean auditing is a systematic way of focusing on the working principles of how everything in being done in order to satisfy the customers especially when it comes to the way of creating value for customer. Lean is a strategic path of how one can eliminate waste production. If any company’s business model is designed in a way that it prioritizes the customer first by putting the maximum possible value for the customer at the minimum possible risks and efforts. In order to implement lean either in your manufacturing or in your auditing technique, one must know where your current situation exists.
Key Principles of Lean
The key principles of lean methodologies revolves all around eliminating or minimizing waste (muda). Have a look at key principles of Lean listed below.
- From the Eyes Of End Customer
Put your thinking caps on and investigate what your end customer wants from you? After investigation, look into the ways how such end results can be accomplished.
Gemba or Go See gives eyes to see what is happening in your organization and around your workplace.
- Value Addition
In order to look into how one can add value, one must be able to identify non-value addited tasks and this can be done by recognizing waste in your process stream leading to final product. For better understanding of waste following factors are considered as muda (waste) are waiting, product rework, products’ rejection, bottlenecks etc.
- Perfection at its Best
By making use of quality control techniques like Just In Time (JIT), Error proofing and design automation one must be able to achieve clear objectives and definite time bound measures.
Why Lean Auditing is Done?
In order to ensure that manufacturing company is following and has embedded lean manufacturing techniques in its business flow, one must be able to clear Lean Audit.
Result Oriented Culture
By developing an audit culture, your team becomes more focused on value addition by identifying the significance of stakeholders’ engagement in decision making process.
After deciding mission statement and motto, one must enlist all the goals of the organization along with key drivers that should be aligned with the goal.
Periodic Audits Schedule
Periodic audits should be assigned to different cross functional departments and ensure to make audit assignments completely resourced, time bound and according to available budget.
Audit Report Compilation
Audit reports must be made crisp, insightful and should contain points of all opportunities of improvement that are practical and easy to implement keeping business nature in mind.
The compliance of control processes should be properly streamlined and that could be able to provide benefit to the organizational values.
Return on Cost
Audit function should be able to vividly define the positive rate of return on its cost.
Step Wise Guide of Lean Auditing
Below are the steps being jotted down for your ease about lean auditing approach:
- Main Objective Identification
It is important to recognize your motto and mission and the reason of why are you doing your business. A lean audit determines whether your business exhibits proper implementation of lean methodologies and techniques. The analysis can be done to gauge the achievement of lean manufacturing and by analyzing how your company implements lean practices in manufacturing cycle with an aim to improve manufacturing procedures and products’ quality.
- Audit Planning
Do your homework before you come and sit in a meeting room to discuss audit outcomes. Please note that it is preferable if the audits are being performed by the autonomous third party auditors so that transparency can be ensured. Moreover, by getting being audited by third party opens many doors towards improvements by identifying opportunities to make one’s business shape in better position and also finding possible optimum solutions for potential loopholes existing in the current management system.
- Be Specific To Your Business Needs
An organization can be gauged by some unique criteria which other businesses might not follow or prefer to follow because of their separate needs and customers’ demands. The outcome of a lean audit should highlight any lacking point of the current management system and should highlight any loopholes that one came across while interviewing selective employees.
- Application of Lean Standards to Audit Procedure
Audit should be done in synchronization with lean practices but lean practices would be specified to the business type and nature. For safety concerns, make sure that safety labels and warnings should be vivid to at all the designated sensitive areas and tools should be placed at right place and in right quantity following 5S methodology.
- Follow up After Audit
A weekly review by leadership team or periodic internal audit on monthly basis supervised by department head should be conducted in order to ensure if lean standards are being followed or not in a correct way and how lean standards are impacting on daily industrial practices.
How Lean Applies to Internal Audit Practices?
The “Lean” strategy applies well to internal audit practices also. Getting audit engagements right, designing internal audit reports (audits reports should be crisp, to the point, and fruitful for making desired improvements in the system). Please note that anything found during audit that do not result in adding value to overall results must be replaced or eliminated depending on the situation as it will help you to make internal audit report more robust for the auditees. Lean audit approach is all about producing efficient outcomes in less time and with more accuracy without compromising on quality with a combination of other benefits like devising cost saving or cost effective solutions so that profit margins can be enhanced.