Warehouse is the most critical stage of the site fulfilment chain. It is responsible for many activities such as inventory management, storage and handling, order fulfilment and many more. If the workflow is not in order, then that will directly affect a brand and can result in negative impact on customers. Retail warehouse audit is an annual inspection process which is conducted to determine the performance and efficiency. It takes an in-depth observation of all the operations, processes, calculating performances, equipment etc. Every private labelled brand and company performs this audit annually or in every six months. It is a crucial process which ensures that warehouse is working with full potential, following all protocols, and is working with expected efficiency. It gives the opportunity to spot gaps and potential issues so that one can work to upgrade it and maintain a progressive workflow. An overall audit helps to dig up the process completely and then come up with suitable strategies to enhance workflow.
Operational efficiency: Operational efficiency is basically enhancing the work process and producing a high-quality service or product without wasting any effort, time, and resources. This will help reduce waste and enhance productivity. This can be enhanced by setting up dashboard and monitoring it on a weekly basis. Setting up benchmarks for one’s work helps to analyse one’s position with respect to the competition.
Inventory accuracy: Inventory management is very crucial for any business specially if it is a product-based company. Improper inventory can disappoint the customer. If a potential new customer places an order and the company is unable to fulfil its requirement due to lack of a reliable inventory track, then it can result in highly disappointed customer who may not return to the brand. Therefore, regular inventory audit should be done to avoid discrepancy by measuring the difference between recorded inventory and actual inventory using the following formula:
Inventory accuracy = (Recorded inventory/actual stock) x 100
Compliance and risk management: The process of detecting and evaluating the financial losses, material losses, and legal repercussions that may result from a company failing to comply with specific laws and regulations is known as compliance risk management. There are six major areas where this focuses on: privacy breaches, environment and sustainability concerns, corrupt and illegal practices, process risks, health and safety, and employee behaviour. By timely doing audit of compliance and risk management, a fashion brand can avert costly penalties, protect its brand reputation, maintain consumer trust, ensure sustainable sourcing practices, and successfully navigate ever-evolving industry regulations and standards.
Continuous improvement: Warehouse works with a specific supply chain model. Not all brands have automated their supply chain making it a labour extensive sector. Since most of the work is still manual, and humans have a propensity for error, by regularly inspecting the warehouse and revealing inefficiencies, one can take measures to establish sustainable standards for enhancing the process. And this process of improvement has to be continuous.
Cost Control: During audits, the costing of the full process is inspected thoroughly. Only the necessary components that are employed in the most effective manner are included in the production and sales costs. It also helps to understand the concept of overstocking, underutilised space, and unused equipment. If these parameters are taken care of, it can help to increase profitability.