Warehouse Audit Guide, Complete Inventory Audit Checklist

Do you have any problem keeping up with your warehouse operations? People usually feel trapped doing the same processes with the same systems in the same way, but this does not have to continue. The solution is a warehouse receiving process checklist and report.
Everyone can use the warehouse audit to evaluate the operations and spend the limited time of warehouse management in the best way. This warehouse audit guide provides you with concepts and means to evaluate the operations and identify the most impactful opportunities.
Babak Heydari

Babak Heydari

February 11, 2022

What is Warehouse Audit Report?

The warehouse audit report is an assessment of all operations within the inventory. It helps identify the specific areas to concentrate on the operation's most impactful pain points. A warehouse audit report is a standard form for evaluating warehouse operations and facilities to control processes and run a set of essential audit points. The warehouse audit report evaluates all functions at a high level of standard. It pursues the audit points more deeply deemed pressing or lacking current operations. The audit report reviews best practices, equipment and resources, staff training, inbound and outbound processing, metrics and measurements, and organizational culture. A properly completed warehouse audit report provides a complete set of data to improve constantly. It includes order, productivity, inventory, and other operating parts. The warehouse audit covers each functional area, from receiving through shipping and inventory control. It should include:

  • Safety and security,

  • Inventory accuracy,

  • Productivity analyses,

  • Storage and handling equipment,

  • Logistical layout and material flow,

  • Facility current and optimum capacity,

  • Customer service performance metrics,

  • Identification of opportunities for improvement,

  • Systems functional capabilities and performance,

  • Comprehensive warehouse audit report with recommendations.

What are the Reasons for Conducting Warehouse Audits?

There are many reasons to run a warehouse audit regularly. These include setting sustainable standards and supplying access to reliable data. An audit helps inform strategic and managerial decisions and identify how to improve current operations or eliminate inefficiencies. A professional audit based on an inventory audit checklist can result in a warehouse audit report with suggestions for improving efficiency and sustainability. A warehouse audit begins with gathering quantitative and qualitative data from key stakeholders. The warehouse is the primary department for data collection and interviews in this process. However, other units may also be involved, including purchasing, production, customer service, and IT. They may provide helpful insight into any issues and benefit from the audit outcome. They analyze and interpret the collected data, and the analyzed information turns into an as-is process, with documents and flow maps to explain the entire process. They can help evaluate the process to identify inefficiencies and bottlenecks. Then the audit team offers recommendations, risk assessments, and actionable items on a warehouse receiving process checklist and report. The data from the warehouse audit is used as benchmarks to back up the findings and quantify costs and potential savings. The warehouse audit enables different people to evaluate operations with the same focus areas from diverse viewpoints. Diversely considering, approaching, and tackling the warehouse audit points improve the likelihood that pain points will be identified and opportunities will be presented for significant and marginal gains. Auditing the warehouse operations and processes is vital to maintaining the best operations. If you audit the warehouse operations regularly, it delivers results and ensures constant maintenance. The warehouse audit pinpoints the current state of operations and specific operation opportunities for improvements and cost savings. In addition to pinpointing where your warehouse operation excels and needs improvements, the warehouse audit helps prioritize the order to have future changes.

Warehouse Audit Report Scale

The warehouse audit report is easy to use and guides the auditing personnel to think about and assess impactful components of the warehouse operation. A warehouse audit report usually consists of several standards evaluated as: + Below Average, + Average, + Above Average.

Then beyond the simple ranking per point, detailed findings in each warehouse audit pinpoint why the corresponding rating was provided. The results must then note current pains and opportunities to improve per point. The simple warehouse audit report triggers the mind to justify the rating and explain how the operation can perform better. Concisely, the warehouse audit is an opportunity for every team to evaluate and improve operations, systems, and processes within warehouses.

Who Conducts Warehouse Audit?

Inventory Audit Checklist Example

Most of the time, skilled on-site staff and management or external warehousing and operations experts complete the warehouse audit report. Having external experts for auditing warehouse audits is more costly, but you receive better quality feedback and a more detailed report to determine existing pain points and best practices. If your team is highly skilled, your pain points are straightforward, or your revenue is meager, finishing the warehouse audit with on-site staff may be more effective. Whether performed by an internal agency or an outside entity, auditing personnel should be deeply knowledgeable on standard operating practices and related technologies. Even if external players are brought in for the audit, key stakeholders, such as managers, supervisors, and leads, must participate in the warehouse audit process. They ensure the auditors understand the operations, processes, and requirements they observe and use the warehouse receiving process checklist properly. They also provide their deep insight into the operations that they are intimately familiar with and ultimately ensure they buy into the feedback and guidance received from the warehouse auditing staff. The warehouse stakeholders are the only ones that fully understand operation requirements or limitations. Furthermore, they implement and maintain change, so their buy-in and expertise are necessary to realize value from a warehouse audit in the organization. Running a proper warehouse audit is much labor. Therefore, there are professionals to handle audits. If you already have many managing and overseeing operations at hand, you may want to outsource fulfillment to professionals, like Routetitan Inc. Routetitan consists of friendly engineers and creative designers, making last-mile delivery more sustainable and accessible for all.

When to Run Warehouse Audit Report?

You may run a warehouse audit report at any time. However, there are some moments when it is most impactful and makes the most sense for facilities to audit their operations thoroughly. The warehouse audit report brings the team a standard framework to identify opportunities across the current facility. It makes the most sense to do a warehouse checklist when the company needs directly or indirectly changes to occur. Similarly, it desires the most significant total influences when a company changes. The warehouse audit report ensures that the operation realizes the most significant impact from the changes. Companies should consider conducting warehouse audits when:

  • Undergoing pain points: The warehouse audit can assess operations and identify the root cause of current pains.

  • Evaluating growth prospects: The warehouse audit helps you decide where to concentrate on growth and prioritize opportunities.

  • Considering disruptive changes such as executing new technologies: The warehouse audit identifies opportunities and areas that need improvement in the current operation. Before executing disruptive changes, be sure to audit the entire operation to get the most out of your future trouble.

  • Over a fixed period, such as quarterly or annually: Regularly conduct a warehouse audit over a fixed period to ensure your operation is continually improving based on the identified pain points and goals. We recommend conducting a Quarterly Warehouse Audit of your operation.

Warehouse Audit Guide Step-by-Step

There are so many ways to audit warehouses, so this article offers a warehouse checklist consisting of seven stages to run a proper audit along with some effective practices.

Define the Requirements

Every warehouse audit starts with determining what is being audited. For example, a public firm may concentrate on inventory valuation for disclosing financial data; however, a private firm may focus more on operations efficiency. If you are handling an online business, you should ensure your warehouse audits are as efficient as possible, especially if your business is still new. It would be best if you looked for the best approaches to warehouse management.

Count the Inventory

In the second stage of the warehouse inspection checklist, you should make sure you have a proper system in place for accurate counts matching the quantities in your inventory solutions software. With proper inventory forms, you can track discrepancies and investigate where the issues are coming from.

Observe the Operations, Warehouse Audit Guide

Watch for the warehouse employees, inventory processes, order fulfillment, quality control, and other equipment like forklifts to ensure safety compliance and that your systems have maximum efficiency. You do not want to involve with OSHA (Occupational Safety and Health Administration) fines or likely lawsuits from injured employees. Health and safety warehouse processes always come first.

Talk to Inventory Staff

Now meet with workers across the warehouse to get feedback about different areas. The employees involved in all warehouse operations most likely know the inefficiencies within the processes. Use this knowledge as an opportunity; to learn what can be improved, which policies aren't compelling enough, and other valuable data about the warehouse.

Analyze Inventory Data

The warehouse is likely using software to manage operations, such as a warehouse management system. Use it to analyze inventory records, check for waste, validate transactions, and measure customer satisfaction.

Evaluate Warehouse Audit Guide Results

Once you have gathered enough audit data, you can identify processes or policies requiring modification within your warehouse space. The warehouse managers suggest improvements to increase productivity and efficiency using the gathered data. Work with the analysts to analyze the data and prepare your findings and suggestions.

Plan Required Changes and Implement

You should write down all changes and discuss them with the team. You also can take a two-phased approach doing this, including: + Phase 1: This can be the analysis phase, where your team finds significant issues that need to be fixed. + Phase 2: This can be the implementation phase, where you begin to fix the issues with input from main stakeholders.

However, keep in mind that warehouse audits should run regularly to keep the operations up. You may run an audit on a schedule depending on the size of the warehouse. Improvements are critical in every organization, and they have no end.

Inventory Audit Checklist Example

This section in the warehouse audit guide offers an example of a warehouse audit checklist to use as a starting point for your audit. You may adjust or expand its questions based on your warehouse layout. To collect the answers more conveniently, you may use multiple answers for every question, such as:

  • Yes

  • No

  • No Answer

Warehouse Audit Checklist Template

  • Are emergency exits clear of cobwebs?

  • Are emergency exits clear of obstructions?

  • Are fire doors easily opened from the interior?

  • Are any of the power leads damaged?

  • Are temporary power leads on the floor?

  • Does the warehouse have any broken power points?

  • Are aisles clear of stock and pallets?

  • Are all lights in good working order with no sign of burns?

  • Are lighting areas clear of cobwebs?

  • Are loading dock doors in good condition?

  • Are personnel access doors in good condition?

  • Are walkways adequately lit?

  • Do stairs and intersections have an unobstructed vision?

  • Are bins emptied regularly?

  • Are floors and aisles around clear of trash?

  • Are workbenches clear of rubbish?

  • Are workbenches in good condition and stable?

  • Is equipment neat and in good working order?

  • Is shrink-wrap removed from pick items?

  • Are all pallets and racks in good condition?

  • Are double-stacked pallets in good condition and stable?

  • Are stock items in pallet racking secured?

  • Are all chemicals stored in appropriate containers?

  • Are all containers clearly labeled?

  • Are cabinets easy to access?

  • Are first aid cabinets and content in order and clean?

  • Do waste and sharp containers need replacing or emptying?

  • Are all floor surfaces free from trip hazards?

  • Are all floor surfaces free from ice build-up and spills?

  • Are walls and barriers in good condition?

  • Does the DC have any gas leaks?

  • Does the DC have any water leaks?

  • Is the air quality good? No fumes, odors, dust, or allergens

  • Is PPE worn by staff when required?

  • Is warehouse equipment placed away?

  • Are the change room and locker clean and hygienic?

  • Are dining areas clean and hygienic?

  • Are toilets clean and hygienic?

  • Are wash areas clean and hygienic?

Final Thoughts A warehouse audit identifies good working practices and improvement or optimization opportunities through data benchmarking and an objective assessment. The warehouse audit guide also supplies a roadmap to qualitative warehouse improvement, savings and cost avoidance, and improved efficiency. Warehouse Management won't end here. At Routetitan, we help companies with all-size warehouses to have a perfect shift from inventory to last mile delivery. So please send us a message or try our free trial to get our advanced route optimization features.

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