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According to International Organization for Standardization (ISO), a process is a set of interrelated or interacting activities that use inputs to deliver an intended result. These inputs and outputs may be tangible (materials, components or equipment etc) or intangible (data, information or knowledge etc).

 

However, mere presence of a process for an operation does not necessarily mean that the operation is healthy, productive or optimal. This depends on the efficiency and effectiveness of the process itself. And in order to evaluate the effectiveness and efficiency of the processes in place, companies conduct process audits.

What is process audit?

Process audit refers a scientific and systematic study and analysis of the operational processes to evaluate its effectiveness, efficiency and optimal competencies. The efficacy of the processes reflects the health of the operations of a business. In process audit, the focus is on how the process is defined and managed in the backdrop of achieved results.

For example, several companies conduct yearly recruitment campaigns from B-schools across the country. The purpose of process audit here is to establish whether the recruitment process was designed and managed keeping in mind all the relevant considerations.

  • Was the manpower planning report available?
  • What are the pools of recruitment available? Could the manpower gap have been fulfilled by exercising internal options like promotions, transfers, training and development?
  • What were the options available for new recruitment pools? (job portals, college recruitment, resume database etc)
  • On what basis, were the b-schools identified and selected for recruitment? (Functional specialization, past employment records from college/university, B-school / university rankings etc)
  • Were the job description criteria available before selection tests and personal interview?
  • Was the selection tests designed by functional or training experts?
  • What was the percentage and composition of the candidates who appeared for the selection test? (Numbers, specializations etc) What were the reasons of non-appearance of candidates who opted out of the placement opportunity?
  • Was the selection test conducted in close supervision of company representatives?
  • Did the interview panel comprise of concerned functional heads including HR?
  • What was the basis of evaluating and rating a candidate in the interview round?
  • How many of those selected – accepted the offers, joined service or declined to accept / join?
  • Was there a scope of negotiation in terms of salary, posting locations etc?

Why is process audit essential?

The purpose of process audit is to evaluate the accuracy, robustness and flawlessness of a process. From the example used above, a company may have the option of hiring employees from several pools of recruitment. Let us say, the company used the campus placement method and successfully closed the recruitment campaign. But could the company have selected any other method and be more efficient? The answer lies in process audit than subjective assessments. Did the company consider the pros and cons of the other available options for external recruitment like job portals, existing resume databases, employee referrals etc? What were the reasons behind selection of one source and rejection of others? Process audit asks these tough questions which help companies assess and improve the processes they are following in executing their business operations.

How to check the operational health of a business by conducting process audits?

Process audit should start from the beginning of an operation. This is to ensure integrity of a process from its inception and eliminate root level loopholes.

1. Identify participants in the process; the process owners.

The first step is to list out all the stakeholders and participants ( the process owners ) in the entire process (at any stage). For example, in a recruitment operation, various participants involved are HR department, placement cells of colleges and b-schools, representatives from job portal companies, training department and functional heads and experts. This will help a company identify participants who might have not been given due consideration in the existing process.

2. Reassess the process sequence

In this stage, the entire process sequence goes through re-validation. It follows a logical step-by-step identification of the series of activities in a process ( in consideration of the possible outcomes at each stage ). It provides a network of the sub-processes and the working inter-relationships amongst the sub-processes and the process owners. Any actual deviation from this identified process sequence indicates that there is a process violation. For example, conducting recruitment interviews and selecting candidates for marketing division without intimating the concerned marketing head will be a gross violation of process in any prudently managed company irrespective of the quality of candidates selected.

3. Process requirements

After reassessment of the process owners and the process sequence, the next step is re-evaluation of the process requirements at each stage of the process.

  • What are the standards of inputs and outputs (deliverable) at each stage / sub-process?
  • What are the resource requirements at each sub-process? (Skilled manpower, information, support functions etc)
  • Was proper resources made available at each stage?
  • Who is the process owner? What are his functions and responsibilities?
  • Was process ownership and accountability communicated to the process owners?
  • Was proper authority delegated to the process owners?

4. Competency Mapping

Rocess ownership is a crucial responsibility. Process owners are expected to be good communicators; of possessing leadership qualities and this is apart from the required functional skills and knowledge. With the help of job analysis and understanding of process requirements, these desirable behaviors and traits can be identified. The process of identifying these key competencies or behaviors is called competency mapping. Competency mapping can play a crucial role in process audit as it provides an opportunity to compare the desirable competencies in process owners vis-à-vis their actual competencies.

Processes are crucial for execution of various operations in business. It provides a blueprint for the operational activities. And this blueprint, which comprises of the routine activities, becomes a habit for the employees. It is what can slowly become an integral part of the organization culture. So, it becomes imperative that companies evaluate their processes from time to time by conducting process audits and keep a check on the health of their operations.

 

To know more about “Process Audit – Scorecard For Your Organization’s Health” get in touch with our Retail Experts on [email protected]


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Author Bio

Rupal Agarwal

Chief Strategy Officer

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    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
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    DIGITAL MARKETING

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    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

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    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
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    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

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    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

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    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

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    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

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    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

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    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

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    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

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    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.