Best Audit Practices: The Top 10 Auditing Mistakes Manufacturers Make
Karissa Vaughn
Manufacturers perform internal audits to identify potential improvement and growth areas and check for company and industry compliance in processes and products. However, many companies conduct internal audits without creating improved systems in cost-effective ways. Despite the universality of internal audits, many manufacturers are still making avoidable mistakes that can be costing them time, money, and morale. Here are the top 10 mistakes that I have identified over my 15 years of experience as both a QA manager and an Auditor. These ten mistakes are:
10.) Informal Internal Audits
9.) Incorrect Internal Audit Frequency
8.) Missing Internal Auditor Evaluation
7.) Missing Essential Criteria and Areas
6.) Not Establishing an Audit Management System
5.) Selecting the Right Auditors
4.) Internal Auditor Training
3.) Ineffective Corrective Action Plan
2.) Using an Internal Audit as a Compliance Tool
1.) Not Reporting the Positives
Now let’s explore each of them in more detail.
10. Informal Internal Audits
One of the most common mistakes companies make is creating an audit without formal communication. The company may lack:
An auditing schedule or criteria
Notification and communication about the outcome
Opening or closing meetings
A final auditing report or review.
Informal internal audits do not answer vital questions like who should receive the findings and how auditors share the information? Without a designated group, it becomes difficult to determine who should take actionable steps? When should that happen? And how? Formal audits should follow ISO 19011:2018 standards, which provide a framework for performing the audit, writing the report, following up, auditor competency, and auditor evaluation. Auditors must minimize interruptions while conducting the internal audit. The most effective auditors observe the process as if it were the very first time.
9. Incorrect Internal Audit Frequency
Audit frequency should meet the company’s needs and fit its resources. Managers must determine how long the audit will take and who they will train to assist. They should also clearly understand budget restrictions and the cost of any directive actions. If there is not an existing budget, then the company needs to make one. Internal audit frequency is most effective when it fits the needs and risks of the organization. Manufacturers should plan the frequency, so the right resources are available for the audit and the corrective actions. High-risk products or processes may need more time and resources. For many manufacturers, the solution is a hybrid audit. Different programs and processes undergo audits at different frequencies based on risk.
8. Missing Internal Auditor Evaluation
An auditor evaluation allows program managers to share the outcomes and how best to handle these situations. Evaluations are valuable for learning the strengths and weaknesses in a process. Delivering evaluations helps companies develop a culture of continuous improvement. Internal auditor evaluations create opportunities for people in the field to assess risk better. Evaluations ensure the behaviors of auditors align with the company program. Effective auditors need to understand the business they are auditing, legal requirements, the larger industry, and even specific sector knowledge.
7. Missing Essential Criteria and Areas
An internal checklist for the audit should include:
All needed materials
Regulatory and third-party requirements
Customer and co-manufacturing requirements
Identity-preserved requirement if applicable
Internal company-specific requirements.
Best auditing practices include a review of the safety and management system. Leave no stone unturned when planning the audit and examine product non-conformities, incident management, and improvement opportunities. Avoid overlooking traceability or recall opportunities or whether follow-ups are effective—an audit can identify improvement possibilities in all areas, from sanitation to shipping and receiving.
6. Not Establishing an Audit Management System
An audit management system should include objectives aligned with company values with assigned roles. Auditors must understand how to perform the job safely, maintaining confidentiality. The audit management system includes reporting, tracking trending results, and KPIs with an eye for improvement. For maximum effect, review the audit management system annually to determine if it remains relevant and drives the company’s objective. By centering improvement as the focus, companies will seek the right auditors, training, and resource allocation.
5. Selecting the Right Auditors
The key to having the right auditors is by focusing on the right skills, behavior, and knowledge. Integrating an effective training program answers these questions and whether auditors can understand the processes of the facility and the industry, managing their time effectively in challenging situations.
Auditors must act with integrity, professionalism, and honesty, showing good judgment and discretion. They need the self-motivation to work independently, providing evidence-based conclusions, and making good risk decisions.
4. Internal Auditor Training
Companies must develop explicit instruction on the company’s audit procedures, desired skills, industry risks, and important hazards. Include orientation training and review audit criteria, as well as procedures, techniques, and specific safety requirements. Developing an intimate understanding of data management is crucial to know how the system works to make accurate decisions. Annual refresher training sharpens competency when determining compliance versus non-compliance. Auditors are instrumental in identifying best practices, industry changes, or updates to integrate.
3. Ineffective Corrective Action Plan
Internal audits drive corrective actions. Companies can perform cost-benefit analyses and divide activities into short- and long-term to avoid an ineffective action plan. Sometimes, the right move is to choose a short- and long-term action simultaneously. Good action plans highlight all areas requiring corrective action, assigning ownership to each action with a clear timeline for completion. Making a cost-benefit analysis means creating a framework for a sound investment decision and providing a basis for comparing projects. Sharing analysis with senior leadership gives them all the facts to make informed decisions. Integrating comprehensive software platforms like SafetyChain facilitates presenting clear and accurate data when determining the costs of quality.
2. Using an Internal Audit as a Compliance Tool
Companies can look at the internal audit as a continuous improvement tool that examines opportunities to drive improvement beyond compliance. It can also help monitor trends in KPI or the industry by customizing the criteria checklist to match industry trends. Make sure the program really works to address the facility’s risks by customizing the tool. The internal audit is an opportunity to get a feel from employees about their concerns and observations. Involving frontline employees in the process allows programs to foster a strong food safety and quality culture.
1. Not Reporting the Positives
By only talking about findings or issues with compliance, companies and employees can get stuck in a negative space. Sharing good things and reporting the exciting stuff makes managers and employees feel more invested in doing the right and safe thing.
Building positives directly into the report sets the tone. Managers should include best practices in the formal report and closing meeting. This drives engagement and involvement because employees feel they are heard. Managers should want everyone in the facility to ask how they can make the facility better.
Conclusion
Make the most out of your next internal audit by avoiding these ten mistakes. By doing so, you will be able to keep your cost low and rewards high. If you are looking for more insight into your internal audits, check out this previous blog post on tips and advice for internal audits.
