Page 31 - ENGLISH MARCH final 2018

Value Adding TO COMMENT on the article,
EMAIL the author at lalitrdua@gmail.com

IA can play a role by verifying that all QA 6. Production planning and Productivity 8. Warehousing
& QC SOPs are updated, documented Production planning plays a significant The end products after completion of all
quality parameters are being reviewed as role in meeting the forecast and it is subject processes, hard work of direct and indirect
defined, approved vendor facilities are to continuous monitoring, reviews and workforce and spending of all stakeholders’
being audited as planned and no vendor amendments. IA will have to understand money is finally stored in warehouse.
can be included in approved list without the intricacy of the various assumptions, Hence it’s very important that functioning
QA approval, and calibration of testing facts and data while reviewing its of Warehouse is always as per standard. IA
tools and equipment is done as scheduled. can verify that the storage conditions are as
processes. The production planning is per product requirements and are subject
Even though QA department defines its done quarterly, monthly, weekly and even to continuous monitoring. The controls
own annual audit plan but many such areas on daily basis. IA can review whether on checking un-authorized access, storing
where financial and accounting aspects are production planning is being done based of products on defined locations, proper
concerned, they can be further audited by on forecast/actual requirements and maintenance and handling of warehouse
IA. Such areas can include identification the same is provided to Procurement equipment are some of the areas which can
of expired stock or near to expiry, frequent department for material planning. IA be reviewed by IA periodically. Further,
receipt of substandard products received can also review optimum utilization of working of all fire extinguishing equipment
from approved vendor, mismatch of quality production capacity by rationalizing and alarms should also be reviewed.
parameters of products given to vendor batch size of products. The engagement of
and the ones with QC etc. workforce, permanent and contract, is also
part of production planning and the same Conclusion
should be accurately done to keep a check The list of areas where IA can do value

5. Plant Maintenance on labor cost. additions includes many more important
areas and including all those in one such
At first sight it appears that IA cannot
provide value in an area which is more 7. Resource Optimisation article is not possible. IA can support
technical then procedural, but the truth is other important areas like effectiveness of
ERM framework, financial and accounting
that there is rarely any activity and process In a manufacturing company there are
which cannot be subject to audit. The ancillary facilities and utilities which are areas, statutory, Taxation and strategic
effective maintenance of plant can ensure compliance etc.
meeting of production targets which will integral part of production operations. Because of its unique position in the
ultimately result in substantial saving in The effectiveness with which such organization, IA function can play multiple
product cost. utilities are used will add to production roles in every aspect of its working be it

IA can verify maintenance of machine effectiveness. Such utilities include compliance verification, investigation,
history card, maintenance of inventory of boilers, DG sets, Cooling systems etc. IA reviewer, advisor and facilitator. The IA
critical engineering parts, adherence of can on a periodic basis verify whether function is required to be given a status
preventive maintenance schedule, effective and appropriate authority to carry out
and optimum utilization of engineering preventive maintenance has been done its function effectively. The CIA is also
tools and machines etc. IA can also do as planned, inventory of critical parts required to be self-motivated, analytical,
analysis of high expenses being incurred is maintained, consumption of fuel and always up to date about the business and its
on maintenance of a machine which may output is as per standard. Also, IA can processes and capable of making objective
be due to substandard parts being used or verify that all statutory compliance is assessment.
correct processes not being followed for Finally if management consider and
preventive maintenance. The Engineering done for these utilities and required in reality establish IA function as an
department is responsible for quality certificates are displayed at appropriate important support, IA can effectively align
of services rendered by outside service places. Even review of records of capacity its activities with business activities and
providers for engineering parts and IA utilization, with reference to production provide much needed support.
can review whether the same is being
ensured by it by conducting quality check capacity utilized can highlight under/over Lalit Dua EVP- Internal Audit and Risk
and testing the items before being used on utilization of utilities and the same has its Management with Riskpro India Ventures Pvt.
production floor. own implications. Ltd.

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