The value of auditing supply chains

Organisations face nowadays high dynamic markets, characterised by environments necessitating agility, adaptability and alignment as key practices to gain sustainable competitive advantage. Supply Chain and Operations audits represent a fundamental step to intercept systematically market changes and therefore to support adequately improvement projects. The core element of audits is the diagnostic stage. No audit can be considered successful unless it really provides a thorough understanding of how the constituent elements of an organisation interact with one another (people, processes and technology), that is the interactions which constrain the system, and how these interactions are reflected on the market-driven key performances. The main output of diagnosis is therefore the development of explanatory causal-relationships maps. The many existing diagnostic methodologies and tools are critically reviewed herein. A new audit methodology is here developed. This is based on two fundamental assumptions. Sometimes process related problems are not solved because companies fail to identify them. On the other hand the evaluation of innovative technologies or managerial practices can represent a way not only to solve hidden problems but to develop new business models and allow to do things that the organisation is not already doing, without the overshadowing bias of current company’s pains. The key enablers for consensus building and how the early stages of auditing influence the final result in business improvement projects are investigated. The application and value of auditing operations and supply chains is tested on a set of relevant European action research initiatives.