Detecting Unauthorized Subcontracting in Cross Border Supply Chains
Detect unauthorized subcontracting by reconciling raw material mass balance against electrical draw telemetry and conducting unannounced floor tooling audits.
Production Shift Reconciliation
Meaning
Operational audit techniques compare the quantity of raw materials consumed with the volume of finished goods produced during a specific time period.
Material Balance
Calculating the difference between the weight of the input materials and the weight of the output plus scrap provides a measure of process control. In production shift reconciliation, the auditor checks the inventory logs to confirm that all withdrawals from the warehouse are accounted for in the daily production report. Any unexplained loss of material suggests a failure in the tracking system or a deliberate diversion of resources.
Labor Attribution
Comparing the number of workers on the clock with the output for that shift helps in evaluating the productivity of the workforce. This production shift reconciliation process identifies shifts where the output is unusually high or low relative to the labor hours used. A high output with low labor hours might indicate that the factory is using informal workers or skipping certain quality control steps to meet targets.
Output Accuracy
Verification of the number of units packed and ready for shipment prevents the overstatement of production progress. The production shift reconciliation includes a physical count of the items at the end of each shift to ensure they match the digital entries in the manufacturing execution system. This practice provides a reliable basis for financial reporting and for planning the logistics required to move the goods to the next stage of the supply chain.