Problem
Sunshine Solar Solutions is a reputable company that specializes in the design, manufacturing, and distribution of solar panels and related products. The company has built a strong market presence and experienced consistent growth over the past decade. However, recent shifts in market demand, rising operational costs, and the emergence of new competitors have prompted the management to reevaluate their operational efficiency. The management is now considering conducting an operational audit to identify potential areas of improvement and develop a strategic plan to enhance the company's overall performance.
Background: Sunshine Solar Solutions was founded 12 years ago by a group of engineers passionate about renewable energy. The company initially focused on residential solar panel installations but later expanded its product portfolio to cater to the commercial and industrial sectors. Over the years, Sunshine Solar Solutions has built a reputation for providing high-quality products and exceptional customer service, which has contributed to their sustained growth and market position.
Current Challenges: Despite the company's past successes, Sunshine Solar Solutions is currently facing several challenges:
I. Market Demand Fluctuations: The solar industry is highly competitive and sensitive to changes in government policies and incentives. As a result, Sunshine Solar Solutions is experiencing significant fluctuations in demand, making it difficult to forecast production and maintain optimal inventory levels.
II. Rising Operational Costs: The company has observed a steady increase in operational costs due to inefficient processes, outdated equipment, and growing labor expenses.
III. New Competitors: The entry of new players in the solar industry has intensified competition, putting pressure on Sunshine Solar Solutions to reduce prices while maintaining product quality and service standards
Task
I. Upon reading the case, discuss the need of an operations audit.
II. Integrate the concept of 7 E's of Operations Audit, as applicable to identify potential problems in the case.
III. As an internal auditor, what are the skills and qualities you need to have an effective audit and to resolve the problems encountered?
IV. Based on your proposed recommendations, as an internal auditor, how will you become a trusted advisor and an effective consultant?