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Keith Dunn: Chapter 8: Performance Analysis
Posted On: 27-04-2009 08:19:22 AM

8 INTRODUCTION

We now come to one of the most important chapters in this book in which we will cover the principles and practice of the bedrock of knowledge and the starting point for both planning and in-season management – performance analysis.



The importance of performance analysis cannot be understated. It the root of effective decision making and drives everything from day to day operations to the business strategy. It helps you to manage risk by giving you a thorough understanding of the likely consequences of each decision you take and of the potential impact of future trends. Most importantly, perhaps, it provides you with the incontrovertible evidence of your customer’s current preferences that is the basis for successful buying.

Performance analysis does not mean the preparation of a performance report. That is just a statement of facts and numbers which anyone can prepare and anyone can quote. Performance analysis is what you do to understand the numbers, to be able to say “This happened because …”. It is this understanding that enables you to develop robust plans and to manage performance in-season. Neither is analysis an end to itself. You use it to determine how to improve or maintain current or future performance, not just to find out what the problems or opportunities are. Without this as the goal analysis is a pointless waste of time.

There is no real distinction between the performance analysis which you will do for planning and that which you will do in-season. After all, although the decisions you are taking may be different, both planning and trading take place concurrently and rely on the same information. You consolidate the knowledge that you have been using for in-season management to develop your plans, which are then updated as a result of each weeks performance. Performance analysis is part of a continuous process of learning not an isolated task you perform when you have to.

At the same time performance analysis is rarely black or white. The conclusions that you draw and the actions you take as a result of the analysis are to a greater or lesser extent subjective and, ultimately, dependent on your experience of the area you are investigating. It also takes place as part of a continuum of activities so that the longer you are responsible for an area the less performance analysis will be about uncovering new revelations and the more it will be about confirming your expectations of the results of previous actions.

 
 
 

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