Why Analyze Data?
It has been stated that, according to Peter Drucker, management guru, one of the deadly sins that assures failure of an entity is to confuse sentiments with objectives. What is meant here is that productive work is always carried out under a set of specific measurable outcomes. The key word here is measurable. If something isn't measurable then it should not be stated as a desired outcome.
Collection of Data
Most businesses already have a vast collection of data stored on their computers. Often this is obtained from their order processing, purchasing, etc. But many do not take full advantage of this data and do analyses designed to improve their business by either learning more about their customers and suppliers in order to align their business , or just having greater knowledge of their internal processes in order to become more efficient.
Areas one can examine, can include, for example:
- Seasonaity of Product Sales (Which products sell better when?)
- Locations of Product Sales (Geographical Differences, Store Locations, Demographics)
- Daily sales analysis (for example Staffing schedules)
- Order Processing procesures (too many steps, takes too long?)
- Store / Area / Employee efficiency comparisons
What Approaches Can be Used?
There are many different types of analyses that can be done to help business better understand themselves and their customers. Some of the common approaches might be:
- Statistical analysis
- Process Modeling (Simulation)
- Internal order processing efficiency (6 Sigma, CPA, Lean)
- Time Series Analysis; prediction
- Efficiency comparisons (Frontier Analysis)
What are the Benefits of Data Analysis?
There is no company that can not benefit from having greater access to hard information about its business. Some of the benefits can include:
- Better Utilization of staff
- More efficient internal processes
- Better knowledge of customer preferences
- Better cooperation with suppliers.
- More efficient warehousing