PERFORMANCE MANAGEMENT

1
PERFORMANCE MANAGEMENT

• Creating long-term sustainableadvantages in the
  fashion industry

2
LEARNING OUTCOME

• to understand the meaning of business
  effectiveness and efficiency to the textile
  business
• to recognise the value of performance management
  in creating long-term sustainable advantages in
  the fashion industry

3
PERFORMANCE MANAGEMENT

• Performance management is the activityof
  tracking performance against targets and
  identifying opportunities for improvement.

4
EFFECTIVENESS VS. EFFICIENCY

• Effectiveness is derived from the customer
  oriented manufacturing literature with its main
  focus on explicitly servicing customer demand.
• Efficiency is derived from the process focused
  manufacturing literature with its main focus on
  delivering products and services to a rate grater
  than the norm.
• (Towers, 1999)

5
MARKET MEDIATION

• Trade-off between effectiveness and efficiency
• Main focus on customer demand
• Competency as the ultimate performance objective
• Competency a companys ability to effectively
  and efficiency turn change into an opportunity

6
THE VALUE FLOW
V4
END- CONSUMER
Non-Monetary Resources
V1 V2 V3
RAW MATERIAL SUPPLIER
MANUFACTURER
RETAILER
END- CONSUMER
R4 R3 R2
END- CONSUMER
V1
V R
7
SHORT-TERM ORIENTED

• Main focus on monetary resources
• Efficiency focus cost is the key driver
• Process focus immediate resourceand capacity
  constraints
• Tactical manufacturing and logistics management
  focus on execution

8
LONG-TERM ORIENTED

• Effectiveness focus revenue is thekey driver
• Focus on strategic planning product /market fit
• Marketing and production alignment focus on
  capabilities rather than constraints
• Includes the concept of non-monetary returns

9
PERFORMANCE MEASURES

• Market Competition What is the added value
  provided by the company?
• Location, sales channels, products, finance etc.
• Grounded in the long-term business strategy
• Priority Competition Is the company a market
  leader or a market follower?
• Innovation, creativity patents, uniqueness etc.
• Investments in RD
• Hegemonic Competition Has the company been
  recognised on the marketplace?
• Brand, marketing, business policies etc.
• Investment in marketing

10
PERFORMANCE MEASURES

• Performative Competition Is the company
  efficient?
• Productivity, quality, stock levels etc.
• Production excellence
• Competition in Foresight Is the company
  effective?
• Production flexibility, demand recognition,
  trends forecasting etc.
• Agility

11
FACTORS FOR SUCCESS

• Defining and using measures that evolve over time
• Using a mix of short and long term measures
• Focusing on business objectives rather than
  outputs
• Measuring effectiveness (doing the right things)
  and efficiency (doing things right) in parallel

12
WHY IS PERFORMANCE MANAGEMENT IMPORTANT?

• Increased quality of service
• Increased efficiency in operations
• Responsiveness to market change
• Long-term sustainable advantages