What Is Gap Analysis? The Secret to Retail Business Growth
Gap analysis is an excellent way to ensure that your business is reaching its fullest potential. It allows you to identify areas where you could be improving by comparing current success with attainable goals. Let’s take a look at inventory gap analysis in strategic management and how it can work for your business.
What Is Gap Analysis?
When businesses conduct gap analysis, they compare their current status to their potential. They identify a goal state and find out what measures must be taken to bridge the gap. By implementing these actionable steps, you can find significant improvements.
Gap analysis can be applied to many different dimensions, like marketing, processes, productivity and supply management, but we’ll focus on inventory. A gap analysis in inventory management can include looking for areas with a high risk for error or slow pick times. After these opportunities are identified, you can create actionable goals to get up to speed with the company’s fullest potential.
How Do You Conduct Gap Analysis?
Gap analysis is conducted by creating a template to track several different dimensions. These include:
- The current state. Inspect your key performance indicators (KPIs), assess your competitors’ performance and solicit feedback from employees and clients. For inventory, you may want to pull numbers on pick times, accuracy, complaints related to fulfillment and other metrics.
- The potential state. Identify what it is you’d like to be doing. Create ideal situations and pull up forecasting metrics to analyze what you can do.
- The gap. Take a look at the difference between the two to learn more about the gap. In identifying the gap for inventory problems, you can look to both quantitative and qualitative information.
- Bridge the gap. Now, focus on what needs to be done to reach your goals. Create actionable steps that will help you eliminate the gap between your goals and your current success.
There are many methods that can help you conduct a gap analysis in inventory management. These include:
- The McKinsey 7-S framework
- Strength-Weaknesses-Opportunities-Threats (SWOT) analysis
- Fishbone diagrams
- Nadler-Tushman Congruence Model
How Inventory Management Software Can Assist Your Gap Analysis
Many aspects of gap analysis can benefit from the powerful capabilities of inventory management software. Our inventory management software provides features for analytics and reporting, so you can gather metrics for the analysis stage, take action with its many tools and monitor changes as you work to improve performance.
Whether you need to identify weak spots in your inventory system or are looking for ways to improve operations, inventory management software can help. At Finale Inventory, we can help you get the right tools for your unique business. Finale Inventory is a robust system that can assist with a wide variety of performance-improving tasks. Providing metrics and streamlining inventory is just one way that it works side-by-side with inventory gap analysis.