Performance Gaps and Root Cause Analysis: The Ferguson Case

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Performance Gaps and Root Cause Analysis: The Ferguson Case The Ferguson case presents an interesting avenue for exploring the concepts of performance gaps and root cause analysis. A supply-side company operating in a variety of semi-related industries, Ferguson as a credit function structure that is highly individualized and not at all consistent, having arisen out of response by individual branches to specific customer requests or concerns. While this strong customer-centric relationship has been an asset to the company through much of its growth, currently the company is seeking ways to reduce costs and boost performance, and it believes that making the credit function operate in a more systematic and consistent fashion will help to bring this about. Identifying the performance gaps and performing a root cause analysis on this situation yields certain recommendations. The basic performance gap identified when it comes to the credit functioning at Ferguson is one of inefficiency. The executives at the company are concerned that they are experiencing unnecessary expenditures due to the lack of a coherent, comprehensive, and consistent system for this function; it is believed that developing such a system would lead to greater efficiency in the actual operations of the credit function and would also increase the level of knowledge sharing and expertise available throughout the company's credit managers. This goes to the heart of another problem identified in this case,

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