Burton case study
Burton is a manufacturing global enterprise that produces equipment，closing，and related accessories for snowboards。Now，it faces four problems to expand its market，they are improvement its systems for inventory，supply chain，purchasing，and customer service。With the help of SAP enterprise software and other IT technology tools，Burton has improved its operational performance and decision making。 Analyze Burton using the value chain and competitive forces models。 Value chain is entire series of work activities that add value at each step of the transformation process。
The firm value chain includes primary activities and support activities。Primary activities include inbound logistics，operations，sales and marketing，service and outbound logistics。And support activities include administration and management，human resources，technology，and procurement。IT technology plays an important role to restructure the value chain。 Burton is a manufacturing global company that [produces related goods for snowboards。Now，Burton uses IT technology to restructure its value chain。Firstly，for the inbound logistics，SAP helps Burton to manage all the processes of purchasing materials from suppliers in the procure-to-pay process to solve some problem such as overdue purchase orders，incorrect purchase orders。
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Burton can assort its warehouse more efficiently through using SAP than using EDI。Secondly，SAP helps Burton operate its business smoothly。SAP improves the management of dashboard。It helps the users of Burton to find inconsistencies，gaps in time。Thirdly，for sales and marketing，SAP also make positive effect on it。It can monitor the process of customer sales and adjust the supply。For example，the available-to-promise process wasted hours to compete，but now，after using SAP，it takes 20 minutes to compete it。Next，the service activities also make significant process。SAP improved customer services and reduces maintenance costs of Burton’s goods and services。Finally， the part of outbound logistics also get benefit from using SAP。It improved the order-to-cash process，once Burton receives the order from customers，it can select the goods and distribute them and get payment efficiently。 Porter’s model of the five competitive forces determine the attractiveness and profitability in any industry。 The following content is the analysis about the five competitive forces of Burton。
Bargaining power of buyers：the power of buyers influences a firm’s profit。Customers information and knowledge of the firm’s products and services determine the degree of buyers’power。After using SAP software，customer can get current information about products’price，qualities，reverses。And they also can get the modification of Burton’s products efficiently。So they prefer to choose Burton’s products and the bargaining power of buyers is medium low。 Bargaining power of suppliers：the power of suppliers is the inputs are provided by suppliers influence the firm’s production。Because Burton uses SAP，so it can monitor the production and get moderate material from suppliers。And Burton have wider choice to choose suppliers with the help of IT technology。So the bargaining power of suppliers is low。 Threat of substitutes：the threat of new products and services。After Burton implemented SAP，Ocracle database，suse Linux enterprise server and commodity hardware，it has improved its value chain significantly and built customer loyalty， so the threat of substitutes is medium。 Treat of new entrants：the profitable industry may attract new entrants。Because Burton is a global company， so its economics of scale is a big obstacle for new entrants。But on the other hand，new entrants also can use IT technology to compete with Burton。So the threat of new entrants is medium。 Rivalry among competitors：the competition of many competitors in an industry。Burton has more than 40 percent of the US market share。But more and more competitors come to the snowboard industry when Burton expand its global market further，and the IT technology accelerates the speed of the coming of new competitors。So the rivalry among competitors is high。
What are the business processes describe in this case such an important source of competitive advantage for Burton？ For bargaining power of buyers，the available-to-promise process is a competitive advantage for Burton。After using SAP analysts，it saves hours time to finish this process。For bargaining power of suppliers，the management of overdue purchase orders in the procure-to-pay process is the advantage for Burton to bargain with suppliers。And the process of reporting inventory has improved after used SAP。Burton can communicate with suppliers efficiently，suppliers can easily get current information about warehouse and make decisions to supply materials。For threat of substitutes，the improvement of available-to-promise process and the order-to-cash process save the customers’time and get a accurate information about the availability of products，so Burton can build brand loyalty among its customers。For threat of new entrants，the process of reporting inventory improves the communication of Burton with suppliers and customers。It built a good cooperative relationship with them。So it’s a big obstacle for new entrants to get suppliers and customers。
For rivalry among existing competitors， the efficient management dashboard helps Burton’s users monitor some important process timely and smoothly。Burton can react right decisions when it discovers inconsistencies，gaps and other problem。And the processes cab be improved significantly during reorder season。Burton can get the feedback from its dealers to make decisions to replenish products or offer new products quickly。 Explain exactly how these process improvements enhance Burton’s operational performance and decision making。 With the help of SAP，the business processes have improved observably and boost Burton’s operational performance and decision making。The available-to-promise process is taking 20 minutes now compare with serval hours without using SAP analysts。Firstly，it saves time and costs for Burton to response customer order。Secondly，it’s good for Burton to check the availability of products in stock and make decisions about whether increase produce the relevant products or not。Thirdly，it‘’s convenience for Burton to communicate with its dealers and retail customers。Its dealers and retail customers can get accurate information about the storage of products and prefer to build positive cooperative relationship with Burton。Hence，the bargaining power of Burton increases and boosts its operational performance and decision making。 The order-to-cash process also bring benefits to Burton’s performance。The improvement of this process give the major benefit to its customer services。
Customers can communicate with Burton rapidly and directly，they need’t to wait for long time to meet their needs. So customers prefer to choose Burton rather than its competitors. Thus,it enhances Burton’s operational performance. And the improvement od this process also reduces the distribution costs and increases delivery times.because the SAP analysts instead people to do this process, it saves the cost of human resource. And it saves time to deliver products to customers and avoid wrong delivery immensely. So ut can increase delivery times with least distribution costs. And this process can help Burton get payment timely and exactly. Because of the accurate work of SAP, Burton can analyse the quantities to every retail customer and get the payment without errors. All of the benefits of improvement of the order-to-cash process can attract more customers.hence,it is good for Burton’s operational performance. The procure-to-pay process also make significant contributes to the operation of Burton. With the help of SAP, Burton can make right decisions about purchase problems such as overdue purchase orders, misleading purchase orders and prepayment or accruals purchase orders. Burton can connect with its suppliers timely. For overdue purchase orders, Burton can make decisions whether keep the cooperative relationship with the suppliers or not if it happens more than one times.
And it also ensure the continuity of production. It prevents the production downtime due to inadequate materials. And the improvement of this process also prevent Burton from purchasing bad quality of materials but high price problem. So it ensures the quality of Burton’s products and reduce the finance risks. Hence, the improvement of procure-to-pay process improves logistics management. And SAP also help Burton use EDI system efficiently. Lots of items are moving from warehouse to warehouse and lots of transactions occurs in every warehouse every day. So it’s very important for Burton to monitor these transactions timely. It can help Burton to make decisions in time if wrong transaction happens. Because if one wrong transaction can’t be found timely, it will result a series od chain effects. And it also can reduce the cost of inventory. Improvement the process of reporting inventory can help its suppliers and customers easily get current information about the position and the availability of the ordering products. It’s good for Burton to manage the storage of warehouse and supply chain. Hence, it can save costs and get long term cooperation with customers and suppliers, and make extra profit. The improvement of management dashboard also help Burton operate efficiently. It helps Burton to monitor the running information of each process at a fixed period.
The decision makers can make accurate decisions for the operation, if they find out any wrong steps of business steps happen, they can modify the steps and reduce the loss. They also can use dashboard to get information about the successful or unsuccessful sales of each items. So they can adjust the scheme of product line. And the decision makers have more time to do R&D and develop more good products that have good quality. And Burton can get huge benefits during reorder season by using SAP. It ensure the continuity of the supply of burton’s products. It helps the decision maker s handle the production timely and efficiently. Conclusion
Burton have solved a set of problems when it expanded into global company, the threat of stocking and managing inventory was reduces by using SAP enterprise software. Burton’s decision makers can monitor the business process and make right decisions in time. The competitive advantages have become strong obstacles for competitors. So IT technology plays an important role in business operation. Improving IT technology can improve its operation efficiently.