Measuring organizational benefits of EDI diffusion

David Mackay · Malcolm J. Rosier

53 citations0/0 files storedInternational Journal of Physical Distribution & Logistics Management

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Quality and Supply Management Technology Adoption and User Behaviour ERP Systems Implementation and Impact

Abstract

Draws on recent research on the impact of electronic data interchange (EDI) on the Australian automotive industry. The often considerable efforts by large corporations towards the globalization of production and distribution has led such firms (typically multi‐national corporations) to invest in technologies designed to improve the efficiency and effectiveness of their global operations. In this context, one such technology is EDI. Much has been written about EDI and, in particular, the benefits that adopters can expect from using this comparatively simple, facilitating technology. While many authors are quick to extol the virtues of EDI, rarely have they documented the actual benefits and costs to an organization from adoption. Examines the impact of EDI on trading partners in the Australian automotive industry. Research consisted of a longitudinal study (between 1992 and 1994) of all component manufacturers which were supplying components to the large locally‐based multi‐national vehicle assemblers (Ford, General Motors‐Holden (GMH), Mitsubishi and Toyota). It is the component manufacturers who have felt the major impact of their larger customer’s requirements to become EDI capable.The alternative was to cease supplying the automotive industry. Following the establishment of a conceptual model, path analysis was used to analyse support for a number of hypotheses in measuring the extent of benefits to the organization from using EDI. Conclusions so far drawn support the hypothesis that benefits were being achieved depending on the degree of commitment of the organization to issues such as system integration, and level of senior management involvement. A number of suppliers found that despite being forced into EDI adoption, they were obtaining some competitive advantage, and having received new business (e.g. international contracts) partly as a result of being EDI capable.

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References

1984Case Study Research: Design and Methods 1992EDI system integration: A definition and literature survey 1988European Multinationals in Core Technologies

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