Measuring organizational benefits of EDI diffusion

David Mackay (Management Information Systems, Faculty of Business and Law, Deakin University, Geelong, Victoria, Australia)
Malcolm Rosier (Former Consultant to the Centre for Adolescent Health, Royal Children’s Hospital, Melbourne, Victoria, Australia)

International Journal of Physical Distribution & Logistics Management

ISSN: 0960-0035

Publication date: 1 December 1996

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.

Keywords

Citation

Mackay, D. and Rosier, M. (1996), "Measuring organizational benefits of EDI diffusion", International Journal of Physical Distribution & Logistics Management, Vol. 26 No. 10, pp. 60-78. https://doi.org/10.1108/09600039610150460

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Publisher

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MCB UP Ltd

Copyright © 1996, MCB UP Limited

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