Adoption of just-in-time and electronic data interchange systems and perceptions of cost management systems effectiveness

Abstract

The adoption of just-in-time (JIT) manufacturing techniques and electronic data interchange (EDI) systems that allow for the electronic exchange of data in the accounting and production processes, represent two significant dimensions of manufacturing strategy that might assist a firm's operational ability to respond to demands of the new manufacturing environments. The specific manufacturing strategy of a firm influences the effective management of costs and the design of cost management systems (CMS). The primary motivation for this study is driven by the assumption that information needs for the support of strategic and operational decisions are influenced by the internal production and external environment of a manufacturing organization. The effective design and use of CMS should therefore assist in the successful implementation of manufacturing strategy. This study examines a number of research hypotheses that address these issues. The concepts and relationships involved with regard to cost management have not been considered in past research. An extensive sample selection process was carried out in order to identify organizations that had adopted JIT manufacturing techniques as well as EDI systems. The results of the empirical study were, in general, supportive of the hypothesized relationships. These results offer significant contributions to professionals and researchers. Suggestions for future research could extent the concepts and relationships presented.