The use of electronic data interchange for supply chain coordination in the food industry

Abstract

Supply chain management (SCM) is concerned with the relationship between a company and its suppliers and customers. It is characterized by interorganizational coordination: companies working jointly with their customers and suppliers to integrate activities along the supply chain to effectively supply product to customers. More developed SCM is indicated by systematic integration, i.e. standardized and automatic interorganizational interfaces. Information technology (IT) engenders such systematic integration by allowing more efficient and automatic information flow. This research focuses on electronic data interchange (EDI), an important class of IT used for interorganizational information transfers in the supply chain. Data from a survey of the food industry is used to examine the use of EDI with respect to interfirm coordination activities involving suppliers and customers. The influence of demographic characteristics on EDI use is also investigated. The results suggest that firms view EDI as a tool for improving efficiencies rather than as a tool for facilitating supply chain integration. There is also a surprising difference in firms use of EDI with customers vis-à-vis suppliers. Firms tend to be much more accommodating of the desires of their customers than of their suppliers.