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Primer Congreso de Logística y Gestión de la Cadena de Suministro
Zaragoza, 12 y 13 de Septiembre de 2007
BENEFITS OF ELECTRONIC DATA INTERCHANGE (EDI) FOR
SUPPLY CHAINS (SC)
E. Tuñón
Polytechnic University of Madrid
J. A. Jaén
Polytechnic University of Madrid
R. Martínez
Polytechnic University of Madrid
A. García y Beltrán
Polytechnic University of Madrid
S. Coronado
University of Luxembourg, Assistant
Abstract
Many researchers have investigated the benefits of Electronic Data Interchange (EDI) over
the years; however, in many instances their results apply to specifics business scenarios only
and therefore they can not be generalized. This paper tries overcoming that situation by
presenting the results of a broad study on the benefits of EDI. The outcome is a list of the
most cited benefits of EDI that Supply Chain (SC) managers could use to understand the
advantages EDI brings to the SC in general and to their organizations in particular. The paper
discusses first a description of the relation between SC and EDI; then the research
methodology used, and finally the findings of the research.
Keyword: Supply Chain (SC), Electronic Data Interchange (EDI), EDI benefits
Resumen
La investigación realizada en el transcurso de los años sobre Intercambio Electronico de
Datos (I.E.D.) se ha centrado muchas veces en situaciones especificas que no han permitido
generalizar los resultados obtenidos. Este documento intenta solucionar ese problema
presentando el fruto de un amplio estudio sobre beneficios de I.E.D. El resultado es una
relación de los beneficios de I.E.D mas citados en la literatura de I.E.D., lo que permite que
los gestores de C.S conozcan los beneficios que el I.E.D. puede aportar a la C.S. en general,
y a sus organizaciones en particular. El resto del documento se organiza en tres secciones:
primero se describe la relación entre C.S. y I.E.D., a continuación se explica la metodología
de investigación utilizada, y se finaliza presentando los resultados del estudio.
Palabras clave: Cadena de Suministro (C.S.), Intercambio Electrónico de Datos (I.E.D.) y
beneficios del I.E.D.
1. SUPPLY CHAINS AND ELECTRONIC DATA INTERCHANGE
1.1 About Supply Chains
One of the most comprehensive definitions of Supply Chain (SC) comes from Christopher
(1992): “the network of organizations that are involved, through upstream and downstream
.
linkages, in the different processes and activities that produce value in the form of products
and services in the hands of the ultimate consumer”. The attractiveness of this concept is that
it interconnects actors (suppliers, manufacturers, distributors and consumers) with processes
(flow of products, information and funds) as shown in Figure 1, modified from A.T. Kearney.
SUPPLIER 1
SUPPLIER 2
….
SUPPLIER X
MANUFACTURER 1
MANUFACTURER 2
….
MANUFACTURER Y
DISTRIBUTOR 1
DISTRIBUTOR 2
….
DISTRIBUTOR Z
CUSTOMER 1
CUSTOMER 2
….
CUSTOMER W
PRODUCTS AND SERVICE FLOW
INFORMATION FLOW
FUNDS FLOW
SUPPLIER 1
SUPPLIER 2
….
SUPPLIER X
MANUFACTURER 1
MANUFACTURER 2
….
MANUFACTURER Y
DISTRIBUTOR 1
DISTRIBUTOR 2
….
DISTRIBUTOR Z
CUSTOMER 1
CUSTOMER 2
….
CUSTOMER W
SUPPLIER 1
SUPPLIER 2
….
SUPPLIER X
MANUFACTURER 1
MANUFACTURER 2
….
MANUFACTURER Y
DISTRIBUTOR 1
DISTRIBUTOR 2
….
DISTRIBUTOR Z
CUSTOMER 1
CUSTOMER 2
….
CUSTOMER W
PRODUCTS AND SERVICE FLOW
INFORMATION FLOW
FUNDS FLOW
PRODUCTS AND SERVICE FLOW
INFORMATION FLOW
FUNDS FLOW
Fig.1 – Supply Chain Concept
The SC model depicted in Fig. 1 is made of three supplier-buyer dyads: supplier-
manufacturer, manufacturer-distributor and distributor-customer. Each dyad consists of
various levels (1-X, 1 -Y, 1-Z,1-W). The higher the number of dyads and/or levels, the more
complex the SC becomes. Actually, the supply chains of nowadays are composed of such
number of dyads and levels, that they can not be properly managed without the support of
suitable Information Systems tools.
Saeed et al. (2005) indicate that interorganizational systems provide the technology to
consistently support the boundary-spanning activities of the supplier-buyer relations.
Obviously, these activities needs to be supported inside the boundaries of the firms too, as
pointed out by Giménez and Ventura (2003). The reason being that SC “involves integration,
coordination and collaboration across organizations and throughout the supply chain. It
means that SCM (Supply Chain Management) requires internal (intraorganizational) and
external (interorganizational) integration”. Integration is therefore one of the buzzwords in the
SCM terminology.
1.2 Electronic Data Interchange on support of Supply Chains
Electronic Data Interchange (EDI) is one of the various functionalities offered by
interorganizational systems to allow firms the appropriate management of the supplier-buyer
relations. EDI facilitates both intra and interorganizational integration through the exchange of
machine-processable documents. The advantage of the said documents is that they can be
processed automatically by computer applications because of their structured format.
Unstructured electronic documents such as faxes or electronic mails are not computer-
retrievable, as a result, they require human intervention to process them, i.e. a person must
re-key the data into a business application first. The greater the number of re-keying
operations, the higher the chance for errors and the longer the processing time.
Because EDI is a means to integrate activities across organizations, it has been used in
business for over 40 years. As indicated by Fricke et al., the basic goals of EDI were to
reduce the costs of document processing and to achieve business advantages made possible
.
by shorter process cycle times. Given that organizations differ in their internal IT systems and
business practices, the development of networked Information Technology systems requires
the harmonization of the business practices, and, of the form and meaning of the data
exchanged. Applying EDI involves the conversion of written documents into a format so that
the computer in one firm can receive and process data from another company. Upon
definition of the processes and exchange messages, the firms establish an integration model
as shown in Figure 2. Each company installs an EDI interface (middleware) that translates the
outgoing and incoming data into the appropriate standard, and moves the data usually across
a proprietary network. It goes without saying that the complexity of the integration model
increases with the number of firms involved in the information exchange process.
EDI MODEL
[Ricker, 2002]
EDI MODEL
[Ricker, 2002]
Fig. 2 – EDI Model
EDI is therefore a powerful tool on support of SCs, and for that reason it has been the subject
of many research efforts. Further, numerous researchers have also proposed enlarging the
investigation on EDI. Some of them like Iacovou et al. (1995) and Li and Williams (1999) have
suggested continuing studying the benefits of EDI; they have even recommended to business
leaders to understand the potential benefits and pitfalls of interfirm applications before
introducing them. This study follows the recommendations of previous investigators to
continue the research on EDI, and specially the advice from Iacovou et al.(1995) and Li &
Williams (1999). Hence, this paper contributes to the research on EDI by studying the
benefits its brings to its users, or prospective users, including those participating in SCs.
2. STUDY
2.1 Subject
The benefits of EDI are well documented in the EDI literature. However, as the EDI studies
have been performed in different sectors, e.g. government, private, manufacturing, services,
etc. and under different conditions, their results do not always apply to other business
scenarios. To overcome this situation the authors of this paper have chosen the “wide view”
approach, i.e. instead of analysing specific cases, they have looked at the benefits of EDI
identified by researchers over a number of years. That has permitted to identify a core group
of benefits which can be used by EDI users, or prospective users, including SC managers, as
the common basis to better understand the advantages that EDI can bring to them.
.
2.2 Research Methodology
This study is based on a review of the electronic literature on benefits of EDI available in the
National Library of Luxembourg. The electronic search for documentation was based on the
use of terms such as “EDI + objectives”, “EDI + goals”, “EDI + benefits”, “EDI + impact”, “EDI
+ success” and the like, up to a total of 52 terms. This approach allowed concentrating on the
specific subject of the research in a fast and accurate manner. After the search, 69 papers
from 38 specialized journals were kept. A complementary but limited search was performed
in the worldwide web; it added three theses to the selected papers, bringing to 72 the total of
documents considered. The 72 documents were published over the period 1988-2005.
The research gave preference to technical magazines over to books for two main reasons:
first, because specialized journals provide the most updated information in fast-moving
technical fields such as application integration or SC (both of them closely related with EDI).
Second because via internet it is easier getting access to technical magazines than to books.
When using paper or electronic publications (journals, books or proceedings) for research
work, it is essential to know how authoritative and influential the content of the publication is.
The Master Journal List (MJL) provides an indication of the relevance of the journal because
it includes a list of the core journals, in English language, that forms the literature basis for
scientific disciplines. As indicated before, the 69 technical papers previously mentioned come
from 38 publications; out of them, 20 (52.53%) are mentioned in the MJL, while 18 (47.36%)
are not. In terms of articles published, 38 of the 69 correspond to magazines mentioned in the
MJL (55%), versus 31 that are not (45%).
The said 72 documents have allowed the analysis of EDI from different standpoints, e.g.
information systems, information technology, purchasing, management, marketing, logistics,
transportation, etc. More specifically, among others, they have dealt with EDI and SC related
subjects such as EDI and Just In Time, EDI in the retail sector, EDI in the construction
industry, EDI and transportation, benefits of EDI in small and medium enterprises, benefits of
EDI in motor carriers or homecenters, use of EDI for custom purposes, etc.
One of the main challenges of the study has been to unify the terminology on the benefits of
EDI used by the authors of the 72 documents. This required focusing first on the concept
expressed by each of the authors and then finding the sentence that could match that
concept with the ideas from other authors. The result is a list of 23 sentences that describes
the benefits of EDI; they are depicted per group and category in Table 1.
Out of 72 papers used in the study, 66 enumerate the benefits of EDI from previously
published literature (indirect benefits), and 39 present also the benefits of EDI obtained via
research activities (direct benefits). The data collected from these documents have been
stored in three repositories whose names reflect the type of information recorded: Direct
Benefits (DB), Indirect Benefits (IB) and Total Benefits (TB). The TB repository is the sum of
the other two.
.
BENEFITS OF EDI
GROUP CATEGORY BENEFIT
Reduce paperwork
Reduce documents processing costs
Reduce manpower
Reduce inventory (and inventory costs)
Costs Benefits
Increase efficiency (productivity)
Reduce processes cycle time
Eliminate or reduce data re-entry
Time Benefits
Improve timely availability of product/service
Improve planning, monitoring and control
Increase traceability
Increase info accessibility and timeliness
Information
Management
Benefits
Increase document accuracy
Increase effectiveness
Improve or enforce intrafirm business processes
Growth
Maintain or gain competitive advantage
Intraorganizational Benefits
Organizational
Benefits
Improve customer service
Enhance coordination btw. trading partners
Establish long lasting or c loser trading relations
Improve and enforce interfirms processes and policies
Reduce the suppliers base
Facilitate/lead to vertical integration
Interorganizational Benefits
Add value through the supply chain
Table 1- Benefits of EDI
The data in the IB and DB repositories are dichotomous (yes/no) and coded (yes = 1, no = 0)
to facilitate its computer processing. Per repository and document, the nominal figure “1”
assigned to a benefit of EDI means it is mentioned in the said document, while “0” denotes
the opposite. Table 2 depicts a sample of the DB repository (Notes for the table: a) due to
lack of space some rows are not shown; b) the “Total” row includes also the points of the
rows non depicted; c) the authors are not referenced in the bibliography of this paper).
Reduce paperwork
Reduce documents processing costs
R
ed
uce
m
a
np
ower
R
e
duc
e
i
n
ven
t
ory
(
and
i
nv.
C
os
t
s
)
Increase
eff
i
ci
e
ncy
(pr
o
d
uct
i
vi
t
y
)
R
ed
uc
e
p
r
oc
esses
cycle
t
i
me
E
l
imi
na
t
e
or
r
e
du
ce dat
a
r
e
-
e
nt
ry
Improve timely availability of
produc
t
/
s
er
v
ice
Improve pl
a
nni
n
g, monit
o
r
i
ng and
co
n
trol
I
ncrea
se
t
racea
bi
l
i
t
y
I
n
cr
e
ase in
f
o
r
matio
n
a
cce
ssi
bi
l
i
t
y
an
d
t
im
e
li
n
ess
Increas
e
d
oc
uments
a
ccuracy
Increase eff
e
ctiveness
I
m
p
r
ov
e
o
r
enforce intraf
i
rm
bu
si
ne
ss
proce
sse
s
Growth
Maintain or gain competitive advantage
Improve customer service
E
nha
nce
co
or
d
i
na
t
i
on
be
t
w
ee
n t
r
a
di
ng
pa
rt
ne
r
s
Establis
h
long-l
a
st
i
ng or
cl
ose
r
t
r
ading
r
e
l
ation
s
I
mprove
an
d
e
nf
o
r
ce
i
nter
fi
r
ms
proce
sse
s
an
d
p
o
licie
s
Reduce the suppliers base
Fa
ci
l
i
t
ate/
l
e
ad t
o
v
ert
i
cal
i
n
t
eg
r
a
t
i
on
A
d
d
va
l
ue
t
hro
ugh
t
h
e
S
up
pl
y C
ha
Authors
Intraorganizational Benefits
Interorganizational Benefits
[Auranachalam,
2004] 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
[Bamfield, 1994] 1 0 1 1 1 1 0 1 1 0 0 0 0 1 0 1 1 1 1 1 1 0
[Chatfield &
Yetton, 2000] 1 0 1 0 1 1 1 1 0 0 0 1 0 0 0 0 1 0 0 0 0 0
[Teo, Tan & Wei,
1997] 1 0 1 0 1 1 1 0 1 0 0 0 1 1 1 1 1 1 1 1 0 0
[Thenmozhy &
Shanthi, 2002] 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
[Vijayasarathy &
Tyler, 1997] 0 0 0 1 1 1 0 1 0 0 0 1 0 0 1 1 1 0 1 0 0 0
[Walton, 1996] 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
[Walton &
Marucheck, 1997] 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
[Wang &
Seidmann, 1995] 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
[Weber &
Kantamneni,
2002] 0 1 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 0 0 0
[Williams, Magee
and Suzuki, 1998] 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL 14 6 11 17 25 17 10 11 9 1 8 23 2 9 8 24 23 9 16 4 6 1
Authors
Intraorganizational Benefits
Interorganizational Benefits
Costs Benefits Time Benefits
Information Management
Benefits
Organizational Benefits
Table 2 - Sample of scoring in the DB repository
.
In the case of the TB repository the nominal figures per benefit of EDI can be “0”, “1” or “2”
instead of “0” or “1”. The reason being that for each benefit of EDI, the “0” illustrates that the
publication does not mention the said benefit of EDI; the “1” indicates the benefit is mentioned
in the IB or DB repositories, and the “2” means the EDI benefit is mentioned in both
repositories.
2.2 Reliability of Data
Before obtaining any conclusion from the data collected it is necessary to know how reliable
they are. The coefficient Alpha of Cronbach has been used for this purpose because it allows
measuring dichotomous (DB and IB repositories) and non-dichotomous data (TB repository).
The Alpha values obtained for the IB, DB and TB repositories are 0.73, 073 and 0.81
respectively. The higher the value of Alpha in a scale from 0 to 1, the more reliable the data
are; however, there is no hard rule for evaluating the magnitude of the reliability coefficients.
Professor Garson (2007) indicates that Alpha should be at least 0.70 or higher to retain an
item in an “adequate” scale, albeit a lenient cut-off of 0.60 is common in exploratory research.
For other authors, reliability in the range of 0.5-0.6 is usually considered adequate at the early
stages of research (Banerjee & Sriram, 1995). No matter which value we choose as a
reference, the Alpha coefficients obtained in the three repositories are high enough to confirm
the internal reliability of their data.
Considering that the more items Alpha takes into account the more reliable a scale will be, it
is worth looking at table 3 which depicts, per repository, both the values of Alpha and the
number of documents analyzed. A comparison between the IB and DB repositories reveals
the same reliability coefficient of 0.73 albeit in terms of number of documents, the former has
26 documents more than the latter (IB = 66 documents, DB = 40 documents). If we contrast
the DB and TB repositories, an increase of the Alpha coefficient by 110.96 % (from 0.73 to
0.81) is caused by a much higher raise of 180 % in the number of documents (from 40
documents in DB to 72 in TB). These figures seem to indicate that the data obtained from
research activities are more reliable than those got from the review of EDI literature.
INDIRECT
BENEFITS (IB)
REPOSITORY
DIRECT
BENEFITS (DB)
REPOSITORY
TOTAL BENEFITS
(TB) REPOSITORY
ALPHA COEFFICIENT 0.73 0.73 0.81
NUMBER OF DOCUMENTS 66 40 72
Table 3 – Alpha coefficients and number of documents
2.3 Data Analysis
The categorical values assigned to each benefit of EDI allow us to rank the said benefits
within each repository in accordance with the score obtained. The higher a benefit is in the
ranking, the more it has been mentioned in the literature reviewed. As an example, Fig. 3
shows the ranking for the TB repository.
As the rankings differ among the repositories, it is interesting knowing if there is any relation
in the ratings between repositories. Considering that the original observations were recorded
in IB and DB, not in TB which is the combination of both of them, we have measured the
association between the IB and DB repositories. To do so, we took into consideration the
.
ordinal sorting of their variables (benefits of EDI), what allowed us to measure their
correlation via the Spearman’s rank correlation coefficient. The results show a high
correlation between the ratings in the IB and DB repositories because the value of the
coefficient of determination is r
2
= 0.79. Moreover, the result is significant because the
probability that such a result occurred by chance alone is very low: p < 1.309x10
-8
.
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Fig. 3 – Ranking of benefits of EDI, TB repository
Table 4 presents the top 16 benefits of EDI (roughly 2/3 of the total of 23) within each
repository in descending order. It is worth noting the following:
• 15 of the 16 benefits are included in the three repositories, what represents a 93.75 % of
commonality. The benefit “growth” appears only in the DB repository, while “reduce
document processing costs” shows up in both IB and TB.
• In the three repositories, 14 of the 16 benefits (87.5 %) are intraorganizational and the 2
left (12.5 %) are interorganizational. However, in the original classification of the 23
benefits of EDI, 17 out of them (73.91 %) were intraorganizational and the other 6 (26.09
%) were interorganizational. The values are higher in the research than in the initial table
for intraorganizational benefits (87.5 % vs. 73.91 %), and lower for the interorganizational
benefits (12.5 % vs. 26.09 %). These results indicate that the organizations value more the
intra than the interorganizational benefits of EDI.
• The first top 8 EDI benefits from each list are the same albeit their sequence varies within
the lists. This matching can not be considered as a proof to present the said 8 benefits as
“the EDI benefits”, but offers an opportunity to further explore this subject.
• The only two intraorganizational benefits “establish long lasting or closer trading
relationship” and “enhance coordination between trading partners” rank differently in the
lists: higher the former (within the top 7 benefits of EDI) than the latter (within the last four)
in the three repositories. This finding shows that the long term trading relations are more
important for organizations than the coordination with their partners.
.
#
Indirect Benefits (IB)
Repository
Direct Benefits (DB)
Repository
Total Benefits (TB)
Repository
1
Increase document
accuracy
Increase efficiency
(productivity)
Increase document accuracy
2
Increase efficiency
(productivity)
Maintain or gain
competitive advantage
Increase efficiency
(productivity)
3
Reduce processes cycle
time
Increase document accuracy Reduce processes cycle time
4
Establish long lasting or
closer trading relationship
Improve customer service
Maintain or gain
competitive advantage
5
Reduce inventory (and
inventory costs)
Reduce inventory (and
inventory costs)
Reduce inventory (and
inventory costs)
6
Maintain or gain
competitive advantage
Reduce processes cycle time
Establish long lasting or
closer trading relationship
7 Reduce paperwork
Establish long lasting or
closer trading relationship
Improve customer service
8 Improve customer service Reduce paperwork Reduce paperwork
9
Increase information
accessibility and
timeliness
Reduce manpower
Increase information
accessibility and timeliness
10
Reduce document
processing costs
Improve timely availability
of product/service
Reduce manpower
11 Reduce manpower
Eliminate or reduce data re-
entry
Improve timely availability
of product/service
12
Improve timely
availability of
product/service
Improve planning,
monitoring and control
Reduce document
processing costs
13
Enhance coordination
between trading partners
Improve or enforce
intrafirm business processes
Enhance coordination
between trading partners
14
Improve or enforce
intrafirm business
processes
Enhance coordination
between trading partners
Improve or enforce
intrafirm business processes
15
Eliminate or reduce data
re-entry
Increase information
accessibility and timeliness
Eliminate or reduce data re-
entry
16
Improve planning,
monitoring and control
Growth
Improve planning,
monitoring and control
Note: Shadowed benefits are interorganizational, the others are intraorganizational
Table 4 – 16 top benefits per repository
Another inter-repository comparison was based on the Chi-square test; it allowed us knowing
how closely the observations performed in each repository for the same benefit of EDI were.
The non-parametric Chi-square test was chosen for this purpose because the data analyzed
were categorical. Chi-square assesses if the results for the same benefit of EDI in each
repository are different enough to overcome a certain probability that they are due to
sampling error (Connor-Linton, 2007). By convention, a value of p < 0.05 is often considered
significant, that is to say, that there is less than 5% probability that the finding was due to
chance alone.
The Chi-square results obtained per benefit of EDI via the 2x2 contingency table analysis are
depicted in table 5.
The analysis of the Chi-square results shows the following:
• The observed frequency in the bivariate table of five benefits of EDI is low (below 5),
consequently, the chi-square test can not be appropriately used in these cases. Interesting
enough, the said benefits rank within the last 6 of the 23 considered (see table 5).
• Statistical significant differencies exist between the IB and DB repositories for the following
four benefits of EDI: “reduce processes cycle time” (p = 0.006), “establish long lasting or
closer trading relations” (p = 0.039), “increase information accessibility and timeliness” (p =
0.027) and “reduce documents processing costs” (p = 0.012). As p < 0.05, the said
differencies are not due to chance alone.
.
• The discovery of the aforementioned four statistically significant benefits is noteworthy
given that leaving aside the 5 benefits of EDI for which the chi-square test is not
appropriate due to the low observed frequencies, for the 18 left, we would expect only one
statistically significant difference by chance (18 benefits x 0.05 level of significance = 0.9
expected differencies by chance) instead of four.
• No statistically significant differencies exist between the two repositories for the 14
benefits of EDI left because in all of them p > 0.05.
Benefit of EDI Yes Score No Score Yes Score No Score
Increase documents accuracy 49 17 23 17 3.204 0.073
Increase efficiency (productivity) 46 20 25 15 0.583 0.445
Reduce processes cycle time 46 20 17 23 7.641 0.006
Establish long-lasting or closer trading relations 40 26 16 24 4.244 0.039
Reduce inventory (and inv. Costs) 40 26 17 23 3.285 0.070
Maintain or gain competitive advantage 34 32 24 16 0.724 0.395
Reduce paperwork 27 39 14 26 0.367 0.545
Improve customer service 27 39 23 17 2.751 0.097
Increase information accessibility and timeliness 27 39 8 32 4.923 0.027
Reduce documents processing costs 25 41 6 34 6.300 0.012
Reduce manpower 23 43 11 29 0.617 0.432
Improve timely availability of product/service 23 43 11 29 0.617 0.432
Enhance coordination between trading partners 20 46 9 31 0.763 0.382
Improve or enforce intrafirm business processes 18 48 9 31 0.299 0.585
Eliminate or reduce data re-entry 15 51 10 30 0.071 0.789
Improve planning, monitoring and control 14 52 9 31 0.024 0.876
Growth 8 58 8 32 1.206 0.272
Increase effectiveness 7 59 2 38
Reduce the suppliers base 7 59 6 34 0.447 0.504
Improve and enforce interfrms processes and policies
6604 36
Add value through the Supply Chain 4 62 3 37
Increase traceability 4 62 1 39
Facilitate/lead to vertical integration 3 63 1 39
Value of one cell < 5
Value of one cell < 5
Value of one cell < 5
CHI-SQUARE TEST
Value of one cell < 5
Value of one cell < 5
IB Repository DB Repository
Chi-square P-value
Table 5 – Chi-square test
2.4 Limitations of the Study
As the data in the IB and DB repositories are perceptual and they have been extracted from
documents reviewed by a single person, there is a risk of working with biased data. To
mitigate such risk, the authors have used three statistical techniques: the coefficient Alpha of
Cronbach to measure the internal reliability of the data, the Spearman rank correlation
coefficient to determine the strength of association between two variables (EDI benefits), and
the Chi-square test to measure differencies between two samples and the impact chance
has in these differencies.
3. CONCLUSION
3.1 Summary
This study presents a list with the 23 benefits of EDI most cited in a literature review carried
out on 72 documents (69 from 38 specialized journals plus three theses) published over a 18
year period of time (1988-2005). The said benefits are classified by groups (inter and
intraorganizational benefits) and categories (cost, time, information management and
organizational benefits), then ranked in accordance with the scores obtained. The list of
benefits of EDI combined with their grouping, categorization and ranking, constitute a sound
.
basis for users and/or prospective users of EDI, including those involved in SC activities, to
know what EDI can bring to their organizations and/or SCs.
Of the 23 benefits of EDI, the top 8 are the following: “increase document accuracy”,
“increase efficiency (productivity)”, “reduce processes cycle time”, “establish long lasting or
closer trading relationship”, “reduce inventory (and inventory costs)”, “maintain or gain
competitive advantage”, “reduce paperwork” and “improve customer service”.
Finally, it is worth noting that organizations are more interested on the intraorganizational
benefits of EDI than on the interorganizational ones, and that they value long-term trading
relations more than coordination between them.
3.2 Further Research
The list of benefits of EDI identified in this paper constitutes a sound basis for further
investigation. One possibility could be to investigate if the said benefits are valid in various
business situations such as production or service sectors, organizations size, geographical
locations, technology, etc. It could be also wise to check if the top 8 benefits of EDI are the
same in the said business situations, or to know which of the categories of benefits is more
favored by EDI practicioners, i.e. costs, time, information management or organizational?
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