Although the potential for EDI (Electronic Data Interchange) to improve performance of firms involved in industry value chain is widely known, little evidence regarding improved performance for the entire supply channel has been reported. Some researchers have found that EDI networks can benefit EDI champion, but it remains largely unclear whether EDI adopters--who are often coerced to implement the electronic networks by the champion--gain similar payoffs from their EDI investments. To measure impacts of EDI investments for the EDI adopters, we have investigated the performance of 31 grocery retail chains (EDI adopters) that implemented EDI networks with Campbell (EDI champion) for a supply channel reengineering innovation known as "continuous replenishment process." Analysis of daily data on inventory and stockouts levels for the 31 retail chains demonstrates that these EDI adopters have achieved a significant increase in their inventory turns while simultaneously reducing stockouts as a result of this EDI-enabled supply channel reengineering. This paper thus provides empirical evidence that EDI adopters can achieve dramatic performance improvements if EDI networks are used for inter firm process reengineering.
Over the past few years, various electronic market systems have been introduced by market-making firms to improve transaction effectiveness and efficiency within their markets. Although successful implementation of electronic marketplaces may be found in several industries, some systems have failed or their penetration pace is slower than was projected, indicating that significant bathers remain. This paper analyzes the economic forces and barriers behind the electronic market adoptions from the perspective of market process reengineering. Four cases of electronic market adoption--two successful and two failed--are used for this analysis. Economic benefits are examined by investigating how the market process innovation enabled by information technology (IT) reduces transaction costs and increases market efficiency. Adoption barriers are identified by analyzing transaction risks and resistance resulting from the reengineering. Successful deployment of electronic market systems requires taking into account these barriers along with the economic benefits of adoption. The paper presents suggestions based on these case studies, which are relevant to the analysis, design, and implementation of electronic market systems by market-making firms.