Opportunities of effective integration of EDI for small businesses in the automotive industry

The efficiency gains from electronic data interchange (EDI) for the auto-manufacturers are well documented in current literature, but the subcontractors often being coerced into using EDI have received less attention. Thus, this study tries to better understand the EDI use and its evolution by small partners in a network structure of dyadic relationships where large partners may dominate. The model developed in this study shows that small businesses, often operating as suppliers for larger companies, could benefit in many ways from EDI through more extensive business integration with their own and their partners' value chains or an expanded customer base. Our empirical findings indicate that usually small businesses have used EDI in a way that was; originally established by their principal, but they have not used the additional opportunities. We analyzed the reasons for this and developed both, organizational and technological means for small businesses to solve the problems and more fully utilize the possibilities offered by these information technologies. (C) 1998 Elsevier Science B.V. All rights reserved.