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International Journal of Purchasing and Materials Management

The Relationship Between EDI and Supplier Reliability Members Only Content

Past studies into EDI have shown, mostly by examples, that EDI can be used as a supplier management tool to achieve improved supplier reliability by providing both trading partners with better information. This, in turn, leads to closer supplier relationships, fewer late orders, and a decrease in problems with delivered quality, quantity, or mix. The research discussed in this article tests this contention by examining EDI usage patterns and supplier reliability in a sample of 30 companies that transmit purchase orders to their suppliers via EDI. The study found that the quality of delivered products and materials, as well as the delivery of the correct item/mix, is related significantly to (1) the buyer's experience using EDI as a tool in supplier management; (2) the willingness of both the buyer and supplier to share sensitive production and capacity information; (3) the acquisition of the EDI system; and (4) the level of EDI integration with other computer applications. Integrating the findings of this study with past research suggests that EDI can be used as part of an overall supplier management strategy to improve supplier performance and reduce the cost associated with materials acquisition.

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