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Private Network EDI vs. Internet Electronic Markets: A Direct Comparison of Fulfillment Performance

Author

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  • Yuliang Yao

    (College of Business and Economics, Lehigh University, Bethlehem, Pennsylvania 18015)

  • Martin Dresner

    (Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742)

  • Jonathan Palmer

    (Principia College, Elsah, Illinois 62028)

Abstract

Prior literature has documented the performance benefits from the use of electronic data interchange (EDI) and the Internet. Using purchase and fulfillment records from the U.S. government's Federal Supply Service, we provide a direct comparison of performance between a private network EDI channel and an Internet electronic market. Performance is measured using order cycle time and complete orders fulfilled. Our findings show that the Internet-based electronic market outperforms the EDI-based channel on these two important measures. Order cycle times were significantly lower when using the Internet-based electronic market, whereas the percentage of complete shipments was significantly higher after controlling for product, transaction, seller, and buyer-specific factors. The electronic market even outperforms the EDI channel when buyer and transaction characteristics favor the use of EDI. Because EDI is still prevalent in many industries, these results point to the gains that may be realized by switching to the newer technology.

Suggested Citation

  • Yuliang Yao & Martin Dresner & Jonathan Palmer, 2009. "Private Network EDI vs. Internet Electronic Markets: A Direct Comparison of Fulfillment Performance," Management Science, INFORMS, vol. 55(5), pages 843-852, May.
    • Handle: RePEc:inm:ormnsc:v:55:y:2009:i:5:p:843-852
    DOI: 10.1287/mnsc.1080.0990
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    References listed on IDEAS

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    Cited by:

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    4. Christine Harland, 2021. "Discontinuous Wefts: Weaving a More Interconnected Supply Chain Management Tapestry," Journal of Supply Chain Management, Institute for Supply Management, vol. 57(1), pages 27-40, January.
    5. Yuliang Yao & Martin Dresner & Kevin Xiaoguo Zhu, 2019. "“Monday Effect” on Performance Variations in Supply Chain Fulfillment: How Information Technology–Enabled Procurement May Help," Information Systems Research, INFORMS, vol. 30(4), pages 1402-1423, December.
    6. Yuliang Yao & Kevin Xiaoguo Zhu, 2012. "Research Note ---Do Electronic Linkages Reduce the Bullwhip Effect? An Empirical Analysis of the U.S. Manufacturing Supply Chains," Information Systems Research, INFORMS, vol. 23(3-part-2), pages 1042-1055, September.
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    8. Richard A. Schneible Jr & Neil Fargher, 2016. "Information transfer and firm-level strategy," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 56(4), pages 1119-1148, December.

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