Journal of Operations Management 20 (2002) 375–387

Technical note
The use of electronic data interchange for supply chain
coordination in the food industry
Craig A. Hill a,∗ , Gary D. Scudder b,1
a Department of Management, J. Mack Robinson College of Business, Georgia State University, P.O. Box 4014, Atlanta, GA 30302-4014, USA
b Owen Graduate School of Management, Vanderbilt University, 401 21st Ave. So, Nashville, TN 37203, USA

Received 26 January 2001; accepted 18 February 2002

Abstract
Supply chain management (SCM) is concerned with the relationship between a company and its suppliers and customers.
It is characterized by interorganizational coordination: companies working jointly with their customers and suppliers to
integrate activities along the supply chain to effectively supply product to customers. More developed SCM is indicated by
systematic integration, i.e. standardized and automatic interorganizational interfaces. Information technology (IT) engenders
such systematic integration by allowing more efficient and automatic information flow.
This research focuses on electronic data interchange (EDI), an important class of IT used for interorganizational information
transfers in the supply chain. Data from a survey of the food industry is used to examine the use of EDI with respect to interfirm
coordination activities involving suppliers and customers. The influence of demographic characteristics on EDI use is also
investigated. The results suggest that firms view EDI as a tool for improving efficiencies rather than as a tool for facilitating
supply chain integration. There is also a surprising difference in firms use of EDI with customers vis-à-vis suppliers. Firms
tend to be much more accommodating of the desires of their customers than of their suppliers. © 2002 Elsevier Science B.V.
All rights reserved.
Keywords: Supplier management; Purchasing; Empirical research; Food industry

1. Introduction chain management (SCM) requires that members of

Firms within a supply chain routinely communi-
cate with each other. This form of interorganizational
communication can occur in many ways, from the
postal transfer of paper invoices and purchase orders
to sophisticated information technology (IT) that links
two companies databases. The development of supply
∗ Corresponding author. Tel.: +1-404-651-3392;
fax: +1-404-651-2896.
E-mail addresses: chill4@gsu.edu (C.A. Hill),
gary.scudder@owen.vanderbilt.edu (G.D. Scudder).
1 Tel.: +1-615-322-2625; fax: +1-615-343-7177.
a supply chain, in this case the supplier and the cus-
tomer, have relationships that would include the co-
ordination of production and logistics activities. This
type of coordination requires supply chain integration,
suggesting that decisions are made jointly with regard
to the two companies’ production, inventory, and de-
livery activities. IT can facilitate supply chain coordi-
nation, particularly when the technologies are used to
span the traditional boundaries of supply chain firms.
This class of IT is referred to as an interorganiza-
tional information system (IOS), with electronic data
interchange (EDI) being an example of such a system.
The use of EDI has the natural effect of increasing

0272-6963/02/$ – see front matter © 2002 Elsevier Science B.V. All rights reserved.
PII: S 0 2 7 2 - 6 9 6 3 ( 0 2 ) 0 0 0 1 7 - 7
376 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387
interorganizational coordination activities, as well as
increasing the integration that occurs between supply
chain members.
The food industry has focused on the develop-
ment of SCM techniques as well as the use of EDI.
The strong promotion of efficient consumer response
(ECR) initiatives by members of the food industry is
evidence of this focus. This paper, through the use of
survey data, explores the use of EDI and supply chain
coordination within the food industry.
2. Literature review
2.1. Electronic data interchange
Our research looks specifically at EDI and its rela-
tionship to supply chain coordination. EDI is defined
as computer-to-computer transmission of standard-
ized business transactions, as found in Walton and
Marucheck (1997). In the food industry, there are
standard interfirm EDI transactions which use the
industry protocols that are defined in the uniform
communication standard II (UCS II).
Our research also explores the frequency and depth
of EDI use within the food industry. Evans et al. (1993)
give a history of EDI and develop descriptions of the
phases of EDI implementation through which an orga-
nization would typically progress. A study on EDI im-
plementation and benefits was published by Williams
(1994), who developed a framework for EDI adop-
tion based on characteristics of the industry and its in-
terorganizational relationships. EDI use and its value
to the organization were explored by Williams et al.
(1998) with specific applications to the freight indus-
try in Murphy et al. (1998). EDI’s impact on customer
service and delivery were studied by Lim and Palvia
(2001) and Ahmad and Schroeder (2001).
2.2. EDI and supply chain management
SCM places an emphasis on the flow of both infor-
mation and material, synchronized to the customer’s
requirements, from raw materials to the end consumer
(Stevens, 1989). In effect, SCM blurs the traditional
boundaries that exist between supply chain entities
through interfirm activities such as: sharing of re-
search and development, the placing of employees
with other firms, development of cost management
systems across firms, collaborative inventory control
and inventory placement decisions. SCM has an em-
phasis that goes well beyond the traditional function of
materials management (Cooper and Yoshikawa, 1994;
Tzafestas and Kapsiotis, 1994). Information sharing
between the buyer and supplier is considered to be a
major indicator of the use of SCM. When informa-
tion flows seamlessly in both directions, the effect is
to create a virtual supply chain. Information transfer
is used, in effect, to integrate the entire value chain
into one longer chain (Shapiro et al., 1993; Rayport
and Sviokla, 1995; Bhattacharya et al., 1995; Towill,
1997). In the context of SCM, the term integration
relates to how closely, particularly at their interfaces,
supply chain entities operate as a single unit. Higher
degrees of integration occur when supply chain mem-
bers automatically coordinate some aspect of produc-
tion. EDI is important since it facilitates frequent and
automatic transfers of information required for high
degrees of integration and coordination within the sup-
ply chain. Conversely, the use of EDI, without the in-
tegration of supply chain activities, will simply speed
up an existing process. This integration requires the
reorganization and restructuring of the relationships
between firms to achieve the full benefit from use of
both EDI and SCM (Konsynski, 1993).
Coordination is an integral part of supply chain in-
tegration. Clemons and Row (1992) focus their re-
search on the coordination between firms, using it to
measure integration. In particular, EDI is an enabling
factor and the first step leading to integrated supply
chains (Swatman et al., 1994; Curran, 1991). Evans
et al. (1993) show that the degree of integration in
SCM depends on the degree of EDI use within the firm.
2.3. Supply chain management and the food industry
Effective implementation of EDI and SCM has great
potential for improving efficiencies within the food
industry’s supply chain. There are three industry pro-
grams in place that promote SCM and the use of
EDI for performing the routine transactions between
trading partners. ECR, the largest program of this
type, focuses on the grocery and food manufacturers’
strategy of developing closer relationships between
distributors and suppliers (Kurt Salmon Associates,
1993). An underlying principle of ECR is the need to
 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387
develop EDI links between the supplier and customer.
The estimated savings through cost reductions that
could come from the use of ECR could potentially ex-
ceed $30 billion. In the foodservice industry, a similar
program, called efficient foodservice response (EFR),
is being implemented with potential savings in sup-
ply chain costs of $14 billion (Smith, 1996). The third
program is the UCS II program that promotes the de-
velopment of electronic data synchronization through
the use of standard transaction sets for transferring
information between retail stores and their suppliers
(Kearney, 1995).
Thomas et al. (1995) give a detailed analysis of the
grocery industry’s structure and exchange patterns.
These exchange patterns have caused demand distor-
tion and amplification in the supply chain, which are
linked to inefficiency within this supply chain. The
grocery industry uses buying practices, such as for-
ward buying, that exacerbate the effect of industrial
dynamics and the bullwhip effect (Lee et al., 1997).
This phenomenon has been estimated to account
for 40–50% of distributors’ inventories. Clark and
Hammond (1997) study the performance benefits that
occur from reengineering the process of supplying
products to the retailer in the food industry. In this
case, EDI is the enabling technology which makes
continuous replenishment possible as a result of the
reengineering process.
Current activity, as described above, makes the food
industry an interesting one to study. Our research looks
at EDI use and the demographics of the food compan-
ies that use EDI. Supply chain coordination and its re-
lationship to EDI use are also explored in this research.
This paper is similar to other research in SCM where
the focus is centered on the relationship between
suppliers and buyers (Ellram, 1991; Cavinato, 1992).
3. Research questions
This research is directed toward answering ques-
tions concerning the frequency of use of EDI in food
industry firms. We also examine how well integrated
EDI is into firms everyday activities. We explore these
questions by looking at the types of information trans-
actions for which a company uses EDI.
Q1 : How prevalent is the use of EDI in the food in-
dustry?
377
Q1a : How many firms use EDI?
Q1b : How integrated is the use of EDI among
firms?
The next section is concerned with determining
which types of firms are more likely to use EDI. For
example, does the size of the firm, in terms of sales
volume and the number of employees, affect their
tendency to use EDI? It would seem likely that larger
firms would be more sophisticated in their communi-
cation with their supply chain partners and would be
more likely to use EDI. Also it would seem that the
market the firm competes in would be an indicator of
whether a firm uses EDI or not. EDI would provide
greater benefits in firms that produce more products
because of the larger number of transactions to be
processed. Market competitiveness could indicate the
need for gaining the efficiencies that would come
from EDI. The research questions concerning the use
of EDI and the firms demographics are:
Q2 : Do the demographics of the firms indicate EDI
use?
Q2a : Does the firms size affect EDI use?
Q2b : Does the company’s market type affect EDI
use?
The preliminary case studies and interviews used to
build the survey questionnaire show that there are sev-
eral activities that are indicative of supply chain co-
ordination. This coordination occurs when interfirm
activities are planned and implemented with mutual
action and agreement between the parties. Some of
these coordination activities would naturally require
the use of EDI technology and some would not. In
this research, to accommodate the comparison of EDI
users and non-users, only the coordination activities
that do not require the use of EDI were included. The
descriptive statistics of the firms usage of these coor-
dination activities form the basis of the third research
question.
Q3 : How disseminated are the coordination activities
in the food industry?
For the development of SCM, firms necessarily co-
ordinate their interfirm activities, including making
mutual decisions and taking actions related to these ac-
tivities. The simple use of EDI would just automate in-
terfirm activities, whereas SCM would integrate these
378 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387
activities. EDI is one technology that facilitates sup-
ply chain coordination. Therefore, is a firm that uses
EDI more coordinated with their supply chain partners
than one that does not use EDI?
For this analysis, the activities related to the cus-
tomer were separated from those relating to the sup-
plier. The last research questions are expressed as
hypotheses and are related to how the usage of EDI
leads to an increased use of supply chain coordination
activities. The hypotheses, separated by customers and
suppliers, are:
H0a . Firms that use EDI have equal customer coordi-
nation to those that do not use EDI.
H1a . Firms that use EDI have more customer coordi-
nation than those that do not use EDI.
H0b . Firms that use EDI have equal supplier coordi-
nation to those that do not use EDI.
H1b . Firms that use EDI have more supplier coordi-
nation than those that do not use EDI.
4. Questionnaire development and data collection
The survey questionnaire had its genesis in ex-
ploratory interviews and limited case studies. The
purpose of the initial research was to gather unstruc-
tured, qualitative information from the industry; in this
case, from the distributors and retailers of food prod-
ucts, as well as food manufacturers. The interviews
and case studies focused on the firms current use of
EDI, benefits from EDI, the implementation process,
and the determining indicators of the successful use
of EDI technology. The case study research was also
useful in gaining insights into the current status of
the use of supply chain coordination in the food in-
dustry. Campbell (1979) and Fielding and Fielding
(1986) suggest the use of this type of multiple re-
search methodology where qualitative, exploratory
research provides a basis for survey questionnaire
development.
A draft questionnaire was developed from the infor-
mation gained from the interviews and the case stud-
ies. It was then reviewed for content validity by two
members of the food industry who were active in the
development of the case studies and closely involved
in an EDI implementation process. The final question-
naire included input from many individuals, both in
industry and in academia, and included refinements
made from the analysis of the results of the pilot study.
The sections of the questionnaire that are relevant to
this research study are presented in Appendix A.
The mailing list was obtained from the American
production and inventory control society (APICS).
The survey was administered with a focus on receiving
the highest possible response rate. A pre-notification
letter was used to overview the research to potential
respondents. The questionnaire included a cover letter,
and a letter promoting the research from the Education
and Research Foundation at APICS. Non-respondents
were later sent a reminder postcard as a follow-up
to the first questionnaire. The non-respondents to
the first survey then received a second questionnaire
and subsequent follow-up postcard. Finally, phone
calls were made to all second round questionnaire
non-respondents.
For the data analysis, both the pilot study and full
survey data were combined, since the two question-
naires were practically identical. The gross response
rate, with a reduction for returns to sender and
pre-notifications of refusal to participate, was 225 out
of 486 or 46.3%. The response rate for usable surveys,
with a further reduction for the respondent being in a
non-food industry, was 185 out of 446 or 41.5%. A
telephone call was made to non-respondents as a last
attempt to persuade them to respond. From the phone
calls, it was ascertained that over 18% of the mailing
list was not available at their listed telephone number
or location. Additionally, there was not an apparent
pattern in the type of companies that did not respond,
or in the reason given for not responding. In general,
it does not appear that a particular type of company
was more likely to respond to the survey, helping to
alleviate the chronic concern for non-response bias in
industry surveys.
The survey respondents were most heavily con-
centrated in food manufacturing, with 70% of the
total respondents indicating that their company per-
formed this function. The next two highest categories
were manufacturers of raw material supplied to food
manufacturers (20%) and distributors to a foodservice
provider (12%). The questionnaire allowed for more
than one type of industry to be indicated by a single
 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387
respondent. With a mailing list from APICS, whose
members are more concentrated in manufacturing, it
would be natural to find a large majority of the re-
spondents in manufacturing or distribution.
5. Data analysis
The cover letter to the questionnaire outlined the
purpose of the research and explained the topic of
EDI and supply chain coordination. The questionnaire,
in this research, focused on three areas; EDI, supply
chain coordination, and company demographics. An
overview of the research questions and data analysis
is given in Fig. 1.
5.1. The use of EDI
One purpose of this research is to learn how preva-
lent the use of EDI is in the food industry and which
types of companies are most likely to use EDI. The
first issue is what percent of the companies in the food
industry use EDI, and of those who use EDI, how fre-
quently do they use it. This measurement should indi-
cate the commonality of EDI within the food industry.
This measure alone lacks the dimension of depth or
Fig. 1. Overview of data analysis.
379
an indication of how assimilated EDI is into the rou-
tine activities of the organization. We approached that
measurement by asking for information about several
specific types of EDI transactions (developed from the
UCS II) the company uses and with how many of their
supply chain partners.
This research also addressed the issue of which
types of companies are most likely to use EDI. We
looked at two demographic dimensions in answering
these questions. The first was company size, measured
in number of employees and sales dollars. The sec-
ond dimension looks at the type of market that an
organization’s product is competing in. The attributes
of the company’s market are product competitiveness,
seasonality, perishability, and the number of competi-
tors in the market. The next two sections look at these
issues.
5.1.1. Prevalence of EDI use
From the industry survey, the number of respon-
dents that used EDI was 133 or 72% of the total food
industry respondents. The average length of time that
these respondents have been using EDI was 5.25 years,
with a range from newly implemented EDI to two
companies that had been using EDI for over 19 years.
In addition, the questionnaire asked for the frequency
380 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387

of EDI use by the company. The categories ranged Table 1

from routine, to on-an-exception basis, indicating that EDI transactions
the activity was used only when requested by the sup- Types of EDI transactions Percent use of EDI
ply chain partner or for another special reason. The With With
majority of the respondents that used EDI do so rou- customers suppliers
tinely (57%) or at least daily (32%). A much lower Invoices 21.1 10.6
percent (11%) used EDI only weekly or on an excep- Purchase orders 28.5 14.0
tion basis. Pricing 11.6 9.6
The depth of EDI implementation within a com- Maintenance 8.0 7.1
pany was measured by asking the respondents to indi- Promotion 7.7 6.6
cate the percentage of the total number of customers Advanced shipping notices 11.5 10.7
and suppliers with whom they use EDI to perform Warehouse orders 19.2 12.5
eleven specific information transfers. These transac- Notices of order receipt 13.9 11.8
tions were identified in the case studies and are stan- Schedule information 9.6 9.7
dard EDI transactions (similar to UCS II transactions) Current production activities 7.7 8.9
and range from invoices through sales activities. For Current sales activities 8.9 8.7
an indication of how many supply chain members the
transactions are used with, the responses were placed
into a five point scale with the following categories: of these variables with EDI use. Analysis of actual
0–5, 6–20, 21–50, 51–75, and 76–100%. category membership, as compared to the expected
Purchase orders and invoices were the largest use membership for each category, indicated that the larger
categories, with over 50% of the respondents indicat- the company, in both sales volume and employees, the
ing that they used EDI with more than 5% of their cus- more likely it is to be an EDI user. Conversely, the
tomers. These two transactions are used as the starting smaller the company, the less likely it is to be a user
point for development of EDI, as they are the most of EDI.
common and routine supply chain activities. Other Using a seven point Likert scale, respondents were
transactions were used less frequently. The transac- asked to rate the characteristics of their company’s
tions for the transfer of production and sales activity product and market. The characteristics of interest
information, along with promotional activity transac- are product seasonality, product perishability, com-
tions, were least likely to be transferred through EDI. petitiveness of the market, and the number of com-
In summary, the transactions that were the most rou- petitors. The results for the two groups, EDI users
tine and frequent, with both customers and suppliers, and non-users of EDI, were measured using the
were the ones most likely to be completed using EDI. Mann–Whitney non-parametric test for difference of
Table 1 shows the average percent of customers and means since the data for these variables was not sym-
suppliers, calculated using the center point of the ques- metric. None of these variables showed significant
tionnaire category value, that a company is currently differences between the two groups. The nature of
using EDI transactions with. the company’s product and market do not, from this
data, predict whether the company is more likely to
5.1.2. EDI use and the firms demographics either use, or not use, EDI. The firms that would seem
The two variables on firm size, sales volume and to receive the most benefits from EDI, firms whose
number of employees, were tested for differences be- products were in a highly competitive environment or
tween the two groups using a Pearson’s chi-square firms that have many transactions because of a larger
test. The test was used to see if there was a differ- number of customers, were not any more likely to use
ence between users of EDI and non-users of EDI. The the technology.
tests showed that there were significant differences be- There might be some other attribute of the com-
tween the two groups on these variables. The level of pany, other than size, that would better predict the
significance is very high for both of these two-sided use of EDI. The reasons might include the forcing
tests, <0.0005. Cross-tabulations were done on each of technology use by a stronger supply chain partner,
 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387 381

segments of the food industry being more likely to use Table 2

EDI, etc. This research did not explore these possible Response on coordination items
alternative reasons, due to the limitations of question- Coordination item Percent of respondents
naire length. The next section focuses on the study of Agree Neutral Disagree
supply chain coordination and its effect on the use of
EDI. Customers
C.1: strives to be 94.7 3.0 2.4
preferred supplier
5.2. The use of supply chain coordination C.2: active in business 69.2 21.9 8.9
practice innovation
This next section of the questionnaire was designed C.3: mutual system design 45.0 21.3 33.7
to measure the degree of supply chain coordination C.4: customers are Partners 73.4 22.5 4.1
C.5: ECR 36.9 35.1 28.0
that a company has with both it suppliers and cus-
tomers. Nine statements were provided with which Suppliers
S.1: try to reduce suppliers 79.3 15.4 5.3
the respondent could either agree or disagree. Based
S.2: active in business 65.9 22.9 11.2
on observations from the case studies, these questions practice innovation
should be good indicators of how closely the company S.3: mutual system design 25.9 27.6 46.5
coordinates its activities with its supply chain mem- S.4: suppliers are Partners 74.0 19.5 6.5
bers. These nine questions were asked with regards S.5: ECR 27.5 39.5 32.9
to both the company’s suppliers and the customers.
Both EDI users and non-users of EDI were asked to
activities with their supply chain partner. The item in-
complete this section of the questionnaire. In this re-
dicating whether their company strives to be the pre-
search, only the indicators that did not include the use
ferred supplier to their customer (C.1) received over
of IT, specifically EDI, were used in the data analysis
90% of the responses in the strongly agree and agree
to accommodate the comparison between EDI users
categories. Also, a large majority of responses indi-
and non-users. This includes five indicators of coor-
cated that they considered their customer and/or sup-
dination with the supplier and five indicators of coor-
plier to be a partner.
dination with the customer.
The one item that did receive a majority of responses
The central research question in this area is: Are the
indicating disagreement was the items concerning the
firms that use EDI more likely to use coordinating ac-
accommodating of supplier needs in the development
tivities with their customer or supplier? This question
of the respondents systems (S.3). The similar item
is approached through the use of Principal Compo-
about customers received a majority of the responses
nents Analysis to develop coordination variables for
in agreement. It appears that the respondents treat their
the customer and the supplier. A t-test was then used
customers needs differently than their suppliers needs,
to test the means between the EDI users and non-users
and in this case, are more willing to accommodate
of EDI on these variables.
the customers needs than the suppliers needs when
developing their information systems.
5.2.1. Customer and supplier coordination
The following are the items concerning customer
The questionnaire measured interfirm coordination
coordination:
through responses to items that are associated with
coordinating activities with both the supplier and cus- C.1: Our company strives to be the preferred supplier
tomer. The respondents were given five point Likert to our customers.
scales with a range from strongly disagree, measured C.2: Our company plays an active role in developing
with a value of one, to strongly agree, measured with innovative business practices between our cus-
a value of five. The questions are divided into two tomers and ourselves.
five-question parts, one for customers and one for sup- C.3: We developed different procedures and systems
pliers. Table 2 provides a summary of these variables. to accommodate each customer’s preferences for
The data is skewed towards agreement with the ma- purchase orders, billing, and delivery.
jority of items that ask about the use of coordinating C.4: We consider our customers to be our partners.
382 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387
C.5: Our company is taking an active role in the imple-
mentation of ECR incentives with our customers.
The following are the items concerning supply co-
ordination:
S.1: Our company strives to reduce the number of
suppliers that are used for a specific item.
S.2: Our company plays an active role in developing
innovative business practices between our sup-
pliers and ourselves.
S.3: We developed different procedures and systems
to accommodate different suppliers preferences
for purchase orders, billing, and delivery.
S.4: We consider our suppliers to be our partners.
S.5: Our company is taking an active role in the imple-
mentation of ECR incentives with our suppliers.
5.2.2. Interfirm coordination and the use of EDI
This section investigates if there is a difference in
the degree of coordination between the two groups
of respondents, those that use EDI and those that
do not. The hypotheses were developed to test this
question. The items that measure this coordination
are the same as those used in the previous analysis.
The variables in this analysis for customer coordina-
tion are C.1, C.2, C.3, C.4, and C.5. The variables
used for supplier coordination are S.1, S.2, S.3, S.4
and S.5.
In the test for internal consistency using Cronbach’s
Alpha, item S.3 was eliminated to raise the alpha
value. The remaining variables were then used in the
PCA, done using varimax rotation and the missing
values were deleted listwise. The analysis yielded the
customer coordination items and the supplier coordi-
nation items extracting into one component with an
eigenvalue >1. The extraction commonalities in both
cases had items, C.3 and S.1, with a low commonal-
ity value. With the removal of these last variables, fi-
nal alpha values of 0.7209 for the customer items and
0.7674 for the supplier items were achieved. The final
PCA was used to develop the coordination variables
used in the analysis of Hypothesis 1.
The total variance explained by the customer co-
ordination factor was 56.140%, and by the supplier
coordination factor was 68.627%. The component
matrixes for both analyses are shown in Table 3. For
both the customer and supplier coordination variables,
all items had a positive loading. These two variables
Table 3
Result of principal components analysis on coordination items
Factor
loading
Customer coordination
C.2: actively develops innovations with customers 0.828
C.4: customers are considered to be partners 0.827
C.1: strives to be the preferred supplier 0.692
C.5: active in developing ECR with customers 0.631
Supplier coordination
S.2: actively develops innovations with suppliers 0.844
S.4: suppliers are considered to be partners 0.824
S.5: active in developing ECR with suppliers 0.818
were then used as measures of coordination in the
testing of the hypothesis that EDI users have higher
coordination than non-users of EDI.
5.2.3. EDI use and supply chain coordination
The hypothesis that firms using EDI have more
interfirm coordination than those that do not, has
been broken into two parts for this analysis. The
first part is for customer coordination and the second
part is for supplier coordination. The results of the
t-test show that there is not a significant difference
(P = 0.658) between the two groups on the coordi-
nation variable for customers. So the null hypothesis
that there is not a difference in coordination with
customers between EDI users and non-users of EDI
cannot be rejected. For coordination with suppliers,
the t-test gave a significant (P = 0.033) result that
the group means are different. There is a difference
in coordination between EDI users and non-users
of EDI and from the descriptive statistics for the
variables means, it is shown that EDI users have a
higher degree of coordination. This allows the re-
jection of the null hypothesis and acceptance of the
alternative hypothesis that EDI users have more co-
ordination with their suppliers than do non-users of
EDI.
The results from these two hypothesis tests indicate
that there is a difference between the use of EDI and
coordination between the company’s customers and
suppliers. The data from the survey indicates that EDI
is not necessarily used for the purposes of coordinat-
ing with the customer. This analysis also shows that
when a company is using coordinating activities with
 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387
its suppliers, based on the coordination variable, they
are more likely to use EDI. It may be inferred that
EDI is a tool used to gain coordination with suppliers,
but not necessarily so with customers. An explanation
for this difference lies in a limitation of this study;
most of the respondents were manufacturers. Perhaps
the wholesalers and retailers of the product have the
power to force EDI systems onto the manufacturers.
So in fact, the firm uses EDI with its customers but
does so in a system not of their own making. When
the firm forms a relationship with its suppliers for the
purposes of implementing EDI, the manufacturer aims
to improve the relationship through coordinating ac-
tivities to entice the supplier into adopting the new
technology.
6. Discussion
6.1. Summary and implications of this research
This research explored how strong the dissemina-
tion of EDI is in the food industry. Beyond just the
number of firms that use EDI, which in this study was
72%, this research explores the frequency of the other
types of standard EDI transactions that are used. This
includes the separation of the relationships a firm has
between their customers and suppliers. While most
firms used EDI for the frequent and routine trans-
actions, invoices and purchasing orders, they were
not using EDI as often for the transactions that are
more coordinating, such as transferring current sched-
ules, production, and sales activities. This suggests that
firms may see EDI as a tool for improving efficiencies
rather than a tool for developing SCM. A surprising
result was the difference in the use of EDI depend-
ing on whether the supply chain member was a cus-
tomer or a supplier. More EDI activity was seen with
the customer than with the supplier. One limitation of
this study is the use of a mailing list that is heavily
populated in manufacturing. The differences between
supplier and customer treatment may be linked to the
firms position in the supply chain rather than the char-
acteristics of the firms.
The likelihood of a firm using EDI is correlated to
firm size, measured in both sales dollars and number
of employees, but not with the type of market where
the firms are placed. Obviously the larger a firm, the
383
more efficiency may be gained from automating sup-
ply chain activities. So it is not unexpected that the
larger firm is more likely to adopt new technologies.
With regard to the market type and competitiveness
of this market, the adoption of EDI is not correlated.
It is an unexpected result since the larger the num-
ber of transactions and the more competitive pressures
placed on the firm, should lead the firm to develop
technologies that bring efficiencies as well as ties to
their supply chain members (coordination).
Additionally, hypotheses were tested as to whether
or not EDI users are more coordinated with their
customers and suppliers than non-users of EDI. The
results show that companies would use EDI to become
more coordinated with suppliers, but not necessarily
with their customers. It may be a characteristic of
manufacturers that they try to satisfy the customer
requirements. In their relationship with their suppli-
ers, the manufacturers may find a need to encourage
participation in the process of adopting EDI. Perhaps
a better indication of the coordination would be the
characteristic of the supply chain partner not the firm
itself. This research did not address this question.
6.2. Extensions and future research
There are questions that are left unanswered from
this research such as: Do the customer or supplier
characteristics affect the adoption of SCM and EDI by
a firm? Are these characteristics a stronger influence
than the characteristics of the firm? Further research
could look specifically at one position in the supply
chain such as the retailer; or intentionally develop a
respondent profile that is representative of the entire
chain. Extensions to this research would include lon-
gitudinal studies, as well as studies in different indus-
tries. The development of measures of performance
as well as the measures of performance improvements
coming from the use of coordination activities and
EDI with the food industry would be the next logical
step.
Acknowledgements
This research has been supported in part by the
APICS E&R Foundation.
384 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387

Appendix A. Abbreviated questionnaire

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386 C.A. Hill, G.D. Scudder / Journal of Operations Management 20 (2002) 375–387
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