EDI: A Pessimistic Viewpoint

EDI has been promoted as a technology which helps to reduce conflict and enhances collaboration and ‘partnership’ between trading organisations. Is this always the case? In what circumstances are organisations continuing to interact in adversarial ways, and for what reasons? To answer this question, we start by examining the development and application of an EDI network in the motor industry. which dates back to Ford’s arrival in the UK in the 1920s. Nevertheless, the company feels constrained to trade on the terms dictated by Ford, and to conceal the costs and inconvenience of doing so. As for many other suppliers to the automotive industry, Ford is its biggest customer, and this inhibits suppliers from challenging Ford’s approach to EDI. However, also like other companies in the same position, it privately questions whether supplying Ford is worthwhile. In the mid-1980s Ford established a corporate network, Fordnet. The network covers all Ford sites in Europe, and has mailbox facilities for Ford’s business partimposition of the requirement that all future transactions were to be conducted using EDI rather than paper: The Spanish were extremely obedient. Ford is their bread and butter. When we say „Jump“, they jump. The Germans gave us the most trouble. Among other things, they didn’t like the dedicated network. Ford also shows little inclination to reengineer its business processes, at least not outside its own corporate boundaries. The company’s only objective is for its business partners to use its proprietary network; it is unconcerned with the established trading and information handling practices of its suppliers, with the way in which Fordnet cuts across these, and with developing solutions to such incompatibilities. Neither is it concerned with how the data transmitted over the network is used by its trading partners. Ford’s suppliers have enormously contrasting levels of technological sophistication. While over 50% of its trading partners in Germany, for example, are able to integrate EDI messages from Fordnet with their own in-house computing applications, most of its Spanish suppliers have low levels of office automation, and simply ‘view and print’ Ford’s EDI messages. EDI has therefore had no impact at all on their business processes; it has simply meant an additional expense. Serious attention to business process redesign would involve addressing these kinds of inefficiencies throughout the supply chain, and, if necessary, providing training in how to streamline information handling procedures. Companies who supply to Ford find the trading relationship coercive and the strictures of using Fordnet EDI unnecessarily expensive and inconvenient. One supplier complains that doing EDI with Ford has increased the costs of the trading relationship, but has not reduced expense in any way. Moreover, there are technical incompatibilities between Fordnet and the supplier’s computer systems, which the supplier has had to deal with, at its own extra expense and inconvenience. The supplier in question is not a small company lacking market muscle or inhouse computing expertise. On the contrary, it is a large multi-national company with customers throughout the motor industry, with a long-established history of supplying to the motor industry, and indeed, with a trading relationship with Ford