Performance of electronic data interchange in the process of lead time reduction -A process managment focus-

Abstract

The theme of our study is the concept of electronic network. We have studied electronic network in relation to process management. We define process management the process of creating associational relations and sustaining corporate competitive advantage through reduction of lead-time. This definition involves (1) understanding and describing the context in which managers work (2) developing some proper and consistent communication tool and (3) implementing it to create relational alignment and sustain competitive advantage. We have developed our own framework for this study relevant to continue our study of process management regards to the context of Volvo Car Corporation. Our empirical materials are grounded on process management in Volvo Car Corporation and explore how managers in Volvo Car Corporation relate their company to their suppliers. To be clear on this, we looked at electronic network and the way this communicative mechanism can serve improvement of process management in Volvo Car Corporation. In relation to process management, we addressed a couple of questions. The overall conclusion drawn from our study is that, Volvo Car Corporation can improve their traditional communication system based on EDI further by using Internet. By assigning EDI via Internet, there are good possibilities for improvements, in particular, to reduce the lead-time. Further we explored that electronic network can be used in an effective way to improve associational relationship with suppliers. Finally, our study led to presentation of some key-concepts that are relevant for description of process management in Volvo Car Corporation. These concepts; lead-time, risk, less inventory, information technology and use of EDI, are drawn from the context of interviews that we made with suppliers and exchange of view with managers in Volvo Car Corporation. Our study ended up with a presentation of a model that we hope has implication for Volvo Car Corporation.