Electronic technology and parts procurement: A case of the automobile industry

Inter-firm information systems in the automobile industry have evolved from firm-specific networks to industrial standard networks and, further, to the internet. This paper examines how electronic parts procurement systems in the automobile industry affected its patterns of inter-firm transactions through empirical studies on information networks, transaction systems and architectural characteristics of automobile parts. We argue that selection of a certain parts transaction system tends to affect choice of the mode of information system that might best fit the transaction information between the firms. Conversely, once a particular type of information is chosen, the mode of information exchanges and patterns of competition between suppliers and transaction systems would also be changed. In this way, inter-firm information systems, transaction patterns, and architectures of the parts would co-evolve through dynamic interactions among them.