Information as a substitute for inventories

Dudley, Léonard; Lasserre, Pierre

doi:10.1016/0014-2921(89)90038-x

Cited by 40 publications

(24 citation statements)

References 5 publications

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“…In two such studies Strassman foimd no correlation between IT investment and productivity or profitability [63,64]. Sometimes, even when IT spending is shown to improve intermediate variables of organizational productivity such as improved communication leading to the need for reduced inventories [20], it does not necessarily lead to improvements in productivity [7]. However, in a firm-level study Brynjolfsson found that firms that reengineered were significantly more productive than their competitors [10].…”

Section: Literature and Research Propositionsmentioning

confidence: 99%

Information Technology Payoff in the Health-Care Industry: A Longitudinal Study

Devaraj

Kohli

2000

Journal of Management Information Systems

439

236

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He has worked on several projects for companies examining the impact ofthe technological environment, justin-time manufacturing, work teams, and perfonnance evaluation systems on manufacturing performance. He has also studied the impact of technology investments and technology usage in the health-care industry. In the field of service quality, Dr. Devaraj conducts research on consumers' perception of service and product quality in the automotive industry. He teaches courses in management of technology, operations management, and business statistics. ABSTRACT: With the enormous investments in Information Technology (IT), the question of payoffs from IT has become increasingly important. Organizations continue to question the benefits from IT investments especially in conjunction with corporate initiatives such as business process reengineering (BPR). Furthermore, the impact of technology on nonfmancial outcomes such as customer satisfaction and quality is gaining interest. RAJIV KOHLI is the ProjectHowever, studies examining the IT-^erformance relationship have been far from conclusive. The difficulty in identifying impacts from technology has been the isolation of benefits of IT from other factors that may also contribute to organizational performance. Furthermore, benefits from technology investments may be realized over an extended period of time. Finally, IT benefits may accrue when they are done in concert with other organizational initiatives such as business process reengineering. This calls for studies that take into account control variables as well as data that span time periods.In this study, we examine monthly data collected from eight hospitals over a recent three-year time period. We specify propositions that relate investments in IT to performance, and the combined effect of technology and BPR on performance. We draw DEVARAJ AND KOHLIupon the literature in health-care management to incorporate appropriate control variables in the analyses. Our results provide support for the IT-^erfonnance relationship that is observed after certain time lags. Such a relationship may not be evident in cross-sectional or snapshot data analyses. Also, results indicate support for the impact of technology contingent on BPR practiced by hospitals.KEY WORDS AND PHRASES: business process reengheering, health-care infonnation systems, infonnation technology payoff, information technology productivity. CHANGES IN THE HEALTH-CARE BUSINESS RESULTING FROM CAPITATION and de-clining reimbursement have led to cost-cutting measures through improved operations. In some cases, failure to cut costs threatens the fmancial viability of healthcare organizations. While on the one hand investment in IT is seen as an enabler of efficiency and competitiveness, it is also a significant fmancial investment that, if not linked to improved organizational performance, can hasten the decline of an organization. Given this scenario, the issue of IT payoff has come under close scmtiny.While IT payoff has long been a subject of research and intens...

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Section: Literature and Research Propositionsmentioning

confidence: 99%

Information Technology Payoff in the Health-Care Industry: A Longitudinal Study

Devaraj

Kohli

2000

Journal of Management Information Systems

439

236

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“…Also see Bresnahan [1986], Dudley-Lasserre [1989], Jonscher [1987], Morrison-Berndt [1991], Parsons et al [1990] and Osterman [1986]. The effects of a more general notion of high-tech capital are examined by Bregman, Fuss and Regev [1991].…”

Section: Footnotesmentioning

confidence: 99%

High-tech capital formation and economic performance in U.S. manufacturing industries An exploratory analysis

Berndt¹,

Morrison

1995

Journal of Econometrics

238

131

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To what extent have investments in "high-tech" office and information technology capital "delivered" in terms of reducing costs and facilitating productivity growth? In this paper we report results of an exploratory effort examining relationships between investments in high-tech office and information technology capital (OF) and alternative industry performance measures such as labor and multifactor productivity, gross returns to capital, real ex post internal rates of return, and markups over variable costs.Our data is at the two-digit manufacturing level of detail, annual from 1968 through 1986. The capital data on high-tech investment and capital is taken from the capital stock study published by the US Bureau of Economic Analysis, which in turn is based on BEA capital flow tables, input-output tables, and data from the Census and Annual Survey of Manufactures. The hightech OF capital data is a Divisia quantity index comprising office, computing and accounting machinery, communications equipment, scientific and engineering instruments, and photocopy and related equipment.Our principal findings are as follows. We find only very limited evidence indicating a positive correlation between industry profitability and OF/K, the share of OF capital in the total physical capital stock. However, when we employ industry-specific output deflators, results change considerably. For example, in terms of multifactor productivity (MFP) growth, we find that increases in OF/K are negatively correlated with growth in MFP; furthermore, rather than being aggregate labor-saving, increases in OF/K tend to be labor-using.

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“…Most probably, inventories for raw materials as well as finished goods 13. Dudley and Lasserre (1989 have to be larger if most raw materials and final products are either imported or exported. The average total of imports plus exports was calculated as a percentage of GNP over the years 1997-2001.…”

Section: Openness Of the Economymentioning

confidence: 99%

Are Inventories a Buffer Against Weak Legal Systems?

Raja

Schaefer

2007

Kyklos

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SUMMARY Weak legal enforcement of contracts leads to inefficient breach and an overall increase in breaches for firms and individuals. We suggest that firms use inventory holdings as a means to counteract weak contract enforcement. We test the hypothesis that firms operating in weak legal environments have a higher ratio of inventories to net sales than firms operating in strong legal environments. Empirical evidence in support of the hypothesis using data from over three hundred comparable firms from fourteen product groups across thirty‐nine countries is presented.

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Information as a substitute for inventories

Cited by 40 publications

References 5 publications

Information Technology Payoff in the Health-Care Industry: A Longitudinal Study

Information Technology Payoff in the Health-Care Industry: A Longitudinal Study

High-tech capital formation and economic performance in U.S. manufacturing industries An exploratory analysis

Are Inventories a Buffer Against Weak Legal Systems?

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