Why Are Process Monitoring Technologies Valuable? The Use of On-Board Information Technology in the Trucking Industry

Abstract

Recent advances in information technology (IT) have enabled firms in many industries to give middle managers new access to timely production data. Process monitoring' technologies give distant managers a window to production which can both lower their cost of monitoring subordinates and provide them better information toward allocating their firms' resources in the short term. This paper investigates where and why IT-based process monitoring is valuable within the trucking industry, distinguishing between its incentive- and coordination-related benefits. Using truck-level data, it examines how the use of on-board computers varies with characteristics of carriers, shippers, and hauls. It then analyzes these patterns in light of existing theory and relates them to how supply chains are organized.