Previously, EDI connections between enterprises facilitate information sharing but at a high cost. Frequently, a manufacturer with three suppliers needs to invest in three EDI systems. Component technology opens the door for the manufacturer to share information with almost any other supplier that is hooked up to the Internet at a low cost. One consequent is increased competition since the manufacturer would now have a larger pool of suppliers to choose from. By the same token, suppliers also have a larger selection of manufacturers to supply to.
Information sharing leads to task sharing and resource sharing.
There is a tighter integration of the value-added processes of the supply chain that transcends enterprise boundaries. While component technology promotes the ease of document sharing in an enterprise, at the same time, it decreases the functional couplings between departments. Frequently, a company's information system integrates all aspects of the company including its accounting, marketing, human resource, design and development and production departments. De-coupling the departmental dependencies has two benefits. Second, it alleviates the information systems compatibility problem in joint ventures with other enterprises.