The demand chain is therefore not something to be added to the end of a “super supply chain” – it is a dynamic in its own right. These notions of demand and supply fundamentally overlap and interact and should be seen as constituent, but independent elements of what has been termed the firm’s value chain. It is also worth noting that having both competent and workable supply and demand chains are competitive necessities. The best factory in the world is useless if it is producing the wrong product. The best innovation is worthless if it cannot be implemented. Competitive advantage can however be spawned by excellence in either supply chain processes or demand chain activities, or of course preferably both. For the academic or practitioner this notion of an independent, cross-disciplinary demand chain interacting with a firm’s supply chain as a value catalysis is important for a number of reasons:
. It provides a “whole of enterprise” context for demand-related activities rather than the fragmented application of marketing techniques that is often found.
. It legitimises what might otherwise be thought of as dysfunction tension within a firm between demand and supply drivers. Within this context the challenge for management is to minimise internal transaction costs that arise from non-legitimate conflict while still maintaining the dynamism that market forces bring to bear.
. It removes the missionary status of marketing as the “owner” of customer values which have to be inculcated in the rest of the firm, and provides a broader perspective of how a firm should meet its customer’s needs