Demand and supply chains:the value catalyst

Abstract

The notion that firms have demand chains as well as supply chains is one that is gaining currency. It is suggested that taking a broad perspective of the demand chain as all those processes in the firm which interact with and translate customer requirements throws a new light on how a firm's value chain operates as a whole. Looking at some retail examples, including McDonald's in particular, it is argued that managing the interaction of a firm's supply chain and its demand chain is critical to the effectiveness of that entities business model. This interaction involves a fusion of processes in what is termed a Value Catalyst. This catalysis effect involves interaction costs and tension as processes continually bundle and unbundled. It is argued that while the deliberate creation and purposeful management of tension may seem odd, it in fact accords with day‐to‐day management reality and is a potential source of dynamism within the firm.