Mark Rainbird

Demand and supply chains:the value catalyst

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 firms value chain operates as a whole. Looking at some retail examples, including McDonalds in particular, it is argued that managing the interaction of a firms 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.

The demand chain as an integral component of the value chain

The term “value chain” encompasses a variety of ideas and concepts. This paper identifies two major themes: a “macro” perspective of how markets operate and, at the other extreme, a process‐driven “micro” view of the individual firm itself. Focusing on the latter in particular, it seems that corporate emphasis is increasingly efficiency based with the prime objective the reduction of costs. The recent difficulties experienced by McDonalds, Sainsbury and Marks & Spencer may be due in part to a single‐minded focus on supply‐chain management. Instead it is argued that a firm is best placed to create value and exploit market opportunities when there is an effective combination of supply‐chain capabilities and demand‐chain effectiveness to maximise the organisations overall value chain. These issues are explored using practical examples from the retail and fast food industries. Questions whether traditional views of marketing are broad enough or whether, just as the logistics manager reinvented himself as the supply‐chain manager and the new corporate hero, the marketing professional needs to reinvent himself as the demand‐chain manager.

Cooperative innovation: a value chain approach

Purpose – The purpose of this paper is to briefly review earlier contributions to partner/cooperative innovation with the aim of evaluating the application of the concept to the increasingly popular virtual/value chain business model.Design/methodology/approach – A number of example cases of partner/cooperative innovation are examined and, although these are limited in number, it would appear that a classification of types of partner/cooperative innovation is possible.Findings – Partner/cooperative innovation combines elements of process and product innovation management within a “network structure” to create a product‐service response that neither partner could create using its own resources. They extend in both directions of the supply chain (upstream and down stream) and include supplier relationship management such as that demonstrated between Dell and its myriad of suppliers, and examples of customer relationship management such as the relationship that Caterpillar has built with its distributor/serv...

A framework for operations management: the value chain

Proposes that a broad perspective needs to be taken of operations management, so that it is no longer seen as the domain of mechanistic functionalism, but rather as the architect and engineer of the business model driving in turn the firms creation of value. Suggests that a value chain approach provides an appropriate framework for such business model architecture. Draws a distinction between industry level value chains and value chain analysis at the level of the firm where the focus is on business processes. Suggests that mapping one against the other is critical to business model effectiveness and the creation of value. Finally, notes that a firms value chain should not be seen as necessarily a series of smooth synchronous links, but as dynamic that creates its own interaction costs. This should not be seen as dysfunctional, but as a source of dynamism replicating the market environment the firm is operating in. While it does not sit well with the notions of scientific management so commonly associated with classical operations management, suggests that this process fusion is a fundamental aspect of the firms operations that needs to be purposefully managed.

Measuring the implications of virtual integration in the new economy

Addresses the appropriate structuring of the firms business model in the context of new economy holonic networks. States that this requires some framework for analysing the firms business model relative to the opportunities offered by those networks and alliances. Proposes that some performance measurement criteria are required that provide a basis for comparing the various options open to the company. Approaches the problem by considering the assessment of the risk that accompanies a decision to outsource a process compared with the alternative option of developing the expertise “in‐house”. Concludes that concepts borrowed from financial management are helpful in this respect and the capital asset pricing model offers a means by which the risk can be assessed.

The demand chain and its place in the value catalyst: an e-commerce example

The concept of the Demand Chain and its place in a firms Value Chain is examined. The notion of a Value Catalyst where a firms Demand Chain processes and Supply Chain process fuse to create Value Outcomes is explored. This analysis is applied to a group of wagering operators in Australia, illustrating how e-commerce technologies have significantly enhanced the Demand Chains of those operators with the resulting Value Catalyst contributing to creation of new Value in those businesses.