Over many years of being involved in the evolution of demand chains, there appears to be a number of stages through which they evolve. It is almost always iterative, often with many false starts and dead ends, but those that persist, display the following stages:

  1. Catalyst. At some point, someone yells, “There must be a better way!”. Generally this happens in tough times, about now would be appropriate.
  2. Pre-chain. This occurs as a few look around at the data, and wider commercial environment trying to identify a better way for them. Most do not go beyond this investigation, as it now starts to get hard.
  3. Cautious first steps. Generally a relatively simple collaboration centered around something they all use or need, such as carton, transport or service supply, that is essentially non competitive.
  4. Commitment to a chain as a competitive differentiator. Key here is to collaborate using information that in less enlightened times would have been seen as proprietary.
  5. Evolution to a demand chain. This takes time, commitment and is a journey with no end, just an evolving chain that continually improves its ability to react to short term changes in consumer demand, as well as being sufficiently adaptable to evolve its business model to accommodate evolution in the commercial environment. Examples of true demand chains are few and far between.  Dell computers lauded “build to order” business model is the best known example of a large business that acts as a manager of a demand chain. It is one of the many models around, largely housed in small businesses where the strains of dumping the status quo are more easily managed.