"Demand Chain Management in Manufacturing and Services: Web-Based Integration, Drivers and Performance"
Journal of Operations Management
2002, 20, pp. 729-745
Demand Chain Management (DCM) is defined as "practice that manages and coordinates the supply-chain from end-customers backwards to suppliers...Specifically, end-customers trigger actions up the supply chain and products and services are pulled (not pushed) from one link to the next based upon demand." The article identifies four web-based demand and supply integration strategies: (a) web-based low integration; (b) web-base supply integration; (c) web-based demand integration; and (d) web-based Demand Chain Management (DCM). A survey was given to VPs of Operations or General Managers in 187 manufacturing firms and 298 service firms. These respondents rated into which of the above four categories their organization fell. They also reported performance data for their organizations. Results of the survey indicated that the manufacturing organizations that used Demand Chain Management had superior performance, with web-based low integration manufacturing organizations performing worst. The researchers only found one service company (a high-performer) using Demand Chain Management, but web-based demand integration service organizations outperformed web-based low integration service organizations. The article presents the following conclusions: "Manufacturers already pursuing the supply and demand integration strategies have the simplest next steps. Although easier said than done, these groups need to make the final leap and begin integrating the up or downstream side of their supply chains using the Internet. The low integration manufacturers and services, on the other hand, have a much harder task. They need to start implementing the web-based supply and demand integration that unlocks performance. Although this is a daunting task, the alternative of trying to compete without integration is worse since their survival may ultimately be at stake."Back to top of page
