A demand chain is an interconnected series of business processes and activities

A demand chain is an interconnected series of business processes and activities designed so firms can understand manage and motivate customer demand in markets within the firms current and potential capabilities and product range. If a firm does not understand its demand chain it is impossible for the firm to design an effective supply chain. A value chain is essentially the demand chain plus the supply chain. Although presented as two distinct areas for analysis in reality the demand chain and the supply chain must be harmonious especially at the point of achieving the Value Proposition (refer to Figure 1.1 on page 19 of the Walters and Rainbird (2007) textbook for an illustration).