Technology has multiplied the potential for information flows through a value chain, but often human behavior hampers it as individuals use the available information to enhance their own position. This happens internally, but is even more prevalent in the interactions between firms, as individuals seek to enhance not only their own position, but the perceived negotiating position of their firm.

A key metric to look at when assessing the health of a value chain is the exchange of information between firms. The actual measurement will usually be a combination of hard & soft data such as joint strategic planning, shared KPI’s, availability of data when needed and in a useable form. A technique I have sometimes found useful is an adaptation of an HR practice, do a “360 degree” performance assessment on the available information amongst those who come into contact with it, and have a use for it.

Another of those paradoxes that exist in human relations, elicited by the information exchange in supply value chains:

Why is it that the passionate exchange of information that occurs on social networking sites is rarely replicated in a value chain?

It seems odd to me that people who are willing to share sometimes pretty personal stuff on a networking site are unwilling to share information of a non- personal nature in a commercial situation, even where the commercial case for the exchange is clearly made.

Such information exchange is a pre-requisite of creating a demand chain from a bog standard supply chain.

Related posts:

“Democtratising knowledge” in demand chains Demand chains as the competitive differentiator. Working Capital Productivity, transaction costs and Demand chains Category management and demand chains.