A demand signal is a message issued within business operations or within a
supply chain
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, acti ...
to notify a supplier that goods are required, and is, therefore, a key item of information for demand planners within a business.
Contexts
In a
Just-in-time manufacturing or operations context, a demand signal identifies a need for new materials and triggers a delivery from an internal store or an external supplier. The
Kanban
Kanban (Japanese: カンバン and Chinese: 看板, meaning signboard or billboard) is a scheduling system for lean manufacturing (also called just-in-time manufacturing, abbreviated JIT). Taiichi Ohno, an industrial engineer at Toyota, develope ...
system uses cards ('Kanban cards') to mark the stock level at which a replenishment signal needs to be issued. Kanban cards are a key component of a kanban system as they signal the need to move materials within a production facility or to move materials from an outside supplier into the production facility. The kanban card is, in effect, a message which signals depletion of product, parts, or
inventory
Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation.
Inventory management is a discipline primarily about specifying the shap ...
. When received, the kanban triggers replenishment of that product, part, or inventory. Consumption, therefore, drives demand for more production, and the kanban card signals demand more product — so kanban cards help create a demand-driven system.
In the context of an
Enterprise Resource Planning
Enterprise resource planning (ERP) is the integrated management of main business processes, often in real time and mediated by software and technology. ERP is usually referred to as a category of Business management tools, business management ...
(ERP) system, demand signals function as
granular data indicating discrete requests for the supply or use of a resource. Demand Signal Management (DSiM) provides a means of harmonizing demand data so that it can be used in demand planning.
[Erasmus, P., SAP]
SAP Demand Signal Management 1.0
accessed 3 September 2015 Demand signals must bring together data on actual sales and date on unfulfilled demand in order to be effective.
See also
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Demand signal repository
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
References
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Supply chain management
ERP software