The use of Artificial Intelligence (AI) can be practically witnessed in every industry. This powerful technology is also being used in the retail and e-commerce industry by companies for inventory management. The use of AI for inventory management provides valuable insights for businesses by analyzing large data volumes. AI in inventory management is making things easy and convenient for the warehouse team, inventory managers, and the business owners.
Inventory management is a key business operation to keep any business running seamlessly. The use of artificial intelligence is streamlining inventory management so that businesses are able to deliver products to customers on-time. Increase in productivity, lower cost, better decision-making, efficient warehouse management, better communication between various departments, and reduction in the demand-supply gap are some benefits offered by AI inventory management.
Statistics indicate that nearly 40.1 percent of the companies are already using AI for inventory management. It is estimated that AI has the potential to add $1.3 trillion to the world economy in the next two decades, if it is used in supply chain and inventory management.
Keeping in mind the huge scope and potential of AI, top companies like Facebook, Microsoft, Amazon, IBM, DHL, and others have already started leveraging the power of AI.
Here are the different ways in which AI is transforming inventory management
Improved demand forecasting and control of the inventory management process
- Do you think that inventory management is all about storage and delivery of goods from one place to another? No, that is just one aspect of inventory management.
- Demand forecasting is another important part of the inventory management process.
- The use of AI for inventory management helps prevent the problem of overstocking and understocking in the warehouse.
- The use of inventory management software can efficiently perform the following to make correct forecasts.
Identifying and responding to a change in demand for a specific product.
Meticulous analysis of real-time data and correlation of demand insights.
Tracking location specific demand.
- By using AI in inventory management, businesses and brands can make accurate forecasts regarding the inventory and ensure that they have the right stock of goods considering the demand from customers
- Better demand forecasting can improve inventory management and ensure that companies don’t lose out on sales due to an out-of-stock scenario for products.
Optimization of logistics routes
- While placing an order, customers want their products to reach them as early as possible.
- The implementation of AI for inventory management can perform optimization of the logistics routes to provide faster delivery and reduce costs as well.
- For example, based on the real-time traffic data and information, an AI powered inventory management software can find the shortest and most optimal route for delivering the order to customers.
- From faster deliveries to saving shipping costs, AI in inventory management can optimize logistics for businesses to deliver goods early to customers.
Smart warehouse management
- The implementation of AI for inventory management can create a smart warehousing system in which the warehouse managers can keep track of all inventory-related activities from a single inventory management software.
- Whether it is communicating with a different team in the warehouse or optimizing the cost of operation, AI inventory management can make it possible.
Real-time predictive maintenance
- AI has the power to predict future outcomes based on predictive analytics.
- By recognizing certain patterns and trends, an AI-powered inventory management software can detect the possibility of anomalies in machines.
- With the use of AI for inventory management, it is possible to continuously monitor the machinery and it’s functioning.
- By identifying problems before they turn big or irreversible helps to increase the machinery lifespan, reduce maintenance cost, and increase production.
- Unscheduled downtime of machines can be prevented with AI in inventory management.
AI-powered chatbots
The use of AI-powered chatbots can provide a lot of benefits in inventory management. Here are the different ways in which AI-enabled chatbots can help businesses.
- Keeping a track of orders from different customers.
- Processing orders from customers and issuing receipts.
- Handling queries from customers.
- Collecting feedback from customers.
Data mining and useful solutions
- The use of an AI-powered inventory management software can monitor, collect, and analyze data, to provide timely insights based on which a company can make the right decisions.
- By transforming data into useful solutions for a particular situation, businesses can understand the demands of clients and chalk out effective strategies to manage the stock according to the needs of customers.
AI for inventory management is the future for sustainable growth and development of businesses. The buying patterns of customers, selection, demand, and supply are constantly changing. AI can transform inventory management by learning about these changes, and eliminating challenges in inventory management.