Artificial Intelligence In Inventory Management – How To Optimize Your Warehouse Inventory Management
Why is optimizing Warehouse Inventory Management a need of the hour? In the modern business world, the small and medium businesses (SMBs) and the global conglomerates no longer operate in watertight compartments. In this close fight between global conglomerates and SMBs, the chances of winning rest with the competitor who has the right resources, smart insights, and appropriate management skills.
Inventory management is one of the many crucial areas of business and to play the field right, you need an inventory management system that ranges beyond basic reordering and stock monitoring to include everything from end-to-end production and business management to demand forecasting and lead time to analytics, reports, and more. Inventory management involves creating a balance between demand and supply with the right amount of stock at the right place, at the right time.
Why is warehouse inventory management necessary?
If your business stores products in a warehouse, you must know what happens to every unit that’s stored. Warehouse inventory management is necessary for tracking the products your business keeps on hand so that you can maintain optimal levels and quickly fulfill customer orders.
It’s important to understand how to develop a warehouse management plan and choose an inventory management software that can help you track, assess, and take action when needed. This allows you to stay informed about your stock, prevent loss and theft, and keep customers happy by fulfilling their demands.
A smart assistant for better warehouse inventory management
After making strides in so many other fields, Artificial Intelligence (AI) is now ready to take the world of the supply chain by a storm. AI seems to have an answer to most of the inventory management, warehouse, and other supply chain issues.
Issues like managing huge amounts of inventory data, tracking every item in the inventory, real-time collection and processing of data, maintaining cost-effectiveness throughout the chain, and keeping track of IT assets across the system can be resolved with careful implementation of an AI-based inventory management system.
Leveraging the power of AI for inventory optimization
Inventory management is no longer just storing and delivering items. E-commerce and digital transformation have changed consumer behavior drastically and businesses stuck with old, legacy technologies and processes do not have the capacity to handle this change. Businesses with real-time perpetual inventory management systems that can dynamically communicate with online and in-store transaction processing systems will emerge as the winners in a world driven by consumers.
A scalable business depends heavily on the kind of systems you have implemented. Businesses that still rely on manual entry of inventory items in spreadsheet documents cannot have an accurate measure of the product they have on hand. So, what’s the solution? It’s quite simple actually, your data needs to harness the power of Artificial Intelligence (AI), Machine Learning (ML), and data science. This will help you
independently transform your demand forecasting and inventory so that understocking and overstocking situations can be avoided.
With AI-powered inventory management systems, transform your unstructured data into actionable insights that can help your business evolve with benefits of SKU rationalization or respond well to a particular situation. AI can help you provide inventory management solutions by analyzing factors like weather conditions, events, economy, product trends, and much more. It can turn your error-prone assumptions into a definite result while reducing the workload of your staff.
Because a smart business needs a smart warehouse
Wouldn’t it be convenient if you could receive communication about delays in delivery or information about trends in advance to make quick decisions? An AI-powered smart warehouse lets you do that.
A smart warehouse lets you leverage Machine Learning algorithms to learn from historical data, leverage benefits from SKU rationalization and make practical decisions for the warehouse. With the data gathered from sensors, the system helps you notice patterns and suggests actions so that you can replenish nearly out-of-stock items quickly and meet demands faster.
AI In Inventory Management offers many benefits:
- AI is capable of providing insights that were previously unavailable.
- The major problem with legacy inventory management systems is that they use legacy demand forecasting algorithms that lack channel-specificity and thus, fail to understand online shopping demand
- The bias towards in-store shopping as predicted by legacy systems is less accurate for digital channels, which often creates delivery mishaps.
- AI-powered, real-time, autonomous, and channel-specific inventory management software can help you understand both in-store and online demand signals. They create forecasts that are accurate by item, store, date, and time.
Lastly, Reinforcement Learning, a domain of AI which doesn’t just make predictions or classifications but also acts on these predictions, can be leveraged to predict and manage user demand, supplier backorders, warehouse optimization, and stock levels. This advanced artificial intelligence strategy takes quick charge of your inventory operations, complete with human checks and insights.
Optimizing your warehouse inventory – it’s easier than you think!
Of course, it’s easier with AI! AI-powered warehouse inventory management software can accurately forecast patterns and streamline information processing so that businesses can better manage their
inventory. They eliminate the need for manual database updates and reduce mistakes significantly.
1) Resolving bottlenecks, mitigating costly risks
One of the many benefits of AI-powered warehouse inventory management software is to prioritize critical processes to meet demand and resolve bottlenecks as they appear to eliminate costly risks later. The system finds improvement opportunities in disorderly supply networks to meet expanding capacity requirements.
2) Accurate demand planning
With a state-of-the-art data-driven, go-to planning and demand forecasting tool, it becomes easier to accurately analyze and correlate demand insights and quickly respond to the changes in market demand
and inventory needs. With the help of AI, you can easily predict near-future demand patterns to simplify the flow of materials, processes, and output across your supply chain.
3) Urgent alerts on low inventory, incidents, and more
An important element of Artificial Intelligence (AI) in the inventory optimization processes is creating urgent alerts for low inventory, delivery delays, and incidents as they occur. Your system should be able to create automated inventory alerts to enhance the speed of order shipments and make your business operations more efficient.
4) Analyze performance and save costs
Apart from benefiting from the increased visibility and accuracy of inventory management, AI can be used to analyze the performance of suppliers, products, and employees, which can lead to potential cost savings and improved quality.
5) Create an optimized supply chain
Unlock agility and efficiency in your supply chain with AI. Get deep-rooted visibility into your chain and grassroots-level view of resources and processes to make data-driven decisions and drive profitability with optimized processes.
6) Leveraging Big Data to enhance customer experiences
AI gives you the power to access data whenever and wherever you need it and derive insights as quickly as possible. Additionally, the relationship between supply chain leaders and customers is heavily dependent on the supply chain’s relationship and processes to access information from Big Data, another component that AI can streamline.
Understanding warehouse and inventory today with AI
According to the 2020 McKinsey Global Survey on AI, 50% of businesses have adopted AI in at least one business function. It has also been found that the product or service-development and service-operations functions have the highest rate of AI adoption, and within these functions, the largest shares of businesses have reported revenue increases for inventory and parts optimization, pricing and promotion, customer-service analytics, and sales and demand forecasting.
AI can offer aid in both physical tasks such as relocating and tracking items or more complicated processes in which advanced insights are required for an error-free planning or demand forecast.
ThroughPut’s AI-driven ELI gives you an integrated view of your inventory and warehouse. It helps you automate processes related to the warehouses, stocking, and more. You can eliminate redundant, manual, error-prone processes with best practices and best-of-breed operational algorithms that ELI comes equipped with to meet consumer demands, chase market patterns, and make accurate forecasts based on historical data.
So, if you’re ready to move on from guesswork and assumptions about inventory and warehouse, request a demo with ThroughPut, to not only enhance your warehouse intelligence but also to meet your consumers’ expectations and go beyond.