In our increasingly digital world, artificial intelligence (AI) is becoming part and parcel of our lives –and it is becoming particularly useful to business owners and inventory managers. In this article, we explore the relationship between AI and inventory management, and how AI can assist in inventory management.
What is AI?
AI is essentially a feature of any given software which, like humans, uses the information available to it to reason, solve problems, make predictions and identify solutions. In this way, devices such as laptops, tablets, smartphones and more can “listen” to and observe the information coming to and from itself and its environment, and use that data to answer certain questions or problems.
Some devices are more intelligent than others, truly learning on their own, with little to no direction or pre-set algorithms. An example of AI is the virtual assistant software Siri and Alexa. But AI is also in everything from behavioural algorithms, facial recognition software, self-driving cars, and the “suggested searches” which pop up in our Google search bars.
How is AI used for inventory management?
In recent times, more and more online retailers are adopting AI software to help with things like customer service (most notably with chat bots), collecting data on a customers’ product preferences, using search history information to tailor advertising toward specific customers and more. Inventory managers are also beginning to see the benefits of AI for their primary tasks, too, as AI can help make the inventory management process less manual.
Automated inventory management
One of the most effective ways AI can assist with inventory management is by automating the process. For example, an artificially intelligent system would be able to track and record each sale automatically, monitor its progress through the supply chain in real-time (from manufacture to delivery), and automatically send the customer updates on the location of their parcel. As you can imagine, this process negates the need for much human involvement at all – leading to faster processing times and more satisfied customers.
In the same way that online retailers use AI to gather data on customer preference for a tailored advertising approach, inventory managers can benefit in a similar way. One of the tasks of an inventory manager is to adequately predict the future demand for specific items in the inventory – but in order to do this effectively, they need data about which products will be in demand in future.
AI can help with this by automatically tracking sales, an inventory manager can review historic sales trends to identify which products are going to be in high demand in future. This gives inventory managers a precise guideline with which to make the next order of stock, reducing the likelihood of stockouts or obsolete stock.
Things to consider
There are clearly some huge benefits in the use of AI for inventory management. However, before jumping into adopting AI, inventory managers need to consider how they want the AI to integrate with the company’s existing systems. Get a start in the right direction by considering these things before implementing business intelligence tools.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.