How Can AI Be Used in Inventory Management? 

Using artificial intelligence, AI inventory management optimises and enhances the inventory process and reduces discrepancies, such as reduction of the quality of stock and errors in stock records. This system can work on various use cases within businesses, allowing improvements and decisions to be made which are backed by data. These include: 

• Real-time visibility: AI helps to improve visibility throughout the warehouse. Inventory items are connected to sensors, allowing large amounts of data to be shared through software. By using AI, this data is broken down into useful information, allowing improvements to be made. 
• Warehouse operations: Using real-time data, AI can help to optimise a warehouse, increasing functionality. By using data including product size, demand and turnover rates, AI inventory management can recommend the most effective storage solutions and streamlining warehouse processes to improve operational costs and customer or business lead times.
• Supplier management: AI inventory management can also be used for supplier management, allowing you to analyse supplier performance data. This allows businesses to make informed decisions when selecting a reliable and cost-effective supplier, allowing negotiation of terms. 
• Error detection: AI can help to reduce discrepancies in sales patterns and inventory levels. This can help to identify issues such as possible thefts. Highlighting these issues allows businesses to quickly react and make any relevant changes to maintain the integrity of inventory and increase operational efficiency. 

When computers and inventory management software were introduced in the 1980s, this completely changed the way businesses were keeping track of their stock, removing physical records and making these digital. When computer software was added into the workplace, tasks that were completed regularly could be automated, reducing the number of errors, improving accuracy, and freeing up staff. 

With data being more accurate, better decisions could be made. Now that these were all backed by reports, businesses could focus on changes that needed to be made, such as reducing the amount of stock to align better with supply and demand. This reduced the amount of waste and cut costs.  

In the 1990s, Enterprise Resource Planning (ERP) was introduced. Although ERP can be traced back to the 60s, it wasn’t until the 90s when the true systems of ERP were introduced.  This ensured that all companies were adhering to the same inventory management principles. From demand forecasting to inventory turnover, all inventory companies globally completed the same operations in similar ways. 

Now with the use of AI in inventory management systems, these principles are being taken one step further. Businesses are now ensuring that customer demand is delivered but with less stock in the warehouse. With the use of AI and predictive analytics, demand forecasting has also been taken to the next level. This allows businesses to determine the right amount of stock without the possibility of overstocking and out stocking. 

The landscape of inventory management has changed drastically over the last 40+ years, and we expect it to continue to evolve further, making principles and processes run smoother, increasing accuracy & efficiency and reducing costs. 

AI in inventory management can work in a wide range of industries. How they work is where it differs. Whether you are an eCommerce business or in the manufacturing industry, having an inventory management tool can streamline your practices. Here are some examples of how AI inventory management can be used in eCommerce, the food industry and manufacturing. 

AI in eCommerce  

An AI inventory management tool can have a significant impact for eCommerce companies. By enhancing demand forecasting, optimising stock levels, automate procedures will increase efficiency and customer satisfaction, no matter what size the company is. 
Data which was manually processed can now be handled using AI. This will not only save time, allowing staff to focus on more pressing tasks, but insights can be easier to spot. This allows for businesses to adapt their stock levels, reducing the chances of overstocking or stockouts. 

AI in the Food Industry  

AI inventory management in the food industry is used to optimise stock levels, reduce costs and  product waste and increase efficiency. Like eCommerce, AI can be used to track data and predict the demand of products. However, AI can also be used to automate ordering and track perishable goods, ensuring that stock stays fresh when it hits the shop floor, reducing cost and wastage of products for the entire supply chain. 

 AI in Manufacturing

AI inventory management within manufacturing allows you to track every step in the production process. From keeping track of raw materials, to planning, production and sales, you’ll be able to keep an eye on production to ensure everything’s running smoothly. This can be done through a few different features such as purchase and supplier management, batch and serial number tracking and sales quotes. 

AI inventory management can influence many factors that were typically performed manually, such as combing through data. However, with the use of AI, these tasks can now be done automatically, allowing important insights to be found and decisions to be made quicker.

Demand Forecasting 

Through real-time data, demand forecasting gives companies a better idea of what customers are wanting, what products are selling the best, and the least. By providing real-time data, AI can pick out these insights, allowing companies to change their strategies and focus on the products that are performing the best. 

Real-Time Inventory Tracking  

Real-time inventory tracking is exactly how it sounds. AI can monitor the amount of stock across a warehouse in real time. This allows the amount of stock to be accurately reported down to the minute. 

Trend Analysis

Seeing sales data, market & seasonality trends and other factors through AI inventory management allows decisions to be made quicker. These insights are more accurate, compared to manually identifying trends on a spreadsheet,  and allows changes to be implemented based off trends. 

Automated Reordering

Say goodbye to the days of having to remember to reorder stock manually. AI inventory management can reorder stock automatically when levels reach a threshold. This avoids both overstocking, out stocking, and ensures that you have the products or raw materials for production, when you need them. 

Better Decision Making  

By having your data analysed through AI, data can be extracted and broken down into useful insights making it easier for companies to make better decision making, when it comes to ordering stock, managing inventory levels and product & market trends.

Cost Reduction

Using an AI inventory management system can have a significant impact on costs. By being able to automate processes, analyse trends and track everything in real-time, AI inventory management can reduce costs by only ordering products when needed and ensuring products with closer ‘sell-by-date’ go out first. 

AI has massively changed the way businesses are tackling their inventory management. From demand forecasting to automation, companies can reduce waste, costs and make decisions backed by data. However, AI inventory management doesn’t come without its challenges.  Here’s how Unleashed is different and makes your AI inventory management worry free.

Data Issues

AI relies on data to be accurate. If this data is incorrect, outdated or incomplete, this can lead to AI giving wrong responses. All data needs to be updated regularly. Automation, such as barcode scanners, can keep data up-to-date but it’s recommended you cast an eye over it every so often.

Investment

Implementing AI inventory management can be expensive. If you are looking to implement AI inventory management, you can expect costs such as integration and training alongside the software itself.

Security

Because AI replies so heavily on data to be accurate, the concern about security is incredibly important to avoid sensitive information being leaked outside the company. Some software, including Access Evo in Unleashed, uses a private AI-instance to ensure that all data and responses are never shared outside your organisation.

Staff Turnover

If a company has a high turnover, it can be timely to train new staff on software. If staff are not trained properly, this can cause issues with AI insights if data isn’t entered correctly. With Access Evo in Unleashed, training is made simple. Training can be done digitally for self-serve. Additionally, enhanced support can be purchased, ensuring all staff are trained properly.

In Unleashed, you can use Copilot and Feed to take your inventory management to the next level. 

Copilot, the integrated AI assistant, allows you to access more data and information through a prompt, making it easier to:

• Retrieve customer’s order history
• Identify products that are frequently brought together
• Predict the best reorder timings based on your sales trends
• Suggest the best pricing based on sales data
• Help to write customised emails to suppliers

Feed allows you to keep track of important tasks within your warehouse and will send notification based on real-time data. It will let you know when: 

• Stock is running low and when a product is likely to sell out
• Orders waiting to be dispatched
• Batches that are close to expiring 

And much more. 

Find out more about our AI integration or start a 14-day free trial now.