The use of artificial intelligence (AI) in inventory management can help remove the inefficiencies in the current processes by enabling a predictive approach and reducing errors by automating operations.
The current inventory management practices are laced with challenges and inefficiencies. Inventory management is mostly done manually, and thus takes a lot of time. Similarly, there is a high chance of error that can impact business operations. This can lead to customer complaints due to the gap between demand and supply which is usually caused by incorrect information input. As a result, deliveries to customers are delayed, which can lead to businesses losing out on customers and facing reputational losses. The use of AI for inventory management is aimed at making the process more efficient than the manual one. It not only can help retain customers but also draw in a high number of new ones due to improved efficiency, accuracy, and productivity. Here’s how AI for inventory management can help.
How AI for Inventory Management is Impacting Businesses
Using AI for inventory management can help reduce errors, demand-supply gap, and customer complaints. Here are three major aspects in which AI can prove helpful in inventory management:
Improving Monitoring Procedures
AI robots can be a powerful asset in warehouses. They can be employed to sort, move, and arrange items in the inventory. The robots can be equipped with other advanced technologies such as smart sensors and computer vision to identify the shortest path, detect obstacles and label items with the highest accuracy. Thus, the chances of errors are significantly reduced with the help of AI robots. These robots can be deployed for completely automated systems or as cobots in a semi-autonomous infrastructure. No matter the implementation model, AI robots can guarantee higher productivity and reduced errors, thus, improving monitoring procedures to a great extent.
Reducing the Demand-Supply Gap
AI and data analytics can be used together to accurately predict the demand for products. It ensures that the inventory is always stocked at the optimal level and chances of it being understocked or overstocked are reduced. For instance, data regarding the demand for seasonal products for the last few years can be analyzed using data analytics tools. Artificial intelligence algorithms can help predict the demand for products in the upcoming season with higher accuracy. Thus, products can be stocked based on the results provided by the AI algorithms.
Streamlining Logistics Chains
Since AI helps to balance demand and supply, products can be delivered faster to customers. The entire supply chain benefits from using AI in inventory management. The products are always in stock due to accurate predictions with AI. Hence, the products can be located, packed, and dispatched at the earliest with the help of AI robots. AI can also be used in logistics such as in autonomous vehicles for delivery and carrying out backend repetitive tasks such as data entry with RPA tools. Thus, AI has the capability to provide an end-to-end automation solution, especially for e-commerce players.
It is clear that the use of AI for inventory management can hugely benefit businesses. However, its use should not be restricted to inventory management. Businesses should look for ways to incorporate AI in other related processes such as logistics, as well. If possible, artificial intelligence should be implemented to provide an end-to-end solution for entire business operations.