This content originally appeared on HackerNoon and was authored by BoxHero
\ AI's popularity, sparked initially in part by 'AlphaGo', continues to sweep the industry with the emergence of ChatGPT. This generative AI, recognized for its limitless potential, is gaining popularity across various business domains. Moreover, AI technologies, constantly advancing, are actively being applied in diverse business areas.
\ The recent trend has shown an increase in efforts to enhance efficiency using AI technology. More than 93% of employers and 86% of workers anticipate using GenAI to automate repetitive tasks and improve creativity and innovation within the next five years. As businesses increasingly turn to AI to streamline operations, one critical area where this technology is making a significant impact is inventory management.
\ In this article, we’ll take a look at 5 different ways AI technology can be used to boost efficiency and improve productivity in inventory management.
1. AI Enables Fast and Accurate Demand Forecasting
To maintain optimal inventory levels, businesses predict demand and establish production and supply plans. Traditionally, this involved manually estimating and forecasting approximate demand based on historical data. However, this approach inevitably slows down operations and increases the likelihood of errors. With such rapid growth of e-commerce in recent years, the volume of data has become so vast that human analysis alone is no longer feasible.
\ AI, capable of rapidly analyzing massive amounts of data in real time, facilitates easy demand prediction, enabling smooth development of production and supply plans. For instance, if products experience increased sales during specific periods, AI can automatically analyze past sales data and inventory status to predict, with relatively high accuracy, the periods of surging customer demand. This allows proactive preparation, mitigating stockouts, delivery issues that undermine customer trust, and the costly repercussions of excessive inventory.
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2. Continuous Inventory Monitoring
Real-time inventory visibility is crucial information that businesses must have to improve performance. However, despite recognizing the necessity of regular inventory audits, many fail to fully appreciate the value of real-time inventory. Even those aware of its importance often hesitate to invest significant time and resources into actively monitoring inventory status in real time.
\ AI also enables effortless real-time inventory monitoring with its ability to analyze vast amounts of data around the clock. This allows businesses to promptly respond to sudden demand fluctuations. Many companies leverage AI for monitoring inventory changes, cycle times, lead times, and reorder points in real time, by utilizing chatbots as inventory management managers and customer service partners. Customers can inquire about estimated delivery times and current shipment locations from chatbots, while suppliers can directly obtain information about order statuses for specific products. Internal employees also benefit from chatbots, as they receive immediate responses based on extensive inventory data, thereby enhancing productivity.
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3. Improving the Procurement Process
The procurement process is an essential business phase that manufacturing companies must go through. It involves identifying and contracting with suppliers to procure raw materials, goods, and services necessary for production. To initiate the procurement of raw materials, it is crucial to predict which materials will be depleted and determine the appropriate ordering timing that does not impact production and sales. Additionally, it is essential to accurately assess the timing for equipment replacement to avoid disrupting product manufacturing.
\ Moreover, AI aids in streamlining the procurement process by identifying the required quantities of raw materials, optimal ordering timings, and equipment replacement cycles for product manufacturing. It analyzes expenditure involved in procurement and leverages market data to recommend better suppliers. It’s easy to see the role that AI plays in inventory management by swiftly detecting anomalies and issues in the procurement process, often before humans do.
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4. Scan Inventory Status In Real-Time
Are you aware of the significant loss of sales opportunities from having empty shelves? To improve business performance, it is crucial to manage inventory not only in the warehouse but also on store shelves. Unfortunately, even if store staff regularly manage the shelves, it can often be challenging to replenish items immediately when they are sold.
\ To address this challenge, a new technology is now being developed by Google, to utilize cameras mounted on the ceiling to scan the shelves and identify inventory status using AI algorithms. If shelf restocking is needed, you can quickly receive notifications on your smartphone. By employing AI in this manner, the saved resources and costs can be redirected toward more critical tasks that enhance business performance.
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5. Develop Marketing Strategies
Creating marketing strategies with the help of AI is one way to reduce inventory and increase sales. AI collects not only customer data but also a vast amount of information scattered throughout the sea of data, allowing us to understand which products and services are popular among target customers. This enables us to create marketing strategies that contribute to sales growth without relying on the assistance of marketing experts.
\ AI can also be utilized to refine and optimize target audiences. By obtaining insights into the target audience with a high likelihood of purchasing our products or services, it becomes easier to achieve high conversion rates and marketing ROI (Return on Investment).
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Final Thoughts
Inventory management is undoubtedly a complex area that requires careful attention, and can directly impact business performance.
\ We’re here to let you know that inventory management solutions like BoxHero, combined with AI technology, are driving innovation in inventory management and creating a better business environment. If you're seeking improvements in inventory management, make sure to keep an eye on the constantly evolving AI and user-friendly inventory management solutions. The adoption of suitable technology and solutions is a strategic choice to enhance business performance.
This content originally appeared on HackerNoon and was authored by BoxHero
BoxHero | Sciencx (2024-08-21T16:14:43+00:00) Leveraging AI to Boost Inventory Management Efficiency. Retrieved from https://www.scien.cx/2024/08/21/leveraging-ai-to-boost-inventory-management-efficiency/
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