Do you leverage technology for improved efficiency?

Technology has had a significant impact on businesses in all sectors, giving hope to the actualization of an efficient workplace at reduced costs. The increasing importance can be quantified by the surge in SaaS adoption.

In fact, a report by Productiv indicated that organizations worldwide used 371 Software as a Service applications on average in 2024, emphasizing further the growing importance of technology.

However, AI is the new kid on the block and is truly ruling.

It has become integral to automation, helping businesses get tasks done faster and efficiently in multiple key areas of their businesses without human intervention.

Inventory management is one area benefiting from this technology. Working with an efficient inventory system has become a necessity to ensure accurate stock taking to avoid errors and inefficiencies like delays.

In this article, we will discuss the use of AI in inventory management to help you understand how it can transform your business. Let’s get started.

Customer demands keep fluctuating.

This is due to the influence of several factors, including market trends and seasonality. Consequently, it is becoming more challenging for businesses to keep up with complex customer patterns that are hard to predict.

Danone Group is a key player in the food industry dealing primarily with early life nutrition, medical nutrition, water, and plant based products. The company is based in France and, with their unique health-focused catalog of products, is revolutionizing the food sector.

Now Danone Group was faced with demand volatility and forecast change.

For them, it was more critical to achieve accurate predictions because of the nature of their short shelf-life of fresh products.

Their predictive analysis seemed to be working against them, delivering inaccurate forecasts. In fact, the numerous forecast errors translated to lost sales, which affected their business.

Additionally, most of their sales (over 30%) were made through promotional offers which added to the challenge of predicting demand

As a solution to this problem, the company integrated machine learning into their systems to accurately model demand. Leveraging this technology, Danone Group was able to have clear demand visibility and enhance forecast quality which were very essential for reliable supply chain planning.

However, this wasn't all AI was able to achieve. Additionally, the company was able to improve planning between different key departments ensuring cohesive operations. This system enhanced inventory balance, allowing Danone to meet its target service levels for store-level inventories.

Other achievements included a 20% reduction in forecast error, increasing forecast accuracy to 92%, and reducing lost sales by 30%.

Automation has been very transformative.

And so have automated reordering systems in enhancing how businesses handle their stock.

The use of AI in inventory management is truly multifold, and for a holistic approach, businesses need to integrate their forecasting systems and inventory tools with an efficient automated reordering system.

AB InBev is one of the world’s largest manufacturers and distributors of beer. This means they have huge operations running to ensure a streamlined supply chain. The company’s Leuven laboratory was, however, facing a huge challenge when it came to inventory.

With many moving parts, it was getting difficult to focus on the important things, as stock monitoring and reordering had to be done manually. This was not only time consuming but also affected productivity.

There was already a system in place that printed barcodes on chemical resistant labels. While this was a great starting point, there was a need for a holistic approach to their automated supply chain.

In an effort to solve its challenge, AB InBev invested in Safetrak software and Honeywell Xenox Scanner as advised by Brady, that enabled efficient reordering.

The system integrated could alert lab professionals and purchasers on chemical stock levels and expiry dates.

This allowed the company to achieve efficient stock levels and significantly reduce non-core activities, allowing employees to focus on tasks that mattered.

Safetrak is a highly customizable solution that integrated well with other AB InBev software to ensure a streamlined flow of information from storage locations to order references.

Additionally, the staff receives automatic notifications whenever stock levels of specific chemicals go down or if the items are about to expire. Consequently, this could trigger the system to notify relevant stakeholders to facilitate the reordering process.

Proper inventory tracking is essential.

It empowers business owners to predict customer demands and make better decisions that facilitate growth and efficiency.

While it sounds like an easy process, inventory management requires meticulous planning and monitoring to ensure everything runs correctly.

One distribution company in the warehouse and logistics industry was having a challenge with its inventory management and their traditional and manual methods were not up to task.

Often, they experienced inefficiencies such as overstocks and stockouts, which not only affected the business but also negatively impacted on customer satisfaction.

This pushed the distribution company to seek better inventory tracking systems. And that is when they decided to invest in Play Tech Group’s AI powered inventory management solution.

The goal was to have accurate information on inventory levels, but the software benefits transcended this.

It was able to automate restocking processes, predict stock needs, and analyze data thanks to machine learning.

The AI system was integrated with existing solutions, such as the company’s warehouse management software to facilitate exchange of data and cohesive operations. Leveraging machine learning, it was able to learn market trends and historical inventory data, and sales records.

Now the client is able to track inventory in real time and get reports on them to empower decision making.

In addition to that, the company realized reduced stockouts and decreased overstocks. As a result, it was also able to reduce storage costs due to efficient inventory management.

Other than inventory stocking benefits, the AI system improved forecast accuracy, enabling the client to anticipate demand fluctuations.

Thanks to the predictions, the system also creates automatic restocking orders.

Want to start a warehouse business?

We can both agree that it is among the most intensive businesses, requiring meticulous planning and coordination for things to run smoothly. Even with a well thought-out warehouse idea, it is essential to optimize the layout.

It not only ensures proper space utilization but also promotes streamlined processes from start to finish.

Among the uses of AI in inventory management is developing simulation models that analyze warehouse design to suggest layout improvements.

With other parts of the business running correctly, you are more likely to achieve efficiency and accuracy in inventory management. For instance, you can ensure storage optimization.

To understand the role of AI in space optimization, it is imperative that we start from inventory tracking.

Machine learning enables you to collect and analyze data that provides insights into fast going products and inventory levels.

With this information, it is possible to effectively organize your warehouse. For instance, items that move fast should be stored at easily accessible areas of the warehouse to reduce movement. This ultimately, leads to smooth and efficient operations.

An automotive manufacturing company was looking to optimize space to increase efficiency and boost operational speed. As a solution, they implemented AI tools that leveraged machine learning and IoT sensors.

The factory monitored inventory levels, machinery usage, and worker movement to better understand space utilization. The AI system simplified all this and provided layout recommendations that could improve processes.

As a result, the automotive plant achieved a space efficiency ratio improvement of 22% and increased production efficiency by 18%.

How can AI improve supply chain processes?

Investing in AI can transform different aspects of your business to deliver entirely streamlined workflows, from automation and customer support to inventory visibility.

When it comes to inventory management, the use of AI is not only limited to ensuring inventory levels are as required. The technology can also collect and provide hidden insights that can help you plan better for the future.

CEAT is a leading tyre manufacturer and distributor with its headquarters in India. They were experiencing challenges gathering insights into their supply chain operations, which made inventory monitoring and demand forecasts difficult.

The company’s huge staff was basically shooting in the dark, trying to connect the dots between disjointed departments including warehouse management and production.

The problem, it seemed, stemmed from poor data management. CEAT did not fully leverage their business data to gain clear visibility into their processes.

The company was pushed to seek a solution that integrated their systems for streamlined information flow and to surface important insights that would drive decision making.

Enters ConverSight, a decision intelligence platform that leverages the power of AI.

The software provided its client with a 360-degree view of its supply chain operations. It not only delivered valuable insights that improved decision making, but also democratized and cut down on siloed information.

This also ensures effective collaborations as all teams can quickly review information and insights, and share with distributors. With everyone in the loop about the operations and having a clear view of the supply chain, it is easy to coordinate operations.

In addition, ConverSight collected and analyzed data for improved inventory management and analysis. Now, CEAT can anticipate when restocking is required ensuring that there is enough inventory to satisfy consumers' needs.

Efficiency is imperative for any business.

Whether you are in the warehouse or SaaS industry, achieving higher efficiency without compromising on quality should be a priority.

It not only builds customer loyalty but also gives you a competitive edge in a dynamic and competitive business landscape.

AI is playing a huge role in helping businesses transform their inventory management practices from giving visibility into stock levels to eliminating time consuming tasks.

In all the listed case studies, businesses that integrated AI into their systems improved their productivity and boosted the efficiency of their day to day processes.

Additionally, AI enabled them to reduce costs while maintaining quality standards.

System interconnectedness is also a common success factor in the adoption of AI. It is imperative for you to ensure that your AI tools work well with other existing solutions to achieve synergy and a holistic approach to growth.

If you are trying to leverage the uses of AI in inventory management, it is critical that first you identify your goals and objectives.

What do you want to achieve?

It could be automation or intelligent demand forecasting, and these will determine the type of AI best suited for you. For instance, predictive AI is ideal for making better demand forecasts.

Also, keep in mind that modifying and training the AI will vary in time and resources depending on the results you want to achieve.

Why is this even important?

Well, every business is different and training your AI on your specific data will enable it to understand and cater to your unique needs.

Do you see how AI can help your business?

AI has made it easy to stay on top of your inventory game, enabling you to have an accurate view of stock levels and make better decisions.

In fact, Grand View Research projects that the global AI market will reach $1.81 trillion by 2030, indicating increased adoption of the technology.

While this is a great way to leverage the use of AI for inventory management, technological advancement has made it possible to improve nearly all aspects of your business.

Starting from marketing to customer support, tasks that need hours to be completed can be done within minutes and without human intervention.

However, embarking on the digital transformation journey can be daunting. But with the right guide, you will be up and running within no time.

For instance, I recommend working with a true growth partner for startups to facilitate your digital transition and help improve your inventory management software marketing efforts.

The results?

An efficient workplace with boosted speed and increased accuracy.