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Can AI tackle the headache of inventory management?

30 June 2022

The ongoing issues with global supply chains have forced businesses to reconsider their supply chain strategies to help better plan their inventories, says Jean-Baptiste Clouard.

EVERY YEAR, billions of pounds are lost as a result of shortages or overstocks at the manufacturing and distribution stage, making inventory mismanagement a huge problem for businesses. 

Demand forecasts are the perfect foundation for decisions along the supply chain, and it’s important for these to take into account volatility and potential disruptions. The increased use of AI in the supply chain can help save time and money, as it can automate a lot of the processes allowing companies to say goodbye to tedious forecast modelling. 

Using more AI software can help predict consumption demands to provide minimum and maximum recommendations on replenishments and can provide alerts when there is danger of over or understocking. 

Instead of setting solid parameters that the supply chain operates within, the software treats outside influences that could affect the supply chain as variable and continues to automatically and dynamically re-evaluate them. This allows businesses to have a full and accurate picture of current stock levels, mitigating volatility and making it easier to quickly identify and react to stock issues. 

Using AI-based supply chain software, such as one provided by Flowlity, allows businesses to automate their planning and demand forecasting. 

Built-in demand-sensing algorithms can also significantly improve forecast accuracy, making it easier to manage forecasts for consumption demand. This is not only useful in forecasting demand - it also allows businesses to forecast supplier reliability and their capability to deliver goods on time. 

Tracking orders

The use of AI can automate and coordinate customer orders, schedule deliveries, send invoices and even receive payments. It can also be used to send replenishment alerts to suppliers, for example if a promotional item is selling well and stock is being used faster than anticipated. 

The current supply chain is based on suppliers and manufacturers acting independently, but by connecting all stages of the supply chain and with data being stored in a centralised system, all parties have visibility on what is happening from end-to-end. 

The more digital the world becomes, the more speed and accuracy become important to the consumer – AI-based software streamlines the supply chain and reduces the capacity for error, increasing efficiency at every stage.

Because information and data are stored in a centralised system, it eliminates the need to provide regular updates to stakeholders and users at each stage are automatically interconnected and have visibility on any potential issues.  

Where workers were once needed to carry out repetitive processes and manual data entry, AI can be used to automate processes which frees up time and resources and reduces the potential for human error in inventory management. 

Resilience

Supply chain resilience is at the forefront of the conversation surrounding global supply chain issues, and more businesses are looking to digitisation to optimise their supply chains. 

Implementing digital supply chain software not only saves businesses time and money, but also encourages an interconnected approach across the supply chain and allows each company at every stage access to the same information. 

This is vital in a time where supply chains are becoming less localised and businesses are competing to keep up with supply chain demands. 

Digital supply chains are not the future – they are needed now. 

Jean-Baptiste Clouard, co-founder and CEO, Flowlity

For more information, visit flowlity.com

 
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