Sales and Fulfillment
Choosing the right AI-driven inventory management solution for your business
The employment of AI for inventory management is transforming how businesses handle stock, operations, and business decisions. In 2024, about 87% of industrial decision-makers planned to expand their warehouses using AI inventory management software. This highlights the growing demand for improved responsiveness, operational optimisation, and competitiveness in today's fast-evolving market. These systems are gaining popularity for their ability to adapt to shifting market demands and seamlessly integrate with existing infrastructure.
With an array of solutions available, understanding the features and benefits of an AI-powered inventory management system is crucial to choosing the right one for your needs.
Understanding AI-driven inventory management
AI-driven inventory management uses advanced algorithms and machine learning to optimise processes. Unlike traditional systems, AI analyses real-time data for enhanced efficiency. Key features include real-time tracking, accurate demand forecasting, and automated replenishment, reducing human errors. Advanced analytics predict trends, forecast demand, and optimise inventory performance. This implies a reduction in costs associated with excess inventory and stockouts and timely customer fulfilment.
The integration process requires businesses to ensure their data infrastructure can handle large datasets required to train AI models. AI models must also seamlessly integrate with existing systems for automated replenishment based on real-time forecasts. And businesses must continuously monitor and evaluate performance to maintain accuracy and reliability in training.
Key factors to consider when choosing an AI-driven inventory management solution
Choosing the right AI-driven inventory management solution involves understanding your business's unique needs and aligning them with the system's capabilities.
Understand your inventory management needs
Begin by identifying the specific inventory challenges your business faces. These challenges often vary based on the size and type of business:
- Small businesses: Prioritise simplicity and cost-effectiveness, focusing on solutions that avoid complex integrations while ensuring optimal stock levels.
- Large enterprises: Choose robust systems with advanced features such as demand forecasting, multi-location tracking, and advanced analytics to manage complex supply chains and diverse product lines.
- Scalability: Ensure the system can grow with your business, avoiding costly upgrades as operations expand.
- Business type: Tailor solutions to your industry. For example, seasonal retailers may need trend analysis tools, while perishable goods suppliers benefit from expiration date tracking.
Deployment options
Evaluate whether an on-premises or cloud-based solution is more suitable for your business.
- On-premises systems: These provide complete control and administrative access, ideal for businesses prioritising data security and local management.
- Cloud-based solutions: These are popular due to their flexibility, scalability, and ease of access. They support SaaS models, enhance data backup capabilities, and align well with e-commerce-driven operations.
Customisation for industry-specific needs
Select a system that can adapt to your business's unique requirements. For example, seasonal retailers may need tools for trend analysis to anticipate fluctuating demand, while perishable goods suppliers benefit from expiration date tracking to minimise waste. Customisation ensures that the software aligns with your operational goals and enhances efficiency.
Cost considerations
Evaluate the total cost of ownership, including implementation, licensing, and maintenance. Compare these costs against potential savings from reduced holding costs, fewer stockouts, and improved efficiency. Ensure the solution offers a strong return on investment.
Vendor support
Vendor support is essential for ensuring the system adapts to your evolving needs. A provider with proactive assistance and continuous improvements can help maintain the system's efficiency and minimise disruptions over time.
Supplier management
AI-powered tools can analyse supplier performance metrics such as quality, pricing, and delivery times. By leveraging these insights, businesses can select effective partners and build reliable and cost-effective relationships by negotiating better terms.
User-friendliness and training
Ensure that the system is user-friendly and that the vendor provides adequate training resources. A steep learning curve can hinder the effective adoption of the system, so intuitive interfaces and comprehensive training are essential for maximising the benefits of artificial intelligence in business.
Data security and compliance
Given the sensitive nature of inventory and sales data, it's crucial to choose a solution that offers robust data security measures and complies with relevant regulations. This ensures the protection of your business information and maintains customer trust.
Real-life example: Transforming inventory management with AI
A retail giant leveraged AI driven inventory management to overcome inefficiencies, excess stock redundancies, and frequent stockouts. By adopting AI solutions for demand forecasting, they accounted for factors like market trends and promotions, improving prediction accuracy.
Results included a 30% reduction in excess inventory, lower holding costs, minimised waste, and better alignment with sustainability goals. AI in supply chain operations improved with reduced lead times, stronger supplier relationships, and enhanced decision-making. Customers benefited from better product availability and faster delivery, boosting satisfaction.
How can Infosys BPM help with best-in-class inventory management systems?
Infosys BPM delivers tailored solutions to optimise your end-to-end customer value chain. Our AI-first approach, combined with decades of BPM expertise and advanced digital capabilities, helps drive growth, boost productivity, and safeguard against business disruptions. With seamless alignment of sales and supply chain strategies, we enable future-ready, high-performance business operations. Partner with us to transform your sales, commercial, and supply chain operations for lasting success.
