Inventory Visibility Is Crucial for Retailers
Inventory Visibility is crucial for supply chains, retailers, and virtually anyone with some sort of inventory. With thousands of SKUs and various warehouses, staying on top of inventory can seem like a never-ending cycle. According to CSCMP’s 2023 State of Logistics Report, in 2022, the U.S. Business Logistics Cost went up as much as 19.6%, the largest increase to date, of which 52% was due to an increase in inventory carrying costs. With ever increasing costs and shortages of product, resources and time weighing on supply chains and retailers across the globe, it’s no wonder inventory visibility with the aid of artificial intelligence has emerged as a crucial must-have for supply chains to get a handle on what is coming in and going out.
43% of small businesses do not actively monitor their inventory, while 21% claim they have no stock at all, leading to scenarios such as stockouts, overstocking, and more, leading to a poor consumer experience. Without accurate inventory visibility, it’s impossible for retailers, supply chains, and more to stay on top of their ordering and get consumers the products they need, at the right time.
The Role of AI in Inventory Optimization
AI plays a crucial role in enhancing inventory visibility through several mechanisms:
- Demand Forecasting: AI algorithms analyze historical sales data, seasonal trends, weather patterns, economic indicators, and other relevant factors to predict future demand accurately. This helps in maintaining optimal inventory levels to meet anticipated demand without overstocking or understocking.
- Inventory Optimization: AI optimizes inventory levels by continuously analyzing real-time data such as sales velocity, supplier lead times, and production schedules. This ensures that the right amount of stock is available at the right time and location, reducing stockouts and excess inventory costs. Check out 3 ways you can optimize your inventory with ConverSight.
- Supply Chain Management: AI improves supply chain efficiency by predicting potential disruptions, optimizing shipping routes, and managing supplier relationships. This end-to-end visibility helps in reducing lead times, improving delivery reliability, and minimizing carrying costs.
- Real-Time Monitoring: AI-powered sensors and IoT devices monitor inventory levels and conditions in real-time. This data is analyzed by AI algorithms to provide actionable insights, such as identifying slow-moving items, detecting anomalies (like shrinkage or spoilage), and triggering automatic reorder points.
- Predictive Maintenance: For equipment and machinery involved in inventory management (like warehouse robots or conveyor systems), AI predicts maintenance needs based on usage patterns and sensor data. This proactive approach reduces downtime and ensures smooth operations.
- Data Integration and Analytics: AI integrates data from various sources (e.g., ERP systems, POS terminals, CRM systems) to provide a unified view of inventory across different locations and channels. Advanced analytics then derive meaningful insights, such as identifying cross-selling opportunities or optimizing stocking strategies.
- Customer Insights: AI analyzes customer behavior data to forecast trends and preferences, which can influence inventory decisions. For example, anticipating seasonal shifts in product demand based on historical purchasing patterns or social media trends.
Overall, AI enhances inventory visibility by providing accurate forecasts, optimizing stock levels, improving supply chain efficiency, enabling real-time monitoring, and leveraging data-driven insights to make informed decisions. This leads to reduced costs, improved customer satisfaction, and increased operational efficiency for businesses and supply chains in an industry with ever-increasing costs and processes. Overall, this leads to increased cash flow, happier customers, and aligned business operations.
Ready to get started on your path towards full inventory visibility? Request a demo to see how you can benefit instantly from ConverSight’s AI-powered inventory visibility platform.
