How AI-Driven Inventory Management ensures the right inventory in right time.

Why do you need to manage your inventory?

Planning your inventory effectively ensures that your products are available or are in stock whenever customers demand them. Forecasting how much your customers demand not only ensures you have sufficient stock but it guarantees to produce at an optimal level that would prevent overstocking. This leads to better utilization of resources which ensures efficient production. Holding excess inventory would incur storage costs, handling, and insurance costs which would be minimized by inventory planning. While an efficient inventory system would guarantee quicker order fulfillment, satisfy customer demands, and ensure your brand has the ability to capitalize on market opportunities placing you at a competitive advantage.

What is inventory management?

What is inventory management

Simply put, inventory management is the process of tracking and managing stocks and inventory. It determines the optimal levels of inventory that a business should maintain to meet the demand of its customers. This includes storing products, managing orders, and adjusting the number of products for sale. It guarantees you have the right quantity of stock when you really need it. It is crucial in maintaining a balance between customer demand and product supply. Knowing when to restock is important in ensuring you don’t lose out on a sale.

Efficient inventory planning and management methods are essential for businesses to strike the perfect balance between meeting customer demand and maintaining optimal stock levels. Depending on the business or product, a company can use different inventory management methods:

      • JIT (Just in time)

        JIT(Just in time) - an approach to optimize your inventory management.This model allows companies to save significant amounts of money and reduces waste by only keeping inventory that is actually demanded. Although it minimizes wastage of resources, there are some risks. Supposedly if the demand unexpectedly spikes, the manufacturer may not be able to meet the demanded level of production. Even deliveries can be problematic which could result in bottlenecks. Toyota has implemented this model whereby their cars are produced only if the customer order is actually received.

      • MRP (Material requirement planning)

        MRP(Material requirement planning) - an approach to optimize your inventory management.

        This model is sales forecast dependent. The forecast will give one an estimate of how many product materials are required to ensure the right materials are available in a timely manner. This is most beneficial to manufacturing companies that require multiple parts to create a product.

      • EOQ (Economic order quantity)

        EOQ (Economic order quantity) - an approach to optimize your inventory management.

        This model is implemented in inventory management while assuming constant current consumer demand. It is a mathematical formula that represents the ideal size to order, factoring all costs related to delivery and purchases whilst also factoring in demand. McDonald’s corporation utilizes this model to determine an optimum quantity for delivering the brand’s food.

      • DSI (Days Sales of Inventory)

        DSI (Days Sales of Inventory)-  an approach to optimize your inventory management.As the name suggests, this metric calculates the number of days it takes for an inventory to be sold off. Through this, we can learn how quickly inventories move or turnover. Generally, a lower DSI indicates a shorter duration to clear off the inventory. This model is popular among retail companies or businesses in general who dabble in physical products.

Case study: Statistics show that Inventory management is the second largest field in which AI is implemented.

Statistics showing how Inventory management is the second largest field in which AI is implemented.
Source: AI Multiple – “Manufacturing AI: Applications, Use Cases & Examples”

Coca-Cola’s AI-driven approach to optimize its Inventory Management :

    Coca-Cola has implemented artificial intelligence to optimize its inventory management system for cabinet coolers in retail outlets. 

    Through AI technology, the company has developed sophisticated methods of identifying, and accurately counting different Coca-Cola products housed within the coolers by using Salesforce’s AI model ‘Einstein’. 

    Moreover, this AI system provides retailers with valuable insights into predicted demand for individual coolers, fostering not only customer satisfaction but also contributing to a significant boost in Coca-Cola’s sales. 

    Coca-Cola’s AI-driven approach enhances inventory accuracy and efficiency but also empowers retailers to make data-driven decisions, solidifying the brand’s position in the industry as a leader. 

    To read this case study in detail, visit the case study of how Coca-Cola did efficient inventory management using artificial intelligence

    Have you wondered what pricing strategies Coca-Cola employs to ensure its competitive industry standing in the market? It’s called the ‘decoy effect’. To delve deeper into what exactly that is, check out our blog on how the decoy effect influences customers’ choices through pricing.
    However, in the avenue of supply management, AI’s predictive analysis can manage your inventory in the best way possible. 

By analyzing historical sales data and market trends, the AI system can accurately forecast future demand for products. This allows businesses to plan and optimize their inventory levels. This in turn helps reduce carrying costs and minimize the risk of holding excess inventory (gluts) or avoiding going out of stock.

The AI system also continuously monitors inventory levels and sends real-time alerts to businesses when products are running low or out of stock. This enables businesses to replenish their inventory and at the same time prevent potential revenue loss due to unavailability. 

In addition, it is also crucial to monitor your competition to get a better picture of what their inventory is. This can be achieved through AI’s competitive analysis where your competition’s data is thoroughly analyzed to generate an accurate forecast of the market.

To know more about this see how vital competitive pricing is in determining your brand’s standing which influences customer perception, loyalty, and overall market success.

Therefore to build a strong and enduring brand, a well-optimized inventory management system is not just important, but essential. However, this is just one brick in the mortar for brand success. To know what the others are read about:

Book a free demo of our automated retail solutions or contact our optimization experts at

To know more about our AI-powered dynamic pricing tool BRIO, reach out to us.

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