Improving Inventory with AI-Powered Supply and Demand Planning

The supply chain has seen quite a few disruptions in recent years, many of which have overlapped. Businesses are facing unprecedented challenges, ranging from labor shortages and inflation to geopolitical turmoil.

Technology for supply and demand planning, or SDP, is more crucial than ever for businesses of all sizes and in all sectors. Artificial intelligence (AI)-powered SDP solutions help businesses plan inventory and make smarter purchasing decisions by leveraging historical data spanning several years. AI also assists businesses in comprehending "dead stock" by detecting unsold products to ensure they aren't reordered.  

A solution like VAI SDP for example automatically reviews past usage trends and leverages advanced formulas powered by AI to predict future requirements. Forecasts can be specifically adjusted by businesses to enable buyers to respond swiftly to opportunities and/or supply or demand problems throughout the supply chain. This helps ensure that buyers are never left scurrying to meet performance targets or rushing to meet customer demand when disruptions do occur.

Which are the main advantages of using AI-powered SDP?

Sales and Inventory Forecasting: Using historical data, the system evaluates and projects the expected levels of product demand so that resources are allocated appropriately, and inventory is managed.

Purchasing Management: By utilizing automated purchasing systems, businesses can access sophisticated algorithms that forecast future needs to boost sales, cut inventory, and improve responsiveness to fluctuations.

Comprehending Dead Stock: Examining historical patterns and usage over an extended period enables businesses to recognize non-selling products, avoid unnecessary restocking, and conserve time and resources. 

Filling Containers: To optimize storage and create more profitable supply chains, be aware of the dimensions of products, pallets, boxes, and crates.

Providing Flexibility: To reduce pain points when disruptions do happen, identify secondary and tertiary vendors.

Which industrial sectors and business sizes gain the most from an AI-powered SDP tool?

Although SDP is beneficial to companies across all sectors, certain industries gain more from this technology than others. For instance, knowledge of shelf life and spoiling is crucial in the food industry and may reduce waste from interruptions.

Having smart planning tools to reduce pain points is always beneficial. Think about the pharmaceutical sector, where goods must meet stringent guidelines and be utilized or sold by a specific date. Regardless of their size, businesses must schedule their activities around these deadlines.

What type of return on investment can I expect?

We have personally witnessed the advantages that come with putting effective SDP into practice. According to our customers, VAI SDP has improved inventory rotations by over 33% and decreased overstock inventory costs by over 25%.

What are the data requirements?

More historical data is preferable. While every organization has different requirements, information spanning at least two to three years is essential for shaping future patterns. To maximize SDP, however, organizations also require the correct data, and VAI assists corporations in moving their data from antiquated systems to S2K, positioning them for success.

How much time does it take to train staff and put a system into place?

How much data is moved from the old system to an SDP like VAI S2K will determine how it is implemented. To help customers get the most out of the system during implementation, VAI offers several days of training. Additionally, VAI has a team dedicated to assisting with the integration and ramp-up process.

Optimizing demand planning leads to increased profitability. For this reason, it's crucial to make sure your company has the appropriate AI-powered demand planning software.

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