Inventory Planning Challenges caused due to Supply Chain Uncertainties

Inventory Planning Challenges caused due to Supply Chain Uncertainties


Every enterprise, large or small, has some inventory. The complexity of maintaining inventory increases as a company grows in size. Managing inventory involves working with many sales channels and physical businesses. The complexity may rise due to trying to upscale operations while still meeting the demands of a sizable customer base. Your company may benefit more from a futuristic inventory planning system because it may help you succeed through timely and automated inventory planning.

Effective inventory planning can lower the extra cost of keeping different products on hand, boost sales and profits, and improve customer happiness, promoting customer loyalty.

Let’s see what information merchants need about the difficulties associated with inventory planning and how AI-powered software might help retailers overcome those difficulties.

Challenges in Inventory Planning

To produce reliable results, inventory planning considers several variables and aspects. Multiple sales channels can make it challenging for organizations to plan their inventories. Things become more complicated since businesses must maintain several inventories and warehouses in various locations for multiple sales channels. Seasonality and varying demands make labor much more difficult.

  1. Multiple Channels/Locations – The distribution of merchandise among many locations is a difficult task. It is challenging to determine which items to stock in which location without a reliable inventory planning system. When inventory is kept in the wrong place, shipping is more expensive, and customers may need to wait a long time to receive their goods. The supply chain’s overall trip durations would increase, and productivity would drop if the picking procedure were flawed.
  2. Limited Visibility – Shipments are delayed and imprecise when you lack the visibility to track the stock in your inventory. Businesses can send orders more rapidly if they can find the location of the inventories in their warehouse.
  3. Data Gaps – A lot of information from various sources is needed for good inventory planning, and compiling this data is challenging. Inventory managers must gather historical sales information and reports, which may be dispersed across several platforms. Planners require sales orders, accounting, suppliers, fulfillment, and point-of-sale information. Data collection takes time, and any mistakes could result in inaccurate estimates that result in understocking, overstocking, or missed sales.
  4. Demand Inconsistency – Because consumer demand is ever-changing, keeping too much inventory on hand can lead to overstocking. At the same time, inadequate storage would prevent businesses from meeting client demands. Utilizing inventory planning software and developing order plans for certain commodities can assist manage changing demand.

Estimations are complex, and thus companies should have the right KPIs to help with inventory planning. Even with analytics tools, some guesswork is still necessary. Further complicating factors include changing demand.

Manual Error – Businesses cannot rely only on technology, and planning inventory requires using an inventory planner. When the person in control is replaced, a lot of information must be given to the new person because they will be unable to make decisions based on the previous planner’s historical data. Additionally, to use the inventory planning system effectively, the staff must have the necessary skills and training. Proper communication between personnel must be guaranteed to maintain a balance between production, procurement, and quality control.

How Can Inventory Planning be Optimized With Artificial Intelligence?

Achieving Greater Productivity using AI Algorithms

AI algorithms can improve workplace productivity. A machine can learn to work independently with machine learning, and AI continuously learns new things and enhances processes, increasing productivity. Artificial intelligence can track cycle times, lead times, temperatures, plan downtime, errors, volumes, and more through intricate algorithms. AI integration allows employees to perform monotonous and repetitive activities no longer.

Dynamic Safety Stock Calculations

Every item in an organization’s inventory has a predetermined quantity, establishing a minimum requirement for completing walk-in sales, online transactions, and other channels. Generalized information is insufficient due to increased consumer demand and multiple sales channels; stock levels should change dynamically to satisfy changing demand. Businesses can avoid situations of overstocking and understocking by using AI to decide what quantities to stock for each unit.

Supplier Management

AI-powered inventory planning solutions can help businesses manage their suppliers and select the ones that offer goods at competitive prices and with short lead times. To meet consumer demand, suppliers must rapidly fill replenishment requests. Knowing which suppliers are trustworthy can help organizations cut costs and improve productivity. 

Accurate Demand Forecasting

As firms produce vast amounts of data, manual demand forecasting can no longer produce accurate results. Artificial intelligence (AI)-based inventory planning systems can identify demand patterns and use this data to produce accurate forecasts and streamline warehouse replenishment procedures. These inventory planning systems also allow you to receive immediate forecasts based on current data. Both internal and external sources, like internet comments, demographics, reviews, weather, etc., are considered. Software powered by artificial intelligence can reduce supply chain failures by 30–40%. This level of accuracy aids in reducing lost sales as a result of problems like shifting consumer demand and inaccurate stock counts.

Impact of Promotion Planning

AI-based inventory planning systems provide insightful data that can help improve marketing tactics, which is crucial for these systems. Machine learning and AI can predict irregular demand changes for specific products, and marketing tactics can be altered to fit the needs of your ideal clients. With AI, you can stay on top of current trends and learn about which goods are losing popularity. Better marketing strategies guided by data-driven decisions can help businesses generate a more significant profit margin.

About Fountain9

Fountain9 helps retail companies effectively plan their inventory to meet customer demand at the appropriate moment. Their AI-powered inventory planning system, Kronoscope, can precisely forecast demand for each SKU item and identify the quantities that should be stocked to fulfill demand successfully. Businesses can meet customer expectations and generate more significant money with the help of this software.


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