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You don’t need a software expert to tell you that generative AI is a big deal. The rate of ChatGTP adoption has been more exponential than nearly any other technology.
Humans like friendly, helpful robots. That’s a fact.
But let’s talk more specifically about the business uses of generative AI.
While this technology has been in the works for decades, it’s just now entering into the industries that power our everyday lives. This includes nearly every touchpoint along the supply chain, especially the warehouses that stock, manage, and transport goods.
Generative AI is particularly useful in demand forecasting and inventory management because it can predict what customers will want in the future, so companies can put plans in place today. Keep reading to learn what generative AI is and explore examples of the potential of it in demand forecasting and inventory management.
What is Generative AI?
When we talk about generative AI, what do we mean? Put simply, this is any type of AI analytics that’s been specially programmed to create new content. This can include:
- Text
- Audio
- Software code
- Images
- Simulations
- Videos
- Chat responses
- Designs
This technology entails training a deep learning model to develop an entirely new product or solution. Already, generative AI is being used across myriad industries to streamline content creation, coding, and more.
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In helping the client get its project back on track, one of our primary focus areas was decreasing their customization needs by improving their processes to align with the system's best practices.
Examples of Generative AI in Demand Forecasting
Many companies are using generative AI in warehouse management to create more accurate demand forecasts. Here are a few of the ways they’re doing so:
1. Analyzing Customer Data and Market Trends
AI tools can help companies analyze their customer data as well as predict market trends. This way, they can make better-informed decisions around inventory management and production planning.
Without generative AI, a company might have to rely on outdated forecasting methods. This is unsustainable as customer insights are always changing, and looking backward can only tell you so much.
Just ask our software expert witnesses:
“Unless a company has the right tools for analyzing data, any conclusions drawn about finances and operations are bound to be faulty.”
– Bill Baumann, Director of Software Expert Witness at Panorama.
2. Inventory Forecast and Control
With generative AI, companies can create forecasts that go beyond traditional models. These reports incorporate a range of intricate details about factors that can affect demand.
The software pulls information from disparate datasets as well as real-time patterns. This helps it understand how demand might change in the future, taking into account factors such as:
- Past, current, and upcoming promotions
- Seasonal fluctuations
- Market trends
- Buyer behavior
- Economic conditions
With these AI analytics and insights, it’s easier for companies to manage their inventory levels. They aren’t just predicting future scenarios based on past performance.
Instead, they can allocate resources more appropriately and anticipate any market changes based on very real actions that may occur down the road. For example, with smart production planning, companies can prevent stockouts or overstocks.
In time, applying generative AI to demand forecasting can improve supply chain visibility and help you create a more cost-effective business model.
How the Top ERP Vendors are Incorporating AI Analytics
If you’re evaluating some of the top ERP systems, you’ve probably found that there are many interesting ways of incorporating AI into existing solutions. In fact, several ERP leaders are using AI to bolster their supply chain management functionality using capabilities like prescriptive analytics.
In terms of what to expect in the future, you’ll likely see many ERP vendors leveraging generative AI to automate increasingly granular aspects of shipping and delivery.
The Future of Demand Forecasting is Intelligent
More and more businesses are starting to see the potential of generative AI, especially in the area of inventory management and demand forecasting.
Is your business thinking about exploring the use of generative AI in demand forecasting? If so, our enterprise software consultants can help you navigate the next steps. Contact us below for a free consultation.
