ABSTRACT
Organizations are confronted by massive quantities of data that multiply by the minute, across every function that affects inventory management – planning, procurement, production, distribution, and fulfillment. Contracting with channel partners for some of those processes complicates the challenge. Leaders are seizing the opportunity offered through what’s called ‘cognitive inventory management’, referring to the ‘thinking’ capacity of AI to understand the multitude of real-time dynamics that affect inventory levels. Cognitive inventory management is distinguished from traditional tools in its ability to predict scenarios, recommend actions, and take actions, either with human approval or autonomously. Savings can amount to hundreds of millions of dollars as CPG companies avoid tying up working capital, and the high costs of excess inventory consuming valuable warehouse space. CPG companies can also fine-tune production to demand and improve service levels, driving the newfound cost efficiency across the organization.
