What is inventory management? Challenges, levers and prospects for optimisation

Inventory management plays a central role in overall supply chain performance. Too often perceived as a simple cost-cutting lever, it is in fact a strategic pillar, at the intersection of logistics flows, customer satisfaction and operational resilience.

In this age of digitalisation and automation, how can we rethink our practices to balance availability, flexibility and profitability?

1. Inventory management: much more than just a cost issue

Traditionally, inventory management aims to avoid two major pitfalls:

• stock shortages, which impair the customer experience and interrupt production,
• overabundance, which unnecessarily mobilises capital and space.

Today, it is also a driver of competitiveness.

In 2024, 79% of supply chain managers identified inventory optimisation as a strategic priority (Gartner).
The ability to adjust levels according to demand volatility, supply uncertainties and production constraints is becoming essential to improving resilience and margins.

2. Forecasting, AI and continuous optimisation: towards intelligent management

Forecasting tools are evolving rapidly thanks to artificial intelligence (AI). Predictive models now incorporate:

• sales history and seasonality,
• promotions and customer behaviour,
• external weak signals (weather, social trends, geopolitical events, etc.).

👉 Result: reduction in safety stocks without increasing the risk of stockouts.
According to McKinsey, AI enables an average reduction of 20 to 50 per cent in stockouts and 10 to 30 per cent in overstocking.

But optimisation does not stop at forecasting.

• Automatic restocking (dynamic stock, smart thresholds),
• workflows no-code,
• real-time traceability: all of these are levers for streamlining logistics and improving the reliability of operations.

3. Structure your stock levels for greater flexibility

Each product type requires a specific approach. Traditional methods (reorder point, minimum stock, economic batch size) remain useful, but must be adapted according to:

• product life cycle (launch, maturity, end),
• rotation frequency (ABC method),
• criticality in the production flow,
• stock location (central, regional, partner).

A modular approach and pooling (logistics platforms, VMI) enable a high level of service to be maintained while reducing inventory levels.

📌 Example: in specialised distribution, some retailers have reduced their in-store stock by 25% thanks to more frequent deliveries backed by a regional automated warehouse.

4. Digitalisation and traceability: the new standards

Digital inventory management platforms are becoming true control hubs, interconnected with:

• ERP, WMS, TMS,
• IoT and sensors,
• Solutions no-code / low-code.

They offer:

• real-time visibility of levels and locations,
• unit traceability (serial number, best-before date, batch numbers),
• proactive alerts on anomalies or critical thresholds.

👉 Traceability is no longer just a regulatory requirement (pharmaceuticals, agriculture, aeronautics): it is a lever for sustainable performance.

5. Towards sustainable and resilient stock management

Inventory management is now part of a strategy of sustainability and resilience:

• reduction in dead stock,
• limitation of obsolescence,
• improvement in turnover rate.

Benefits:

• reduced carbon footprint (less transport, storage space, waste),
• increased resilience to uncertainties (geopolitical, climatic, economic),
• optimised cash flow (reduced working capital requirements).

Some companies even incorporate environmental indicators into their management KPIs.

Conclusion: Managing stock is managing performance

Inventory management is no longer just a tool for reducing costs: it is a strategic lever for enhancing responsiveness, customer satisfaction, and sustainability.

With AI, traceability and workflow digitisation, it is becoming smarter, more agile and more connected than ever before. 👉 Evolving your practices means improving service quality, profitability and sustainable competitiveness.

FAQ – Stock management

Q: What are the main objectives of inventory management? A: To avoid stockouts, limit overstocking, improve customer satisfaction, and optimise cash flow.

Q: How is AI transforming inventory management? A: Through more accurate forecasting, automated replenishment, and better detection of weak signals.

Q: What indicators should be monitored to optimise stock levels? A: Turnover rate, stock-out rate, stock coverage, obsolescence, carbon footprint linked to storage and transport.

Q: Which sectors are most affected by stock traceability?
A: Pharmaceuticals, agri-food, aeronautics and specialised distribution.

📩 Would you like to modernise your inventory management with digital, connected and sustainable tools?
Contact the Monstock team to find out how our solutions can transform your practices and boost your supply chain performance.

Monstock is the stock and flow management solution that supports you in the digitisation and transformation of your warehouses. Simple and intuitive to use, Monstock allows you to analyse your customer order and purchase history to suggest orders accordingly.

For further information, contact the Monstock team.