June 18, 2024
Mike Le

Humans vs. Machines in Inventory Planning: Who is the better inventory planner

In today's tech-driven world, we're faced with a big question: Who's better at inventory planning, humans or machines?

 Humans vs. Machines in Inventory Planning: Who is the better inventory planner

But before getting into that, let's take a moment to marvel and appreciate at how far we have come from the 1st known machine i.e the axe, to now some of the most advanced supercomputers and AI applications. 

There are moments when technology clearly takes the lead for example, Google Maps is often superior when it comes to navigation, but human intuition and experience is something an automated recipe cannot match. Yet, the real magic happens when humans and machines join forces, like in music production, where they create something truly special together.

So in the case of inventory management - who will it be? 

Humans possess unique strengths that set them apart from machines: 

  • Intuition, gut feeling and ability to draw from context: Us humans have great instincts and intuition to anticipate market trends and customer preferences. We’re also much better at identifying hot internet and pop cultural trends that AI simply won’t be trained on fast enough. This allows us to make informed decisions that go beyond mere data analysis.
  • Adaptability to unforeseen circumstances: In a dynamic business environment, humans excel at adapting to unexpected changes, whether it's a sudden shift in consumer demand or a supply chain disruption.
  • Creativity in problem-solving: Finally, we can bring a level of creativity to inventory management, devising innovative solutions to challenges that may not be captured by algorithms alone.

Example of Successful Human-Driven Inventory Planning:

Consider a scenario where a small boutique retailer identifies a growing trend on social media surrounding a particular fashion accessory promoted by a popular celebrity. Drawing on their intuition, the retailer can swiftly adjust their inventory levels to capitalize on the trend, resulting in a surge in sales and heightened customer satisfaction.


  • Repetitive and manual processes: Many businesses still rely on manual inventory management processes, leading to inefficiencies and errors. According to industry statistics, companies lose an estimated 4% of annual revenue due to poor inventory management practices.
  • Bias and lack of analysis: At times, we fall into the trap of relying too heavily on historical data or personal biases, leading to under and overstocking issues. This rinse-and-repeat approach can result in missed opportunities and unnecessary costs.

Similarly machines offer a range of capabilities that can greatly enhance efficiency and accuracy:

  • Data analysis and pattern recognition: Processing large volumes of data and identifying patterns that may elude human planners, enabling them to make data-driven decisions with a high degree of precision.
  • Scalability and efficiency: Automated systems can handle vast amounts of inventory data with ease, ensuring timely updates and adjustments across multiple locations or warehouses.
  • Predictive algorithms for demand forecasting: Advanced algorithms can analyze historical sales data and external factors to forecast future demand with remarkable accuracy, helping businesses optimize their inventory levels and minimize stockouts.

Examples of Successful Machine-Driven Inventory Management:

Consider the case of an e-commerce giant utilizing machine learning algorithms to analyze customer behavior and predict purchasing patterns. By leveraging vast datasets and sophisticated algorithms, the company can optimize inventory placement and fulfillment processes, resulting in faster delivery times and improved customer satisfaction.


  • Glitches and unexpected outcomes: Machine errors/glitches can occasionally occur, leading to unforeseen disruptions leading to discrepancies or delays in fulfillment. 

For instance, in 2019, Amazon experienced a technical glitch during its annual Prime Day event, causing inventory management systems to misallocate stock and delay shipments. Such incidents highlight the importance of human oversight and intervention in mitigating the risks associated with automated inventory management systems.

So, who is the winner? 

Just like creating magic when it comes to music, the true winning scenario in inventory management involves machines leveraging their data processing and forecasting capabilities with humans bringing their experience, current world context and intuition to the decision-making table. Imagine a scenario where AI-powered inventory management solutions analyze vast datasets encompassing factors like lead time, seasonality, and past sales trends. Using its advanced algorithms, the applications generate predictions and recommendations for optimal inventory levels and quantities.

Example of Collaborative Inventory Management:

For a retail chain launching a new product, AI applications can analyze data to suggest stocking levels based on demand, trends and lead time.  Inventory managers, armed with this information can combine it with consumer and industry insights to ultimately decide on inventory allocation.  As statistics reveal, organizations embracing technology-driven solutions experience higher inventory accuracy, reduced forecasting errors, and significant efficiency gains. 

In the end, it's not about humans versus machines, but how this partnership can enable businesses to stay agile and responsive, making smarter decisions that drive success in an increasingly competitive landscape. 

In the ongoing debate between humans and machines, the benefits of leveraging technology in inventory management cannot be overstated:

  • Improved Accuracy: According to a study by the Aberdeen Group, companies using advanced inventory management technology experience an average inventory accuracy of 99%, compared to 82% for those relying on manual methods.
  • Reduced Stockouts: Research by IBM found that organizations implementing advanced inventory optimization solutions can reduce stockouts by up to 80%, ensuring products are available when customers need them.
  • Cost Savings: The National Retail Federation estimates that retailers lose $1.1 trillion globally due to out-of-stock items and overstocked inventory. By implementing technology-driven inventory management solutions, businesses can significantly reduce these losses.
  • Increased Efficiency: A report by McKinsey & Company indicates that automation and digitalization in supply chain management can lead to a 20-30% increase in efficiency, resulting in faster order fulfillment and reduced lead times.
  • Better Demand Forecasting: According to a study by Gartner, companies leveraging advanced analytics and machine learning for demand forecasting can reduce forecasting errors by 50% or more, leading to more accurate inventory planning and reduced excess inventory.

These statistics underscore the tangible benefits of incorporating technology into inventory management processes, highlighting its role in improving accuracy, reducing costs, enhancing efficiency, and enabling better decision-making.

In the race to optimize inventory management, it's not about choosing between humans or machines—it's about harnessing their collective strengths. 

Take the next step towards smarter inventory management today. Try out Conative and experience the power of human-machine partnership firsthand. Your inventory management team will thank you.

Ready to revolutionize your inventory management? Try Conative today and unlock the potential of human-machine collaboration!"

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