Planning for the unpredictable

How AI-driven inventory planning can help businesses manage demand fluctuations without falling into the trap of overstocking or stockouts.

In retail and supply chain operations, demand rarely follows a straight line. Shifts in consumer preferences, weather disruptions, and global market events can quickly alter buying patterns. Layer in promotions, marketing activity, and seasonal trends, and forecasting becomes a challenging, data-driven exercise.

“Demand fluctuations often stem from a mix of external factors like changing consumer preferences, economic uncertainty, and unpredictable weather patterns,” explains Mike Taylor, Director – Solution Strategy, APAC at RELEX Solutions. “Global events such as pandemics or geopolitical shifts can also introduce sudden volatility that businesses need to be ready for.”

While some fluctuations can be predicted, others arrive with little warning. Retailers and supply chain operators face an ongoing challenge: anticipate shifts early enough to adapt inventory plans before costs escalate or customer satisfaction drops.

The risks of getting it wrong

When fluctuations aren’t well-managed, the consequences are immediate and costly. Overstocking ties up working capital, creates storage challenges, and can lead to product waste – particularly for perishables. On the other hand, stockouts erode trust and can drive customers toward competitors.

Mike notes that these issues extend beyond just the warehouse floor. How AI-driven inventory planning can help businesses manage demand fluctuations without falling into the trap of overstocking or stockouts.

“Poorly managed fluctuations can disrupt transport scheduling, create bottlenecks in fulfilment centres, and undermine the accuracy of inventory data across the business. It’s not just about having too much or too little – it’s about the operational strain those imbalances create.”

Technology’s role in levelling the playing field

For many businesses, traditional forecasting methods and spreadsheets are no longer enough. The pace and complexity of change demand more sophisticated, responsive tools. RELEX Solutions addresses this with advanced forecasting algorithms designed to account for a wide range of inputs – from historical sales data and promotional calendars to weather forecasts and local events.

By continuously analysing and adjusting forecasts, the platform helps operators align stock levels with actual market conditions.

“Our demand forecasting engine is built to handle both the predictable and the unexpected,” Mike says. “For seasonal goods, we use advanced models to anticipate recurring peaks. For slow-moving items, we pool data across similar products or locations to identify patterns that might otherwise be invisible.”

One of the key advantages of RELEX’s approach is its ability to separate recurring seasonal patterns from anomalies. The system can detect demand spikes tied to promotions or weather events while recognising more permanent shifts, such as a product gaining new popularity.

“This distinction is vital,” Mike explains. “It means businesses don’t overreact to short-term blips or miss the signs of a longer-term change in demand.”

External data – like event schedules or marketing campaigns – is layered into the analysis, ensuring forecasts aren’t reactive but take into account known factors that will influence customer behaviour.

Automation for near real-time response

While accurate forecasting is essential, the real test comes in how quickly a business can respond. RELEX places automation at the centre of that process. Its AI-driven algorithms continually monitor demand patterns and adjust replenishment plans without requiring manual intervention. Features like automated order proposals, dynamic safety stock calculations, and real-time integration with sales and inventory data mean that decisions can be implemented almost instantly.

“Automation is what enables agility at scale,” Mike says. “You can have the best forecast in the world, but if it takes two weeks to adjust your stock levels, you’ve already missed the opportunity.”

Balancing overstock and stockout risk

The tension between holding too much inventory and not having enough is one of the most persistent challenges in supply chain management. RELEX tackles this by dynamically recalculating safety stock levels daily, factoring in demand variability, lead times, and forecast accuracy.

“The system ensures there’s enough buffer stock to avoid stockouts without tying up unnecessary capital,” Mike says. “It’s about precision – reducing waste while maintaining high product availability.”

Although demand fluctuation is most visible in fast-moving consumer goods and grocery retail, RELEX’s platform is designed to adapt to a wide variety of sectors. This includes DIY retail, fashion, and even manufacturing environments with longer lead times.

“Every industry has its own patterns and challenges,” Mike notes. “The flexibility of our platform means it can be configured for the unique requirements of each business, whether that’s managing fresh produce or coordinating complex production schedules.”

Inventory planning doesn’t happen in isolation. RELEX includes collaboration tools such as real-time dashboards, automated alerts, and scenario simulations to support cross-functional decision-making.

“In-context commenting lets teams leave notes tied directly to specific data points,” Mike says. “It means planners, buyers, and store managers can communicate clearly without endless email threads. Task assignments and review workflows also help keep everyone aligned and accountable.”

Scenario simulations allow teams to test strategies before rolling them out, providing a clearer picture of how changes in one part of the supply chain might affect the rest.

Integration without disruption

For many businesses, the question isn’t just whether a platform works – it’s whether it can be deployed without upending existing systems. RELEX is built to integrate with ERP and WMS platforms via standard interfaces, ensuring smooth data flow.

“Most of our customers run RELEX alongside their existing core systems,” Mike says. “That’s how we deliver value quickly without forcing a major IT overhaul.”

While implementation timelines vary by business size and complexity, RELEX’s configurable design means operators can start seeing benefits within weeks. The company provides best-practice templates and hands-on guidance throughout onboarding.

“Once the system is live, it begins delivering actionable insights almost immediately,” Mike notes.

Demand isn’t the only moving target. Delayed shipments, production disruptions, or supplier issues can also throw inventory plans off balance. RELEX incorporates supply-side data – including lead times and supplier reliability – into its models, adjusting plans when disruptions occur.

“This might mean reallocating stock across stores or prioritising high-demand lines until supply is restored,” Mike says. “The goal is to maintain resilience, not just react when it’s too late.”

The AI-driven future

Looking ahead, Mike sees AI reshaping the entire field of inventory planning. Beyond predictive analytics, emerging SUPPLY CHAINS Planning for the unpredictable capabilities in generative AI will enable tailored demand scenarios and insights from unstructured data sources such as customer reviews. Agentic AI could take automation further, enabling systems to execute complex workflows with minimal human input.

“AI is already transforming inventory planning,” Mike says. “Our role is to make sure those capabilities are applied in a way that delivers measurable value – not just novelty.”

For supply chain leaders still relying on manual methods, Mike’s advice is direct.

“Spreadsheets and siloed systems simply can’t keep up with the complexity of modern supply chains. Investing in an integrated, AI-driven platform allows you to automate processes, improve accuracy, and respond to demand changes in real time.”

As demand fluctuations become more frequent and more disruptive, the ability to plan with precision and act with speed will separate the leaders from the laggards. For businesses prepared to embrace intelligent, automated inventory planning, volatility doesn’t have to be a threat – it can be an opportunity.