How Retailers Are Using Business Central and Copilot to Streamline Inventory

In the dynamic world of retail, inventory management is both an art and a science. It’s the delicate balance between meeting customer demand and minimizing excess stock. For retailers, the stakes are high—mismanaged inventory can lead to lost sales, increased holding costs, and diminished customer satisfaction. Fortunately, Microsoft is reshaping how retailers approach this challenge. Microsoft Dynamics 365 Business Central, enhanced by Copilot, is emerging as a powerful solution to streamline inventory operations, reduce manual effort, and drive smarter decisions.

Understanding the Tools: Business Central + Copilot

Microsoft Dynamics 365 Business Central is a comprehensive cloud-based ERP solution tailored for small and medium-sized businesses. It integrates finance, operations, sales, and inventory into a unified platform, enabling retailers to manage their entire business from one place.

Copilot, Microsoft’s AI-powered assistant, is embedded within Business Central to enhance user productivity. It uses generative AI and natural language processing to help users interact with data, automate tasks, and gain insights—all through intuitive, conversational prompts.

Together, these tools offer retailers a smarter, faster, and more agile way to manage inventory.

Inventory Challenges in Retail

Before diving into solutions, it’s important to understand the common inventory pain points retailers face:

• Demand volatility: Seasonal trends, promotions, and external factors can cause unpredictable shifts in demand.
• Stockouts and overstock: Running out of popular items leads to missed sales, while excess inventory ties up capital and storage.
• Manual processes: Many retailers still rely on spreadsheets or disconnected systems, leading to errors and inefficiencies.
• Lack of visibility: Without real-time data, retailers struggle to make informed decisions about stock levels, replenishment, and supplier performance.

Business Central and Copilot directly address these challenges with intelligent automation and data-driven insights.

How Retailers Are Streamlining Inventory with Business Central and Copilot

1. Automated Replenishment Planning

Retailers often spend hours manually calculating reorder points and safety stock levels. Business Central automates this process by analyzing historical sales data, lead times, and demand patterns. Copilot enhances this by offering predictive suggestions:

“Based on recent trends, you may want to reorder SKU A earlier this month to avoid stockouts.”

Retailers can configure replenishment rules, set minimum and maximum stock thresholds, and let the system generate purchase orders automatically—saving time and reducing human error.

2. AI-Powered Demand Forecasting

Copilot uses machine learning to forecast future demand with impressive accuracy. It considers seasonality, promotions, and external factors to predict sales volumes for each product.

For example, a fashion retailer preparing for the holiday season can ask:

“What is the expected demand for winter jackets in November?”

Copilot responds with a forecast based on historical data and current trends, helping the retailer plan inventory levels accordingly.

3. Real-Time Inventory Visibility

Business Central provides a centralized view of inventory across locations—warehouses, stores, and online channels. Retailers can track stock levels, movements, and availability in real time.

Copilot adds conversational access:

“Show me all items with less than 10 units in stock.”

This empowers store managers and inventory planners to act quickly, whether it’s transferring stock between locations or initiating replenishment.

4. Intelligent Alerts and Recommendations

Copilot proactively alerts users to potential issues:

• Low stock warnings
• Expiring products
• Slow-moving inventory
• Supplier delays

It also recommends actions:

“SKU B has been sitting in inventory for 90 days. Consider running a promotion or bundling it with a fast-moving item.”

These insights help retailers optimize inventory turnover and reduce waste.

5. Streamlined Supplier Management

Managing suppliers is critical to inventory efficiency. Business Central tracks supplier performance—delivery times, order accuracy, and pricing.

Copilot can summarize supplier reliability:

“Vendor X has a 95% on-time delivery rate but higher costs. Vendor Y is cheaper but less reliable.”

Retailers use this data to negotiate better terms, diversify suppliers, or adjust lead times to ensure consistent stock availability.

6. Integrated Sales and Inventory Insights

Retailers often struggle to connect sales performance with inventory decisions. Business Central bridges this gap by linking POS data, online orders, and inventory levels.

Copilot helps answer strategic questions:

“Which products are selling fastest in Store A but slowest in Store B?”

This enables localized inventory strategies—transferring stock between stores, adjusting promotions, or tailoring assortments to regional preferences.

Retailers using Business Central and Copilot report significant improvements:

• Time savings: Automating inventory tasks frees up staff for customer service and strategic planning.
• Reduced stockouts: Predictive analytics help maintain optimal stock levels.
• Lower holding costs: Intelligent forecasting prevents overstocking.
• Improved decision-making: Real-time insights enable faster, data-driven actions.
• Enhanced collaboration: Teams across finance, operations, and sales work from a unified platform.

These gains translate into higher customer satisfaction, increased revenue, and stronger margins.

Security and Scalability

Business Central is built on Microsoft’s secure cloud infrastructure, ensuring data protection and compliance. It scales easily as retailers grow—adding new stores, product lines, or sales channels.

Copilot respects user permissions and data boundaries, ensuring that sensitive inventory data is only accessible to authorized users.

Accessibility and Ease of Use

Copilot’s conversational interface makes inventory management accessible to non-technical users. Store managers, buyers, and merchandisers can interact with the system using plain language—no need for complex queries or reports.

This democratizes data and empowers frontline teams to make smarter decisions.

Microsoft partners and consultants can assist with implementation, customization, and training to ensure success.

Inventory is the heartbeat of retail—and managing it well is essential for profitability and customer satisfaction. With Business Central and Copilot, retailers gain a powerful digital assistant that simplifies inventory tasks, delivers actionable insights, and drives smarter decisions.

Whether you're a boutique store or a multi-location chain, these tools help you stay agile, efficient, and customer-focused in a competitive market. The future of inventory management is intelligent, automated, and conversational—and it’s already here. Let’s kick off your journey by emailing our Microsoft SureStep Ambassadors at This email address is being protected from spambots. You need JavaScript enabled to view it..