A senior Amazon official told CNBC that the e-commerce giant is focusing on using artificial intelligence to speed up deliveries, by reducing the distance between its products and customers.
Stefano Perego , Vice President of Amazon Customer Fulfillment Services and Global Operations in North America and Europe, explained how the company uses artificial intelligence when it comes to logistics.
(Perego) said that among the areas in which he focuses is transportation, such as: mapping, and road planning, taking into account variables, such as: weather. Also among the areas is helping customers, who are searching for products on Amazon, to find the right goods.
But the main focus now for Amazon is using artificial intelligence to figure out what the inventory status is.
“I think one of the areas that we consider essential in order to reduce the cost of service is the inventory position,” Perego said.
He pointed out that with the huge amount of products that Amazon offers to its customers, locating a product in warehouses is a complicated process, as well as when it comes to providing it in a way that reduces the distance between the product and the customer, which increases the speed of delivery.
Amazon is focusing on a so-called “localization” effort to ship products to customers from warehouses closest to them rather than from another part of the country.
But doing so requires technology capable of analyzing data and patterns in order to predict what products will be in demand and where.
And this is where AI comes in handy. If the product is closer to the customer, Amazon will be able to make same-day or next-day deliveries, like the Prime subscription service does.
And (Perego) said the effort is progressing well. According to Amazon, more than 74 percent of the products ordered by customers in the United States now come from fulfillment centers within their region.
Amazon is also using bots in its fulfillment and coordination centers to assist with repetitive tasks, such as lifting heavy packages.
The company said it uses bots to partially handle 75% of its customers’ orders.
There is debate about how bots and AI affect jobs, particularly with regard to the ChatGPT bot developed by the artificial intelligence research firm OpenAI.
A Goldman Sachs report earlier this year indicated that there could be “significant disruption” in the global labor market, with automation affecting 300 million jobs.
Perego described the automation as “collaborative bots,” confirming that Amazon envisions a future in which humans and technology work together.
The executive said that as automation and artificial intelligence become more prevalent, they will change rather than eliminate the jobs workers perform.
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