Stefano Perego, the vice president of customer fulfilment and global ops services for North America and Europe at Amazon, recently spoke to CNBC about how the company is using artificial intelligence (AI) to speed up deliveries. One of the areas where AI is being used is in transportation, such as mapping and planning routes, while considering variables like weather. Another area where AI is being utilized is when customers search for products on Amazon to help them find the right goods. However, a key focus for Amazon right now is using AI to determine where to place its inventory.
Regionalization and Robotics
Amazon has been focusing on a “regionalization” effort to ship products to customers from warehouses closest to them, rather than from another part of the country. This requires technology capable of analyzing data and patterns to predict what products will be in demand and where. If a product is closer to customers, Amazon will be able to make same-day or next-day deliveries, like what its Prime subscription service offers. Amazon is also using robotics in its fulfilment centers to help with repetitive tasks such as lifting heavy packages. Perego described automation as “collaborative robotics,” underlining how Amazon sees humans and technology working together.
The company has revealed that 75% of Amazon customer orders are handled in part by robotics. However, there’s a debate over how robotics and AI will affect jobs. A Goldman Sachs report earlier this year suggested there could be “significant disruption” to the global labor market, with automation affecting 300 million jobs. Perego said that when automation and AI become more widespread, they will change, rather than eliminate, the jobs that workers perform. Eventually, the type of job that an employee will be called to do in a fulfilment center will be increasingly a high-judgment type of job. Heavy lifting and repetitive tasks will be done through robotics, which is considered a transformation rather than a substitution.
In the United States, more than 74% of the products customers order are now from fulfilment centers within their region, according to Amazon. Perego said the company is progressing well with its efforts. Amazon’s inventory placement is a complex problem considering the vast selection it offers to customers. The company’s use of AI assists in reducing the distance to fulfill orders to customers, and it increases the speed of delivery. Amazon’s use of AI and robotics is a transformation that enhances the customer experience while working collaboratively with humans.
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