Amazon is harnessing the power of artificial intelligence in its efforts to maintain its dominant position in the world of online commerce. According to reports, the company is using AI to identify areas with high demand for products, with the goal of improving the speed of delivery.
Stefano Perego, Amazon’s vice president of customer fulfillment and global ops services, explained this strategy to CNBC. By employing artificial intelligence, Amazon aims to optimise delivery routes and determine the most efficient stops, taking into account variables such as weather conditions. Additionally, the use of AI will enhance the online shopping experience, enabling customers to more easily find the items they are searching for. Perego referred to this endeavour as “regionalisation,” wherein AI is employed to determine optimal inventory placement in high-demand regions, ultimately reducing delivery times.
“So now, I’m pretty sure you’re familiar with the vast selection we offer to our customers,” Perego told CNBC. “Imagine how complex is the problem of deciding where to place that unit of inventory. And to place it in a way that we reduce distance to fulfill to customers, and we increase speed of delivery.”
To speed up delivery times through the regionalisation approach, Amazon must rapidly analyse a vast number of data points and patterns associated with hundreds of thousands, if not millions, of products. This analysis aims to identify the specific geographic areas where certain items are in high demand and potentially understand the reasons behind this demand. Consequently, these sought-after items will be stocked in warehouses strategically located in these hotspots. Perego noted this strategy has proven successful, with 74 percent of customer shipments originating from warehouses within their respective regions.
Robots in Amazon warehouses
Within its fulfillment centre, Amazon employs robotics to assist in executing repetitive tasks, including the lifting of heavy packages.
According to the company, approximately 75 percent of Amazon customer orders involve the use of robotics to some extent.
The impact of robotics and AI on employment has sparked a debate, including the influence of AI chatbots like the ChatGPT developed by startup OpenAI. A recent report from Goldman Sachs suggested that the global labor market could face “significant disruption,” with automation potentially affecting around 300 million jobs.
Perego referred to automation as “collaborative robotics,” highlighting Amazon’s perspective on the symbiotic relationship between humans and technology.
He noted that he believes that the ongoing shift with AI is “really a transformation of the type of jobs.”
The executive stated that as automation and AI become more prevalent, they will alter the nature of jobs rather than completely replacing them.
Perego expressed that in the future, the roles assigned to employees in fulfillment centers will primarily involve making informed decisions based on sound judgment. Meanwhile, robotics will take on the responsibilities of physically demanding tasks and repetitive actions. He emphasised that this shift is not a replacement of human workers but rather a transformative process, indicating that it is a positive evolution for the industry.
