Stefano Perego, Amazon’s vice president of customer fulfilment and global operational services for North America and Europe, discussed how the company is utilizing AI in logistics.
According to Perego, one topic is transportation, such as mapping and route planning while considering variables such as weather.
Another instance is when buyers use Amazon to assist them find the proper things.
However, Amazon is currently focusing on using AI to determine where to position its goods.
“I think one area that we consider key in order to lower cost to serve is inventory placement,” said Perego.
“By now, I’m sure you’re aware of the extensive range we provide to our customers. Consider how difficult it is to decide where to position an inventory unit. And to position it in such a way that we reduce the distance traveled to fulfill client orders while increasing delivery speed.”
Amazon has been focusing on a “regionalization” initiative to supply products to clients from warehouses near them rather than from elsewhere in the country.
However, doing so necessitates the use of technology capable of analyzing data and patterns in order to forecast which products will be in demand and where.
This is where artificial intelligence comes in. If a product is closer to customers, Amazon will be able to provide same-day or next-day delivery, similar to what its Prime subscription service provides.
According to Perego, the initiatives are going well. According to Amazon, more than 74% of the products customers order in the United States are now fulfilled from fulfillment centers in their region.
Emphasis on robotics
Amazon also employs robotics in its fulfillment operations to assist with repetitive chores like carrying big goods.
According to the corporation, robotics handle 75% of Amazon client orders.
The impact of robotics and artificial intelligence, such as the ChatGPT AI chatbot developed by startup OpenAI, on occupations is being debated. Earlier this year, Goldman Sachs predicted that automation would cause “significant disruption” in the global labor market, affecting 300 million jobs.
Perego referred to automation as “collaborative robotics,” emphasizing how Amazon views humans and technology collaborating.
“I believe what is happening is a true transformation of the types of jobs,” Perego explained.
According to the CEO, as automation and AI become more prevalent, they will modify, rather than destroy, the occupations that employees perform.
“Eventually, the type of job that an employee in a fulfillment center will be called to do will be increasingly a high judgment type of job,” Perego predicted. “Robotics will handle the heavy lifting and repetitive tasks.” That’s all right. It’s a metamorphosis, not a substitution.”
