Transforming E-commerce: How Amazon is Harnessing AI
Amazon's quest for expedited delivery is turning towards artificial intelligence (AI) as a solution. Stefano Perego, Amazon's Vice President of Customer Fulfillment and Global Ops Services for North America and Europe, shared the company's vision of leveraging AI to boost logistics.
AI plays a crucial role in transportation, helping to map and plan routes while considering dynamic variables like weather. It also aids customers in finding the right products on Amazon's platform.
However, the critical focus of Amazon's AI application is inventory placement. Perego emphasized the complexity of deciding where to store each unit of inventory to reduce fulfillment distance and increase delivery speed. AI technology is pivotal in analyzing data and predicting product demand patterns, which enables Amazon to regionalize its distribution, storing products closer to the customer base.
Amazon's regionalization strategy is making strides, with more than 74% of products customers order in the United States now coming from regional fulfillment centers.
In addition to AI, robotics are playing a significant role in Amazon's operations, specifically in repetitive tasks like heavy lifting. Amazon reports that 75% of customer orders involve robotics at some point in the process.
Perego addressed the debate about the impact of AI and robotics on employment, viewing automation as "collaborative robotics." He believes that the proliferation of automation and AI will transform jobs rather than eliminate them. In Amazon's vision, employees in fulfillment centers will increasingly handle high-judgment tasks while robotics take care of heavy lifting and repetitive tasks.
However, the critical focus of Amazon's AI application is inventory placement. Perego emphasized the complexity of deciding where to store each unit of inventory to reduce fulfillment distance and increase delivery speed. AI technology is pivotal in analyzing data and predicting product demand patterns, which enables Amazon to regionalize its distribution, storing products closer to the customer base.
Amazon's regionalization strategy is making strides, with more than 74% of products customers order in the United States now coming from regional fulfillment centers.
In addition to AI, robotics are playing a significant role in Amazon's operations, specifically in repetitive tasks like heavy lifting. Amazon reports that 75% of customer orders involve robotics at some point in the process.
Perego addressed the debate about the impact of AI and robotics on employment, viewing automation as "collaborative robotics." He believes that the proliferation of automation and AI will transform jobs rather than eliminate them. In Amazon's vision, employees in fulfillment centers will increasingly handle high-judgment tasks while robotics take care of heavy lifting and repetitive tasks.
