Amazon is harnessing the power of AI to enhance its operations and keep a competitive edge in the ever-evolving landscape of online shopping

Barcelona, May 17, 2023.- The implementation of artificial intelligence solutions in logistics is a good strategy to discover its benefits. For example, Amazon:

As reported by Logistics Middle East magazine, in an interview with CNBC, Amazon’s vice president of customer fulfilment and global ops services, Stefano Perego, unveiled the company’s strategy to enhance the efficiency of its operations.

By leveraging AI tools, Amazon aims to optimise delivery routes and determine the most efficient stops, taking into account variables such as weather conditions.

Moreover, the company will use AI to enhance the online shopping experience, enabling customers to easily find the items they are searching for, a process Perego referred to as “regionalisation,” wherein AI is used to determine optimal inventory placement in high-demand regions, and ultimately reduce delivery times.

“I am pretty sure you are familiar with the vast selection we offer to our customers,” Perego said, emphasising that such a broad offering presents the complex challenge of deciding where to place a specific unit of inventory and to place it in a way that reduces the distance to fulfill to customers and increase the speed of delivery.

To expedite delivery 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 that this strategy has proven successful, with 74% of customer shipments originating from warehouses within their respective regions.

Robotics play an integral role in Amazon’s operations, especially across its fulfilment centres, where the company utilises robotics to support in executing repetitive tasks, including lifting heavy packages.

According to the company, approximately 75% of 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 labour market could face “significant disruption,” with automation potentially affecting around 300 million jobs.

On his part, Perego referred to automation as “collaborative robotics,” stressing that Amazon focuses on fostering a synergetic relationship between humans and technology.

Moreover, he noted that the ongoing shift is “a transformation of the type of jobs,” adding that as automation and AI become more prevalent, they will alter the nature of jobs rather than completely replace them.

Perego further explained 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.

Information by Logistics Middle East


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