- Amazon is implementing artificial intelligence in logistics and inventory organization to improve delivery speed and reduce costs.
- It is also using robots in warehouses to help with heavy, repetitive tasks while employees collaboratively do more skilled work.
- Although there are concerns about the impact of automation on the global job market, Amazon sees the transformation as an opportunity to improve efficiencies.
Amazon rides the wave of artificial intelligence. In fact, it is already using this kind of development to shorten the distance between its products and customers.
A senior Amazon executive confirmed this to CNBC.
Stefano PeregoAmazon’s vice president of Customer Fulfillment and Global Operations Services, said the biggest AI-related deployments are focused on logistics.
On the one hand, artificial intelligence is being used to optimize mapping and route planning, taking into account all kinds of variables, such as the weather, for example, Perego explained.
On the other hand, artificial intelligence systems are being applied when customers search for products on the platform, with the idea of helping them find what they need faster and more efficiently.
But there is a business space where Amazon is also using AI: inventory organization.
According to Perego, AI will be key to reducing inventory location costs.
Amazon’s goal is that with AI they can locate products in the right places so that they are found as quickly as possible and shipped without delay. “We want to reduce that distance and meet customers at a faster delivery speed,” he said.
When Amazon talks about “location”, it refers to the site within the warehouses, but especially to “regionalization”. That is, with AI, You expect to have the products that customers are going to buy at the nearest store.
To achieve this, they need technologies that are capable of analyzing data and patterns to predict which products will be in demand and from where.
That’s where AI plays a key role: if an item is closer to a customer, same-day deliveries can be made.
According to Perego, the artificial intelligence systems they are applying are already showing results in the United States: more than 74 percent of the items that customers order arrive from fulfillment centers within their own region.
Amazon, AI and robotics
In parallel, Amazon is also implementing robotics in its distribution warehouses to help employees with repetitive and heavy tasks.
According to the company founded by Jeff Bezos, 75 percent of customer orders are handled by robots somewhere in the delivery.
There is a strong debate related to how robotics and AI, like ChatGPT, for example, will affect jobs around the world.
A Goldman Sachs statistical paper from early 2023 says that “there could be significant disruption” in the global labor market and that mass automations would affect 300 million jobs.
According to Perego, at Amazon they use the “collaborative robotic automation”. The executive says that humans work together with robots, collaboratively.
“The type of work of a logistics center employee will increasingly be skilled employment, leaving heavy labor and repetitive tasks to robotics. It is about transformation rather than substitution,” she said.
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