Amazon uses AI to increase delivery speed

 

Amazon is increasingly using artificial intelligence (AI) to speed up deliveries by minimizing the distance between products and customers. Stefano Perego, Vice President of Customer Fulfillment and Global Ops Services for North America and Europe at Amazon, outlined how the company is using AI when it comes to logistics. One area is in transportation, such as mapping and planning routes, taking into account variables like the weather. Another area is when customers search for products on Amazon to help them find the right goods.

But a key focus right now for Amazon is using AI to figure out where to place its inventory. "I think one area that we consider key in order to lower cost to serve is on inventory placement," Perego said. Amazon has been focusing on a so-called "regionalization" effort to ship products to customers from warehouses closest to them rather than from another part of the country. But doing so requires technology that is capable of analyzing data and patterns in order to predict what products will be in demand and where. That's where AI comes in.

If a product is nearer to customers, Amazon will be able to make same-day or next-day deliveries, like what its Prime subscription service offers. Perego said the efforts are progressing well. In the United States, more than 74% of the products customers order are now from fulfillment centers within their region, according to Amazon. Amazon is also using robotics in its fulfillment centers to help with repetitive tasks such as lifting heavy packages.

The company said that 75% of Amazon customer orders are handled in part by robotics. There's a debate over how robotics and AI will affect jobs. A Goldman Sachs report earlier this year suggested there could be "significant disruption" to the global labor market, with automation affecting 300 million jobs. Perego described automation as "collaborative robotics," underlining how Amazon sees humans and technology working together.

"I think that what is happening is really a transformation of the type of jobs," Perego said. The executive said that when automation and AI become more widespread, they will change, rather than eliminate, the jobs that workers perform. "Eventually, the type of job that an employee will be called to do in a fulfillment center will be increasingly a high judgment type of job," Perego said. "And the heavy lifting and repetitive tasks will be done through robotics. That's fine. It's a transformation rather than a substitution."

Amazon's use of AI in logistics is part of its broader push to leverage the technology across its business. In January, the company said it would spend $700 million to retrain 100,000 employees, or one-third of its workforce, in new technologies as part of its upskilling program. Amazon has already been using AI in areas like product recommendations and fraud detection, but it's looking to expand its use of the technology in new ways.

For instance, the company is developing a system that uses AI to predict when a customer is going to order a product, based on factors such as previous purchases and how long it's been since their last order. The system can then ship products to a warehouse closer to the customer ahead of time, so that they can be delivered more quickly.

The company is also using AI in its grocery business. In December, the company opened its first full-size grocery store that uses the technology to track what customers are buying and automatically charge them for their purchases as they leave the store.

Amazon's use of AI is helping the company to reduce costs, improve efficiency, and provide better service to its customers. By using the technology to make more accurate predictions about what products customers will want and where they will want them, Amazon is able to deliver products more quickly and at a lower cost. And by using robotics to handle repetitive tasks, the AI is also being used by Amazon in other areas of its business, such as in its virtual assistant, Alexa. The voice-controlled assistant uses AI to understand natural language and answer questions, making it easier for customers to shop with Amazon.

Furthermore, Amazon uses machine learning algorithms to improve the recommendations that it provides to its customers. This is a crucial aspect of the company’s business, as recommendations are a major driver of sales on the platform. By analyzing customer data, such as their search history and purchase behavior, Amazon is able to suggest products that are most likely to appeal to each individual customer.

Another way in which Amazon is using AI is by developing self-driving delivery vehicles. The company has been testing its Amazon Scout autonomous delivery robots in select areas, which are able to navigate sidewalks and safely deliver packages to customers. These robots use machine learning to navigate their surroundings and avoid obstacles, making them a promising tool for reducing delivery times in the future.

Amazon’s use of AI in logistics and delivery is not only improving the customer experience but also helping the company to stay ahead of its competitors. By utilizing machine learning algorithms to optimize its supply chain and fulfillment operations, Amazon is able to offer faster and more reliable delivery times than many of its rivals.

However, there are concerns that the use of AI and robotics in the logistics industry could lead to job losses. While Amazon emphasizes that it sees humans and technology working collaboratively, there is no doubt that automation will lead to changes in the types of jobs that are available in the sector.

Despite these concerns, the trend towards automation and AI in logistics is unlikely to slow down. As consumer demand for faster and more reliable delivery continues to increase, companies like Amazon will be under pressure to adopt new technologies in order to stay competitive.

Overall, Amazon’s use of AI in logistics and delivery is a prime example of how the technology can be harnessed to improve the efficiency and effectiveness of business operations. By utilizing machine learning algorithms to optimize its supply chain and fulfillment operations, Amazon is able to offer faster and more reliable delivery times to its customers, while also staying ahead of its competitors in a highly competitive industry.