Amazon, the global e-commerce behemoth, is actively integrating artificial intelligence (AI) into its logistics operations, aiming to enhance efficiency and speed up deliveries.
Stefano Perego, Vice President of Customer Fulfilment and Global Ops Services for North America and Europe at Amazon, recently shed light on this strategic move.
AI: The game changer in Amazon’s logistics
Amazon’s logistics system is becoming increasingly dependent on AI. The company is using AI for a myriad of tasks, such as mapping and planning delivery routes while considering various factors like weather conditions.
AI also plays a pivotal role in improving the customer experience, helping shoppers find the right goods among Amazon’s vast product range.
However, the primary focus of Amazon’s AI deployment is inventory placement. Perego stated, “Imagine how complex is the problem of deciding where to place that unit of inventory. And to place it in a way that we reduce the distance to fulfill to customers, and we increase the speed of delivery.”
To tackle this complexity, Amazon leverages AI to analyze data and patterns to predict what products will be in demand and where.
Amazon has been working on a ‘regionalization’ strategy, aiming to ship products to customers from the nearest warehouses, which necessitates a robust AI system capable of making accurate predictions.
As a result, more than 74% of the products ordered by US customers are now shipped from fulfillment centers within their region.
Robotic assistance in fulfillment centers
The use of AI isn’t limited to inventory management and logistics optimization. Amazon is also harnessing the power of robotics in its fulfillment centers, assisting with repetitive tasks like heavy lifting. Around 75% of Amazon customer orders are now partially handled by robotics.
There’s a growing debate about the impact of AI and robotics on the job market. For instance, a report by Goldman Sachs earlier this year suggested that automation could disrupt 300 million jobs worldwide. However, Perego takes a different view, describing Amazon’s approach as ‘collaborative robotics’.
According to Perego, AI, and automation will not eliminate jobs but will transform the nature of work. He believes that the rise of AI and automation will lead to more ‘high judgment’ types of jobs in fulfillment centers, while robotics will handle the heavy lifting and repetitive tasks.
Perego’s vision of the future of work is one where humans and AI coexist and collaborate, transforming the nature of jobs rather than substituting them.
It’s a future where AI’s predictive power and robotics’ physical prowess complement human judgment and creativity, creating a more efficient and innovative logistics system.
Amazon’s logistics operations are undergoing a significant transformation, driven by AI and robotics. This change is not just about improving efficiency and speed of delivery, but also about redefining the future of work in the logistics industry.
It’s a story of how technology and humans can work hand in hand to elevate an industry to new heights.
