Amazon will harness the power of artificial intelligence (AI) to enhance its delivery process and bridge the gap between products and customers. Stefano Perego, Amazon’s Vice President of Customer Fulfillment and Global Operations Services for North America and Europe, made this known while highlighting the significant role of AI across various areas of Amazon’s operations during an interview with CNBC on May 15, 2023.
Perego explained how the company already uses AI in its logistics; he mentioned tasks like mapping, route planning, and considering factors such as weather conditions. He also pointed out how AI assists customers in finding their desired products while searching on the Amazon platform.
One crucial area the company is focused on leveraging AI is inventory placement, as it plays a key role in lowering the cost of service. Perego noted that determining the optimal location for each inventory unit is a complex task, and they must minimize the distance to customers and maximize delivery speed if they want to reduce their service costs.
Amazon adopts a “regionalization” strategy to streamline its goods delivery process. This strategy involves shipping products to customers from nearby warehouses rather than distant locations. However, this approach requires advanced technology capable of analyzing data and patterns to anticipate demand and determine the most suitable locations. By leveraging AI in this process and ensuring products are geographically closer to customers, Amazon can offer fast deliveries comparable to its Prime subscription’s quick service.
Perego noted that progress has been positive, with over 74% of products ordered by customers in the United States now originating from fulfillment centers within their respective regions.
Amazon’s focus on AI comes when many companies impose restrictions and regulations on AI technologies. In a separate development, DeFi Planet reported that Samsung implemented a ban on the use of generative AI tools, including ChatGPT, by its employees in their work and office practices. The ban was enforced because some engineers uploaded confidential company data to the ChatGPT platform. An internal memo obtained in the report stated that Samsung’s decision is driven by concerns regarding the security risks associated with generative AI.
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