Amazon is prioritizing using artificial intelligence (AI) to enhance delivery speed by reducing the distance between products and customers.
Speaking to CNBC on May 15, Stefano Perego, vice president of customer fulfillment and global operations services for North America and Europe at Amazon, said that artificial intelligence plays a role in various aspects of Amazon’s operations. This includes using AI for transportation, such as mapping and route planning, and considering factors like weather conditions. Additionally, AI assists customers in finding the desired products when searching on Amazon.
Currently, Amazon is prioritizing AI to optimize its inventory. Perego emphasized the significance of inventory placement as a crucial area to reduce the cost of providing services:
“Imagine how complex the problem of deciding where to place that unit of inventory is. And to place it in a way that we reduce the distance to fulfill to customers, and increase the speed of delivery.”
Amazon has been prioritizing its “regionalization” initiative, which aims to deliver products to customers from nearby warehouses instead of distant locations. However, achieving this goal requires advanced technology to analyze data and patterns to anticipate product demand and determine optimal inventory placement.
AI plays a crucial role in achieving this goal. By strategically placing products closer to customers, Amazon can facilitate same-day or next-day deliveries, similar to its Prime subscription service. According to Perego, the company’s efforts in this regard have been successful, with over 74% of customer orders in the United States being fulfilled from nearby distribution centers.
On April 13, Amazon announced the release of Bedrock, an artificial intelligence model that will allow Amazon Web Services users to build out generative AI from foundation models.