Amazon is prioritizing the use of artificial intelligence (AI) to improve delivery speed by reducing the distance between products and customers.
Artificial intelligence plays a role in every aspect of Amazon's operations, Stefano Perego, Amazon's vice president of customer fulfillment and global operations services for North America and Europe, told CNBC on May 15. This includes using AI for transportation, such as mapping and route planning , and taking into account factors such as weather conditions. Also, artificial intelligence helps customers find desired products while searching on Amazon.
Currently, Amazon is prioritizing artificial intelligence to optimize its inventory. Perego highlighted the importance of inventory placement as a key area in reducing the cost of providing services: “Imagine how complicated it is to decide where to put a SKU. And put it in a way that we can shorten the distance to our customers and increase the speed of delivery.”
Amazon has been prioritizing its "regionalization" program, which aims to deliver products to customers from nearby warehouses rather than distant locations. Achieving this goal, however, requires advanced technology to analyze data and patterns to forecast product demand and determine optimal inventory placement. Artificial intelligence plays a vital role in making this happen. By strategically placing products closer to customers, Amazon can facilitate same-day or next-day delivery, similar to its Prime subscription service. According to Perego, the company's efforts have been successful , with more than 74 percent of customer orders in the US fulfilled from nearby distribution centers.
On April 13, Amazon announced the release of Bedrock, an AI model that allows Amazon Web Services users to build AI from base models.
