Amazon is focused on using artificial intelligence to get things to you faster

Amazon is focusing on using artificial intelligence to speed up deliveries — by reducing the distance between its products and customers, a senior executive told CNBC.

Stefano Perego, Vice President of Customer Fulfillment Services and Global Operations for North America and Europe at Amazon, explained how the company uses artificial intelligence when it comes to logistics.

One area, Perego said, is transportation, such as mapping and planning routes, taking into account variables such as weather.

Another area is when customers search for products on Amazon to help them find the right goods.

But the main focus now for Amazon is using artificial intelligence to figure out where to put its inventory.

“I think one of the areas that we consider key in order to reduce cost of service is inventory positioning,” Perego said.

“By now, I’m quite sure you are familiar with the wide range we offer our customers. Imagine the complexity of the problem of deciding where to place that unit of inventory. And placing it in such a way that we reduce the distance to meet customer needs, and we increase delivery speed.”

Amazon is focusing on so-called “localization” efforts to ship products to customers from warehouses closest to them rather than shipping products from another part of the country.

But doing so requires technology capable of analyzing data and patterns in order to predict what products will be in demand and where.

This is where artificial intelligence comes in. If the product is closer to customers, Amazon will be able to make same-day or next-day deliveries, like what the Prime subscription service offers.

Perego said the effort is progressing well. In the United States, more than 74% of products ordered by customers now come from fulfillment centers within their region, according to Amazon.

Amazon is also using bots in its fulfillment centers to help with repetitive tasks like lifting heavy packages.

The company said that 75% of Amazon customer orders are handled in part by bots.

There is debate about how bots and artificial intelligence — such as the ChatGPT AI chatbot developed by startup OpenAI — 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 the automation as “collaborative bots,” emphasizing how Amazon sees humans and technology working together.

“I think what’s happening is really a shift in the type of jobs,” Perego said.

The executive said that as automation and artificial intelligence become more widespread, they will change rather than eliminate the jobs workers perform.

“Ultimately, the type of job an employee will be asked to do in a fulfillment center will increasingly be a highly judgmental type of job,” Perego said. “And the heavy, repetitive lifting tasks will be done by robots. That’s good. It’s a transformation, not a replacement.”