Amazon is deploying AI to fine-tune its deliveries to customers.

Amazon is leveraging artificial intelligence (AI) to accelerate its delivery operations, according to a senior executive interviewed by CNBC. The company is focusing on using AI to minimize the distance between its products and customers to offer quicker shipping.

To achieve this, Amazon has been implementing a regionalization strategy, dispatching products from warehouses closest to customers rather than shipping them from distant locations. Such an approach requires advanced technology capable of analyzing data and patterns to predict demand and determine optimal inventory placement, and this is where AI comes into play. By ensuring products are geographically closer to customers, Amazon can provide expedited services like same-day or next-day deliveries, similar to its Prime subscription offering.

Stefano Perego, Amazon’s Vice President of Customer Fulfilment and Global Operations Services for North America and Europe, highlighted the role of AI in the company’s logistics operations. AI is utilized in various aspects, including transportation planning and route optimization, considering factors like weather conditions.

AI is also employed to assist customers in finding the right products during their search. However, the current primary focus for Amazon is leveraging AI to determine the most effective inventory placement.

Perego explained the complexity of the challenge given Amazon’s vast selection, emphasizing the importance of reducing fulfillment distance and increasing delivery speed.

Amazon’s regionalization efforts have been successful, with over 74% of customer orders in the United States now fulfilled by warehouses within their region. In addition to AI, Amazon is also incorporating robotics in its fulfillment centers to automate repetitive tasks such as lifting heavy packages.

Perego emphasized that automation, including robotics and AI, should be viewed as collaborative tools that work alongside human employees. He believes that as automation becomes more prevalent, the nature of jobs in fulfillment centers will evolve rather than disappear. While automation handles heavy lifting and repetitive tasks, employees will be assigned jobs that require higher judgment.

This transformation represents a change rather than a substitution of job roles, as humans and technology collaborate to optimize operations.

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