How Amazon Is Delivering Packages Faster With The Help Of Generative AI
Summary
TLDRAmazon's Northern California warehouse, spanning 1 million square feet, exemplifies the integration of generative AI in logistics, with hundreds of robots and employees working in tandem. This tech-driven approach enhances package sorting and delivery, reducing shipping times and environmental impact. Amazon's extensive data collection enables precise demand forecasting and efficient inventory management, promising faster delivery times. However, concerns about job displacement and the carbon footprint of AI operations linger.
Takeaways
- 🏭 Amazon's fulfillment centers use a combination of human labor and AI-driven robots to sort and ship packages efficiently.
- 🤖 Generative AI plays a crucial role in Amazon's operations, from product handling with robotic arms to managing fleet congestion with autonomous drives.
- 📈 The use of AI and robotics has allowed Amazon to accelerate package delivery times, with same-day delivery becoming more common.
- 📊 Amazon's early online retail experience gives it a significant advantage in leveraging massive data sets for AI, improving predictions and logistics.
- 🔍 Generative AI helps Amazon in better predicting customer orders, leading to more efficient inventory management and delivery routes.
- 🚚 Amazon has significantly increased its delivery network and uses AI to optimize delivery routes, reducing time and distance traveled.
- 🔋 The environmental impact of AI is a concern, with data centers consuming substantial electricity and water for cooling, potentially offsetting sustainability gains.
- 🤝 Amazon emphasizes that AI and robots are designed to work alongside human workers, creating new roles and opportunities.
- 💡 AI is also used to enhance workplace safety and ergonomics, such as by placing frequently sold items at waist height to reduce employee strain.
- 🌐 Amazon's investment in AI and robotics is extensive, with the aim of improving efficiency, sustainability, and ultimately, profitability.
Q & A
How is Amazon utilizing generative AI in its fulfillment centers?
-Amazon is using generative AI to manage robotic systems, like the Robin arms and Pegasus drive units, which are responsible for sorting and moving products. AI also optimizes fleet routes, forecasts demand, and enhances safety by making ergonomic improvements in product handling.
What are some benefits of using generative AI in Amazon’s operations?
-Generative AI helps Amazon improve efficiency, reduce package delivery times, and enhance sustainability by optimizing inventory placement and reducing the distance packages need to travel. It also helps identify damaged products, minimizing waste and returns.
How does Amazon's use of AI contribute to faster delivery speeds?
-AI enables better demand forecasting and supply chain optimization, helping Amazon predict what items are needed, where, and when. Robots powered by AI can prioritize same-day or next-day deliveries, reducing delays and improving speed.
What role do robots play in Amazon's fulfillment centers?
-Robots like Robin arms and Pegasus drive units handle tasks like sorting packages by neighborhood and moving products to the right spots in warehouses. These robots reduce the physical strain on workers and improve efficiency in order processing.
What challenges does Amazon face in balancing automation with human labor?
-Amazon faces the challenge of integrating automation in a way that complements human labor rather than fully replacing it. While robots handle many tasks, Amazon emphasizes creating new job roles in areas like maintenance and training workers for more technical positions.
How is Amazon addressing workplace safety with AI?
-Amazon uses AI to improve worker safety by reducing the need for physical strain. For example, fast-selling products are placed at waist height to avoid excessive reaching or bending. AI also helps monitor safety risks, like preventing collisions with autonomous robots.
What environmental concerns are associated with Amazon’s AI infrastructure?
-The large-scale use of AI requires significant energy consumption for running data centers, which raises concerns about the environmental impact. Amazon has pledged to reduce its carbon footprint, but running AI workloads can hinder progress toward its net-zero carbon goal.
How does Amazon’s generative AI help in reducing package waste?
-AI helps Amazon identify damaged products before they are shipped, reducing returns and preventing waste. It also optimizes packaging choices, further cutting down on materials used and damaged goods.
What innovations has Amazon made in last-mile delivery through AI?
-Amazon is using over 20 machine learning models to optimize last-mile delivery routes, helping drivers avoid traffic and take more efficient paths. This reduces delivery times and lessens the pressure on drivers to meet tight schedules.
What are Amazon’s privacy measures when using AI for personalized shopping experiences?
-Amazon aggregates shopping behavior by region rather than tracking individual users directly. AI-generated product recommendations and reviews are based on broader data sets, though there are concerns about user privacy, and opt-out options may be considered in the future.
Outlines
🤖 Amazon's Integration of Generative AI in Warehouse Operations
Amazon's fulfillment centers utilize generative AI to enhance package sorting and delivery efficiency. The Northern California warehouse, spanning 1 million square feet, employs both human labor and hundreds of robots to manage the logistics. Generative AI plays a pivotal role in tasks such as product perception, grasping, and movement using Robin arms, as well as managing fleet congestion with Pegasus robotic drives. Amazon has been able to accelerate delivery times from two-day to same-day shipping, largely due to improved algorithms and AI-enabled robotics. The company's early start as an online retailer has provided it with extensive data crucial for AI development, leading to better predictions of customer orders and more efficient delivery routes. However, concerns about the potential negative impacts, such as job displacement and environmental costs due to increased energy and water usage for data centers, are also discussed. Despite these concerns, Amazon asserts that AI contributes to cost and carbon footprint reduction through more efficient planning.
🚚 Rapid Delivery Expansion and Its Impact on Labor and Sustainability
Amazon has significantly increased its delivery speed, with 60% of Prime customer deliveries in March being same-day or next-day. This rapid expansion is attributed to a combination of engineering, workforce, processes, and technology, with generative AI being a significant factor, especially for new products with little or no sales history. The physical labor required for such speed is substantial, but Amazon claims that the use of robots can alleviate this burden, improving ergonomics and reducing the need for extensive walking by workers. The company has faced criticism over workplace safety and injuries, but argues that AI can help improve these conditions. Amazon's investment in robotics, starting with the acquisition of Kiva Systems in 2012, has led to the deployment of over 750,000 robots, enhancing prioritization and efficiency in delivery. The next generation of drive units, Proteus, and the Robin arms, which have handled around 2 billion packages, demonstrate the significant advancements in automation. Amazon also explores the use of humanoid robots like Digit and partnerships with AI startups to expand the capabilities of robots. The challenge for Amazon is to balance automation with human labor, creating new roles and upskilling employees, while maintaining its responsibility to shareholders.
🌍 The Role of AI in Enhancing Amazon's Sustainability and Efficiency
Amazon employs AI to improve sustainability by optimizing inventory management, reducing packaging, and minimizing damaged items. The company's AI can predict regional inventory needs and packaging choices, and it is three times more effective than humans at identifying damaged products. Amazon's vast data collection allows it to use computer vision and generative AI to detect and sideline potentially damaged packages before shipping. Despite the environmental concerns related to the carbon footprint of training and running AI, Amazon continues to invest in AI technologies, including its own AI-focused microchips and tools like Amazon Q and Bedrock. The company's commitment to AI is also evident in its investment in AI startup Anthropic and the development of AI-powered tools for developers. Amazon aims to use AI to reduce the time and distance products travel, which is beneficial for both speed and sustainability. The company also uses AI to enhance the efficiency of the last-mile delivery process, with machine learning models optimizing delivery routes and new electric vans equipped with AI-enabled cameras and routing systems.
🛒 Generative AI's Influence on Amazon's Personalized Shopping Experience
Amazon is leveraging generative AI to create hyper-personalized shopping experiences by analyzing aggregate sales history and geographic data to predict customer behavior. The company uses AI to generate product recommendations, write targeted product listings, and even create AI-generated review highlights to assist shoppers in making informed decisions. In 2023, Amazon launched Rufus, a conversational shopping assistant powered by generative AI, to streamline product recommendations further. While there are privacy concerns regarding the use of customer data for personalized recommendations, Amazon emphasizes that it focuses on aggregate behavior rather than individual customer data. The company is committed to integrating generative AI into all aspects of its operations to enhance speed, efficiency, and profitability, with the goal of improving the overall customer experience.
Mindmap
Keywords
💡Fulfillment Centers
💡Generative AI
💡Robotic Drives
💡Same-day Delivery
💡Data Centers
💡Ergonomics
💡AI Transformer Models
💡Automation
💡Sustainability
💡Machine Learning Models
💡Privacy
Highlights
Amazon's fulfillment centers use a combination of human labor and AI-driven robots to sort and ship packages.
Generative AI is integral to Amazon's operations, enhancing package handling and managing fleet congestion.
Amazon has been able to reduce delivery times from two-day to same-day, thanks to improved algorithms and AI-enabled robots.
The 1,000,000 square foot warehouse in Northern California exemplifies Amazon's use of technology in logistics.
Amazon's online start gives it a significant advantage in the data needed for generative AI.
Generative AI helps Amazon predict customer orders more accurately, leading to more efficient inventory management.
The use of AI in Amazon's logistics has increased the number of same-day deliveries.
Amazon's AI investments have led to the deployment of hundreds of thousands of robots in its facilities.
The potential downside of generative AI includes job displacement and environmental impacts.
Amazon claims that AI helps reduce costs and carbon footprint through more efficient planning.
AI allows Amazon to optimize product placement, reducing shipping distances and improving sustainability.
Amazon's head of transportation technology discusses the company's plans for AI integration in operations.
Amazon Prime's launch in 2005 introduced two-day shipping, which was revolutionary at the time.
Amazon's data collection and AI capabilities have been key differentiators since its early days as an online retailer.
Amazon's AI and robotics advancements have led to a significant increase in delivery speeds and efficiency.
Amazon's use of AI in robotics has improved the ergonomics and safety for warehouse workers.
The company has faced challenges with workplace injuries, but AI is being used to improve workplace safety.
Amazon's AI-driven robots, like Proteus and Robin arms, are becoming more autonomous and efficient.
Amazon is investing in AI to create new job roles and upskill its workforce.
AI is used to optimize inventory placement, reducing the distance products travel before being shipped.
Amazon's AI is also used to improve packaging choices and reduce damaged items.
The company is working towards net-zero carbon by 2040, with AI playing a role in sustainability efforts.
Amazon's investment in AI startups and its own AI tools aim to improve operational efficiency and profits.
AI is being used to optimize delivery routes and reduce the time and distance for the last mile of delivery.
Amazon's use of AI-generated review highlights and conversational shopping assistants aims to enhance the customer experience.
Amazon is committed to integrating generative AI into all aspects of its operations for increased speed and efficiency.
Transcripts
So fulfillment centers ship into this building.
This building sorts those packages.
Then they flow out to our delivery stations.
Inside this 1,000,000 square foot warehouse in Northern
California, amazon packages are handled by hundreds of
people and hundreds of robots, all increasingly driven
by tech's biggest craze.
Generative AI underpins everything we're doing here
with perceiving, grasping and moving products with the
Robin arms to managing fleet congestion with our
Pegasus robotic drives.
For years, Amazon has sped up package delivery two-day,
one-day, and now, more and more, same-day made
possible by more workers but also by rapidly improving
algorithms and AI-enabled robots.
What you see here is I like to call it our dance floor.
And thanks to being an online retailer from the start,
Amazon has a big advantage when it comes to the
massive data needed for generative AI.
Absolutely. Amazon has been better at it than probably
every other retailer out there.
Think better predictions of exactly what you're going
to order from where and when.
Hundreds of thousands of robots and more efficient
delivery routes.
But not all the change that could come from generative
AI is positive.
In the event that they were able to leverage generative
AI and fully automate the fulfillment center, I think
that would be problematic.
The other downside that we don't talk about enough is
the negative impact on the environment: the costs of
running data centers, the use of electricity, the use
of water for cooling.
Still, Amazon says AI helps cut costs and its carbon
footprint thanks to more efficient planning.
It seems subtle, but at this scale, getting like just
one more product in the right spot means that it's
shipping less distance when you order it.
Better speed, lower distance traveled, better
sustainability.
CNBC visited Amazon's largest California sort center
and a same-day warehouse nearby to see firsthand how
it's putting AI to work at every step of operations,
and sat down with Amazon's head of transportation
technology to find out just how far the e-commerce
giant plans to take
it.
When Amazon Prime launched in 2005, two-day shipping
was virtually unheard of.
And although it's now standard and free for millions
of items if you're a Prime member, it's a grueling
logistical lift.
Along here, you see Robin arms, which are robotic arms.
They're loading packages, with employees, onto Pegasus
drive units. Those Pegasus drive units are then
sorting packages by neighborhood.
Steve Armato started at Amazon as a software engineer
before Prime, in 2001.
A lot of the things you see today, those weren't there
in 2001.
We had five fulfillment centers back then.
Now we have hundreds.
The delivery vans that you see in the neighborhood,
none of that was there.
Traditional retailers like Walmart and Target were
selling online, but they hadn't started making
promises of speed.
Back then, you know, mail order when Amazon started,
you'd be lucky if you could get something in 2 to 3
weeks. And, you know, Amazon would still promise like
a week and they would yet get it to you in a few days.
So that was amazing.
So how did Amazon pull it off?
The short answer is data.
Long before generative AI became all the rage with the
release of ChatGPT in 2022, general AI was a huge
differentiator for Amazon.
As an early online-only retailer, Amazon had a unique
ability to collect mass aggregate data on shopping
behavior and use it to create algorithms to maximize
sales and speedy logistics.
We've been working on AI over 25 years.For employees,
a lot of it is around ergonomics and safety.
For customers, it's around vast selection, great
speeds.
Exploiting technology to drive e-commerce sales.
That's essentially what Amazon has done since '97.
Since the beginning.
They are, I would say, hands down the most data heavy
and data savvy company.
It's not that Walmart and Target and Costco and others
don't have their own reams of data, but they're
looking at things a little bit differently, and they
have much older systems.
Amazon is decades younger than its major retail
competitors, but its stock value and footprint have
grown incredibly fast.
Hundreds of warehouses, more than 1.5 million U.S.
employees and more speed.
In 2014, amazon launched Prime Now with some
deliveries arriving in an hour or less.
Then in 2018, Amazon vastly increased its driver
network with the launch of its Delivery Service
Partner program, where it contracts driving out to
some 4,400 small delivery businesses that employ
390,000 drivers.
By 2019, one-day shipping was the norm.
Then in 2020, Amazon began using transformer
architecture, the backbones of what we know of today
as generative AI, to develop models for demand
forecasting and supply chain optimization.
By 2022, it was rolling AI transformer models into its
robotics. All that made shipping times even faster.
Today, drivers are delivering 20 million packages per
day across 20 countries, and in the first quarter of
2024, more than 2 billion items arrived the same or
next day.
60% of our deliveries for Prime customers in March were
same-day or next-day, so there are a lot of those fast
orders for our top 60 metropolitan areas.
Could you have gotten to that 60% number without
generative AI?
Well, I think we've been working on this for decades to
get to this speed.
And it's a combination of engineering, people,
processes, and technology.
Generative AI is a big unlock for us, particularly for
new products where we have sparse or no history for
that sales history for that product.
It's going to come faster because of generative AI.
But all this speed comes at a huge cost, in actual cap
ex, but also human labor, a burden that can be
reduced, Amazon says, with the use of robots.
Before robotics, pickers would need to walk distances
between aisles to pick products, kind of like a
library. And now it's being brought to you more like
self-service. And so that's that's great for
ergonomics. It's great for less walking.
Amazon has faced scrutiny in recent years over its
workplace injury record, with federal citations for
safety violations and a year-long Senate probe that
found Prime Day was a major cause of worker injuries.
Amazon has appealed the citations and said the report
ignores progress it's made, and it says AI can help.
One algorithmic improvement is to take our faster
selling products and place those on the shelves at
waist height. That's your ergonomic power zone.
So less reaching, less bending.
Amazon's big shift to automation started in 2012 with
the purchase of Kiva Systems for $775 million.
Now, Amazon has deployed at least 750,000 robots, more
than double the number it had in 2021.
So generative AI helps with prioritization.
So some of the two-day deliveries might stand aside
and let the robot with a next-day delivery go on its
mission first and take a straight line to its
destination.
Amazon's next generation of drive units, called
Proteus, are fully autonomous.
They're actually outside of this fenced area, moving
things around. They're using generative AI and
computer vision to avoid obstacles and find the right
place to stop, the right place to park.
And then there's Robin arms, which Amazon says have
handled some 2 billion packages so far.
Would these 20 Robin arms be able to do what they're
doing without generative AI?
I think that we would see that they would require a lot
more training. And so generative AI has been really a
step function improvement in being able to infer from
our vast product catalogue about how to handle a given
product, even if I haven't seen that product before.
And although it's only in a couple of warehouses for
now, there's a humanoid robot called Digit that can
grasp and handle items in a similar way to how people
can. And Amazon has a new deal with AI startup
Covariant, hiring its founders and licensing its
models that help robots handle a wider range of
physical objects.
Of course, this brings up the big question, could
Amazon one day replace all warehouse workers if AI
helps robots get too capable?
There's kind of a balancing act for Amazon.
How can they implement automation to improve
efficiency and manage labor expenses?
But how can they do it in a way that complements their
use of humans and doesn't replace them?
Amazon says the robots work with people and they're
creating new roles.
We're investing over $1.2 billion to upskill more than
300,000 employees by end of next year.
One study found that each robot adopted in
manufacturing replaced about three workers.
Other research shows that companies that deploy more
robots add more jobs overall.
So someone needs to maintain this if it breaks down.
Or if something does get dropped on the dance floor,
we have a process and special training to go clean that
up. And so each of those creates new categories of
jobs, some of which have higher earnings potential as
well.
The truth is, at the end of the day, Amazon's
responsibility is not to employ, you know, kind of a
million Americans, even though it does.
Their responsibility is to their shareholders.
Another big way to please shareholders is to cut down
on the huge amount of time and money it takes to get
inventory from sellers to customers.
To do this, amazon has always used algorithms to
predict how much of what inventory is needed, when
and where.
Every product has like a regional nuance.
We recently regionalized our entire national network.
And by doing a regional network, that means that
products are more likely to ship from fulfillment
centers close to you.
What's new with generative AI is the ability to predict
where to place brand new items.
So we're able to use generative AI to create a link
between products we have seen before, where we do have
a sales history, and a new product we haven't seen
before yet, and get it in the right place the first
time. So when we place a product in the right place
ahead of time before you click buy, it's traveling
less distance, which is a win for speed and
sustainability.
Amazon also says AI is helping sustainability with a
specific model that makes better choices about which
packaging to use, and by reducing the number of
damaged items that get sent to and returned by
customers. Amazon says its AI is three times better
than humans at identifying damaged products.
We ship billions of packages.
We have the data about those packages.
So we're able to use computer vision together with
generative AI and that vast product and package data,
to then detect damages and being able to sideline a
package if we think it might be damaged before we ship
it to a customer.
But training and running AI is itself a carbon
intensive process, a fact that could make it hard for
Amazon to achieve its 2019 climate pledge to reach net
zero carbon by 2040.
By 2027, AI servers are projected to use up as much
power every year as a small country.
And Amazon Web Services has data centers filled with
servers running AI workloads, although this also gives
it an edge over other e-commerce players because it
can train its AI in-house.
Amazon has also invested $4 billion in AI startup
anthropic, which makes chatbot Claude a competitor to
OpenAI's ChatGPT.
And Amazon makes its own AI-focused microchips and its
own generative AI tools for developers, which are used
in operations.
We use tools like Amazon Q, Amazon Bedrock.
That allows us to evaluate different models against
the, you know, what does good look like?
So what are the metrics for success of this business
application?
One big metric for success that shareholders are
watching: if Amazon's huge investment in AI will
translate to profits.
I have yet to see huge lift in anybody's retail
business due to generative AI, including Amazon.
I think that a lot of their biggest impact has
happened because of the earlier investments, not
necessarily some of these more recent investments.
I've seen a lot of hype, but no actual numbers.
One area Amazon is hoping AI will translate to true
savings is the most expensive part of the delivery
process. Getting that package the last mile to your
door. Amazon is now using more than 20 machine
learning models to figure out the most efficient
routes for its delivery drivers.
If there is more congestion on a road or if a road is
closed, AI is able to help us determine whether that
diversion is still there or take that different route.
In 2021, CNBC talked to Amazon drivers about the
pressures and pitfalls of the job, from dog bites to
urinating in bottles to save time.
People are running through stop signs, running through
yellow lights. Everybody I knew was buckling their
seat belt behind their backs, because the time it took
just to buckle your seat belt, unbuckle your seat belt
every time, was enough time to get you behind
schedule.
The hope is, with better routes and vehicle
coordination, drivers will feel less pressure to cut
corners or skip breaks.
It should enhance the driver experience, but it will
still be challenging.
In 2022, Amazon also rolled out new fully electric
Rivian vans and now has 15,000 of them across the U.S.
They're equipped with large screens where the new
mapping and routing is displayed, as well as
AI-enabled cameras that watch the road, sides of the
vehicle and the driver.
There's no camera recording if the driver is not
driving and there's a privacy mode.
Another area where privacy often comes up is around the
huge amount of data it collects on shopping behavior.
Now, with generative AI, that data can be used to
generate better hyper-personalized product
recommendations to a shopper, thanks to new developer
tools like Amazon Personalize.
What do you say to people when they're concerned about
their privacy? Or that it feels creepy that Amazon
predicts their shopping behavior so closely?
Well, we're looking at aggregate sales history.
We're looking at geographic regions and their
behavior. If a particular customer were in San
Francisco, it's not about that one customer.
It's about what the aggregate behavior in that area
is.
Sellers can also use gen AI to write more targeted
product listings, or to generate images of their
products in different seasonal and lifestyle settings.
For shoppers, last year Amazon.com started populating
with AI generated review highlights.
Any product that you look at is going to have reviews,
hundreds or even thousands.
What I love about AI review summarization is it gives
you just a couple of quick bullet points, and so
that's helping me make a more informed buying
decision.
And in February, Amazon launched a new gen AI powered
conversational shopping assistant called Rufus, to
further streamline those product recommendations.
Some consumers may be put off by product
recommendations that are based on their purchase
history. Now Amazon may have to, if they don't already
implement, an opt out, some sort of feature where a
consumer could say, you know, please don't look at my
purchase history when giving me recommendations.
Despite concerns, Amazon is committed to injecting
generative AI into every possible step of operations
to boost speed, efficiency and eventually, it hopes,
its bottom line.
If you can reduce packaging, is that a good thing?
Yes. If you can reduce the amount of time and the
amount of miles you have to travel to get from point A
to point B, is that a good thing?
Yes. These are all good ideas, you know, kind of
definitely feel free to show us the receipts at any
time.
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