Amazon Taps AI to Expand Sellers’ Ecosystem and Supply Chain Capabilities
Amazon is building out its supply chain services for sellers, offering merchants the ability to distribute products from its warehouses to physical stores and fulfillment centers.
The automated “Supply Chain” solution will leverage advanced machine learning capabilities to assist sellers in optimizing shipping and delivery. The move is intended to strengthen Amazon’s value chain foundations, expanding its logistics network beyond the confines of e-commerce and offering its sellers an end-to-end inventory management solution.
In addition to its existing seller services such as Amazon Warehousing and Distribution, the newly introduced Multi-Channel Distribution service encompasses a full suite of services designed to facilitate a more seamless movement of products from manufacturers to customers, regardless of the sales or distribution channels involved.
NEW SUPPLY CHAIN BY AMAZON SERVICES:
Amazon Global Logistics
Moving origin services closer to sellers’ factories will enable additional pick-up services for ocean products at key manufacturing hubs. The new service will offer all-inclusive pricing covering customs clearance, unloading, warehousing, storage, and local transportation to fulfillment centers.
Partnered Carrier Program
Offers domestic transportation services for products, enhancing supply chain efficiency, and lowering costs by up to 25%.
Multi-Channel Distribution
Enables sellers to move products from AWD to various sales channels, simplifying supply chain management, reducing costs, and leveraging Amazon's distribution network to optimize inventory levels.
Automatic Inventory Replenishment With FBA
An automatic inventory replenishment service that uses advanced machine learning and supply chain optimization to ensure products are stocked optimally for quicker delivery speeds and a boost in unit sales potential.
Amazon also said it will be using advanced AI to enhance product listing creation for sellers, simplifying the process and improving product descriptions, titles, and details, ultimately aiding customers in making informed purchase decisions.
“Our vision has always been to make it as easy as possible for sellers to serve customers around the world. With Amazon taking on even more of the supply chain and operational complexities on behalf of our selling partners, we are excited to help them save more money, drive more business growth, and have more time to continue inventing amazing products for customers,” said Dharmesh Mehta, Amazon’s vice president in charge of worldwide seller services.
Retailers Embrace Value Chain Transformation
Surveying the market more broadly, a number of retailers are recognizing the need to create a more holistic, end-to-end supply chain and fulfillment ecosystem.
Walmart has been channeling efforts in this area, automating its e-commerce fulfillment centers with a goal to densify inventory at the first mile, optimize the middle mile, and condense the last mile.
Similarly, Dollar General recently announced plans to implement a complete end-to-end transformation of its retail operating model – its first in nearly 20 years – which places its supply chain front and center.
For Amazon’s part, the tech giant has recently turned particular attention to scaling and optimizing its fulfillment capabilities. Recently, the company focused efforts on regionalization, transitioning its stores’ fulfillment and transportation network from one national network to eight separate regions serving smaller geographic areas. The company also expanded the number of smaller, same-day delivery facilities, which it plans to double.
The intention of the move was to reduce touches, keep a broad selection of products in each region, and deliver items to shoppers faster and more affordably.
As a result, the company has reduced the number of touches for a delivered package by 20% and shortened the miles traveled to deliver packages to customers by 19%. They’ve also increased the number of deliveries fulfilled within a region to 76%.
This article first appeared on the site of sister publication RIS.
