According to sources giant US online retailer Amazon has engaged scientists from the CSIRO, to help build an analytics profile of Australian consumers as well as a profile on transport systems in capital Cities.
ChannelNews has been told that a team from the CSIRO Data 61 group are currently working out of the US based headquarters of Amazon while other CSIRO scientists are working in Australia to develop information systems before they launch in Australia.
The project is being funded by Amazon.
The behaviour data engineering exercise, is set to play an important role when Amazon roles out their operation in Australia.
The CSIRO Data 61 team describes themselves as a team that ‘delivers novel methodologies and computational algorithms for data-driven modelling with a focus on the forecasting, prediction and extreme modelling’ of concepts.
The team has a proven record of achievement having recently worked on the remodelling of the NSW transport system.
Amazon is getting access to the CSIRO’s RiskLab data, that Data 61 claims provides the avenue for industry to engage directly with an extended network of technologists and academia to come up with innovative solutions and tools in quantitative risk while also allowing organisation like Amazon to make the right decisions based on years of Australian data collecting.
Risk Lab at CSIRO’s Data61 is described as a multi-disciplinary R&D centre for developing the latest methodologies and technologies in actuarial sciences, econometrics, applied math and statistics as well as financial mathematics.
ChannelNews understands that Amazon is working with CSIRO on what’s called “anticipatory shipping” as well as the building of an intelligence system for their logistics team.
Three years ago, Amazon, obtained a patent for an algorithm-based system, that could conceivably use their system to ship products before a consumer even place an order, the CSIRO is currently looking at retail data collected by the Australian Statistics Organisation with a view to delivering local intelligence for Amazon.
Amazon filed for the anticipatory patent, officially known as “method and system for anticipatory package shipping,” in 2012, and it was awarded it in 2013, they have been using the technology ever since.
The patent summary describes it as a method for shipping a package of one or more items “to the destination geographical area without completely specifying the delivery address at time of shipment,” with the final destination defined en route.
By predicting customers’ orders Amazon could increase sales and potentially reduce shipping, inventory and supply chain costs.
“Supply chain and logistics optimization is neither easy nor cheap, but it is the biggest opportunity for most companies to significantly reduce their cost and improve their performance.,” wrote H. Donald Ratliff, Ph.D., executive director of the Supply Chain and Logistics Institute.
Although Amazon can deliver shipment in 24 hours or earlier the company has acknowledged its disadvantage when compared to brick-and-mortar retailers.
The patent outlines all the benefits of electronic commerce, but adds one substantial disadvantage: “Often, customers can’t receive items immediately upon purchase, and instead must wait for the product to be shipped. Even though services like next-day air can mitigate this issue, they are cost-prohibitive; low-priced shipping alternatives can delay shipping by a week or more. These delays could dissuade customers from online purchases”.
Amazon’s system involves two computers, one that identifies the general shipping location and a second that waits for the delivery address to be finalized.
Hypothetically, if residents of Doncaster in Melbourne or Hobart in Tasmania buy a lot heaters in winter a local fulfillment centre might fill up with a collection of heaters— but none would be shipped until an actual order is received at Amazon’s home-based shipping system. When an order is placed, the item would already be halfway to its destination, cutting delivery time to as little as a few hours It could be even quicker, depending on the customer’s proximity to an Amazon distribution centre.
Anticipatory shipping is set to be part of Amazon’s day-to-day business practices in Australia.
Neither Amazon or CSIRO have been available to comment on the extent of the relationship between the two organisations.
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