January 10, 2017      

Unmanned aerial vehicles are becoming increasingly popular for commercial use as well as recreational use. Due to their popularity and assumed flexibility, supply chain businesses have begun to consider using drones in warehouses. In fact, a Frost and Sullivan report (download PDF) states that drones are one of the few radical technologies that industry participants will cautiously adopt over the next 15 years.

Even though warehouse and distribution facilities have begun looking for ways to incorporate drones into their operations to be more efficient, industry leaders have expressed concerns about how drones can be used.

In October 2016, U.S. Department of Transportation Secretary Anthony Foxx announced a new advisory committee on autonomous vehicles. This committee’s mission is to develop recommendations for how this technology can transform the way we move people and goods on roads, railroads, and in airspace.

With drone deliveries — both within warehouses and to consumers — on the horizon, the question is, will UAVs really take off and become a new operational win for distribution? Or will they hit turbulence on their way to adoption and crash short of success?

Business Takeaways:

  • The supply chain industry is considering the use of aerial drones in warehouses to move parcels. While Amazon.com is looking at the last mile, Walmart is testing UAVs inside its facilities.
  • The FAA rules released last summer were seen as too strict by many observers, but the industry is lobbying to change them and is hoping for more drone testing.
  • For many order-fulfillment operations, proven ground-based robots may satisfy their efficiency needs better than still-developing UAVs.

Early adopters light the way

The testing of drones in warehouses has already begun and is being led by two retail and consumer-goods giants. Amazon.com Inc. launched its own drone program, Prime Air, to focus on the last mile and speed up its already fast delivery process.

With Prime Air, Amazon Prime members could receive packages in 30 minutes or less because of drones. The online retailer has stated that Prime Air has a great potential to enhance the services it already provides to millions of customers.

Amazon Prime Air UAV in testing

In addition, Amazon has claimed that its rapid airborne parcel delivery will increase the overall safety and efficiency of the transportation system.

By contrast, Wal-Mart Stores Inc. is testing the internal use of drones in warehouses. Walmart has tested image capture by drones in warehouses — up to 30 pictures per second — and can mark missing items in real time.

Walmart reported to Reuters that its drones can check a full warehouse inventory in about a day. That process previously took up to a full month to do manually.

Not only have these early adopters discovered new ways to test and apply drone technology, but they have also learned the drones’ limitations firsthand.

Uncovering limitations of drones in warehouses

Although the industry is buzzing with the talk of drone use, and many companies are eager to jump on the latest tech bandwagon, it’s important to look at the limitations prior to jumping on completely. Drones must overcome a number of limitations, such as safety, payload capacity restrictions, and political acceptance, before they will reach a high level of adoption.

Safety is the No. 1 concern. As with recreational use, commercial UAVs are under strict review to ensure that they will not put people in harm’s way.

In June, after a significant amount of pressure from manufacturers and political figures, the Federal Aviation Administration published final operational rules for the commercial use of small drones, those weighing less than 55 pounds.

The rules turned out to be stricter than many had hoped, requiring pilots to be certified and within eyesight of the drone at all times. Pilots also can’t be in a moving vehicle and will have to be vetted by the Transportation Security Administration (TSA). Among other restrictions, the drones can only fly at a maximum altitude of 400 feet.

To gain political acceptance, drones must be tested in real-life scenarios and proven to be safe to operate in busy, public areas and in warehouses.

More on Commercial Drones and Logistics Automation:

Sticking with traditional automation

Cimcorp layer pick setup

Cimcorp believes that proven automation is better for the supply chain industry than adoption of drones in warehouses.

While drones are still trying to gain acceptance in the industry, distributors can rely on the use of traditional automation to achieve significant results and have a high return on investment (ROI).

  • Proven track record: Automation isn’t new to the space. For more than 50 years, supply chain automation has demonstrated its ability to improve order accuracy and traceability.
  • Rapid fulfillment: An automated solution enables distribution centers to have shorter lead times, which ultimately maximizes the shelf life of products. By combining the power of a gantry-based, automated storage and retrieval system (AS/RS) and order picking, customers and stores are able to receive their products faster than ever before.
  • Better resource allocation: Unlike the FAA’s rule that requires a drone pilot to be certified and within line of sight, an entirely automated system can be controlled by a warehouse management system (WMS). The WMS can control inventory under the gantry and has the flexibility to manage orders to meet and maintain just-in-time delivery schedules. Distribution center operators can save resources and reduce labor costs by implementing automation instead of hiring additional workers to operate drones.
  • More flexibility: With a robotic order-fulfillment system, warehouses can adapt easily to inventory and volume increases, seasonal fluctuations, and order structure changes, gaining a high degree of flexibility. Implementing an end-to-end system that can be designed to suit throughput empowers distributors to get more out of less.
  • More control: The appropriate use of technology will allow logistics businesses to know where inventory is located, gain fast access to that inventory, and achieve higher order-fulfillment rates. In addition, conventional warehouse automation can provide visibility into order-fulfillment progress in real time.

These are just a few reasons why manufacturers and retailers should rely on technology that has already been regulated and proven to have a high ROI, instead of adopting drones in warehouses while they are still new to the market.

Although it’s good to be a leader in innovation, early-stage adoption may often cause setbacks or damage a business. What happens when a new technology or application doesn’t work as planned? Sometimes, sticking to what we know works is the best option. As Bert Lance once said, “If it ain’t broke, don’t fix it.”