Did You Hear about Drones in Warehousing?
It will soon be a decade since academic researchers, technology startups and even some large companies first started experimenting with drones for indoor applications – particularly in the supply chain industry for use-cases such as locating and counting inventory in warehouses or container trucks in yards, and of course last-mile package delivery. The latter came into public attention around 2015-16 when Walmart & Amazon talked about their in-house drone programs, and their strategic intent to expand drone operations from proof-of-concept projects into worldwide deployments.
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Much water has flown under the bridge since – with far less traction than the tens of thousands (or even millions!) of drones that were projected to be flying outdoors, making deliveries. Unfortunately, this has resulted in some ‘doom and gloom’ articles that seek to extrapolate the failure of some high-profile drone startups into generic pessimism about the technology and its future. Reality is, of course, far more nuanced – public safety, wind turbine inspection, construction, agriculture and vaccine/medicine delivery are examples where autonomous drones have gained commercial traction.
Similarly, there is one segment of the supply chain industry that is starting to see true business value by deploying drones. Surprisingly, it is the indoor use-cases for UAVs that are gaining commercial traction – not the outdoor ones, as many expected. Regulation no doubt plays an important role in this adoption lifecycle, but so do hardware advances, automation software, operational considerations, and go-to-market strategies.
Recognizing these drones in warehousing opportunity, numerous companies have sought to pursue it – not only Silicon Valley startups and university spinoffs, but even those who were offering RFID, WMS or other solutions to the supply chain industry. Many have announced ongoing/successful proof-of-concept projects globally – working in partnership with one or more customers, who tend to be early adopters of warehouse automation in their respective industries.
3 Key Factors Drive the Success of Autonomous Drones in Warehousing
3 key factors drive the success of autonomous drones in Warehousing for inventory management in warehouses, distribution centers, fulfillment centers, air cargo facilities and even retail stores such as warehouse clubs. These are:
- The reliability, stability, scalability and affordability of drone hardware,
- The ability of software to enable fully autonomous indoor navigation and automatic scanning of barcodes, QR codes, alphanumeric labels, RFID tags, etc., and
- The operational, commercial and strategic fit between inventory drone solutions and the ground realities of warehouse inventory management.
Many commercial attempts at offering drone solutions for cycle counting inventory in large warehouses faltered due to the first factor. Given the technical challenges in flying drones in GPS-denied environments, vendors sought to build custom drones with a comprehensive (read: complex and expensive) mix of sensors to help navigate indoors. This, however, resulted in lack of stability, reliability, and scalability – not to mention ever-expanding R&D and testing budgets. The earliest adopters of drones in warehouses found that such solutions not only needed significant manual intervention but also were unviable commercially.
The lack of a sharp focus on the day-to-day challenges of inventory stakeholders, combined with the lack of stable navigation and reliable scanning, resulted in incomplete or abandoned PoC deployments. Worse, this made some of the early adopters in the warehousing and logistics industry skeptical of all unmanned aerial vehicle (UAV) technology. Even RFID, a once-promising technology, which at one point did seem relevant for aerial inventory counts, remains to be adopted at scale across the warehouse industry.
Fortunately, warehouse automation is seeing a steady adoption – thanks to the broader adoption of robots for fulfillment use-cases, driven by the increasing velocity of the global supply chain due to e-commerce — and a tight labor market. This is accompanied by a resurgence of drone-based inventory counts – the difference being that the latest solutions have addressed the first success factor i.e. they leverage off-the-shelf, cost-effective, reliable hardware that can be quickly scaled to large fleets of autonomous drones.
This has, in part, been driven by the rapid innovations in intelligent automation software i.e. software that enables multiple drones to fly autonomously, hover accurately and land precisely. Computer vision, AI/ML, high-quality video, cloud connectivity, robotics, auto-pilots, and numerous other technical capabilities underpin such world-class software, increasingly deployed using SaaS models.
Yet, there remain few public announcements of large-scale production deployments of autonomous drones in warehouses, DCs, and stores. This is where the third success factor comes in – matching the UAV technology with not only a use case like counting inventory stored in warehouse racks but diving much deeper into operational matters such as:
- How pallets, cartons, cases are stored on racks,
- Cycle counting frequency is driven by business strategy (eg. 3PLs vs. BCOs),
- How storage space gets optimized using narrow aisles and tall racks,
- Trade-offs of one-deep versus multi-deep configurations,
- Wide variety of barcode sizes, colors, fonts, alignments & conditions,
- Inventory turnover depending on facility type (eg. air cargo vs. durable goods),
- Hours available for inventory counts (eg. DCs vs. retail stores),
- Degree of autonomy for drone operations (flight, charging, scans, missions, etc.)
and many more.
This operational focus, when aligned with the overall strategic intent of warehouse automation, is what will finally drive and determine the success of drones in warehousing. A leading indicator of enterprise-wide drone deployments in warehouses is the migration of drone program leadership from R&D/innovation teams and digital transformation executives to the GMs of warehouse and VPs of operations & continuous improvement.
Yet another sign of technology maturity will be the involvement of ecosystem players such as supply chain consultants, large IT/ITES companies, WMS vendors, and drone-focused system integrators, in drone deployments.
Like any new technology, drones – specifically for industrial applications – went through their own hype cycle, during 2013-2018. They are now, though, emerging as commercially viable, certainly for indoor (and perhaps soon enough for outdoor) applications in the supply chain industry.
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