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Drones in Supply Chain: Are They Advantageous or Troublesome?

Anusree Bhattacharya | December 10, 2021

Suppy Chain Blog
Drones may be troublesome at some points in the supply chain. It can cause many hurdles and safety hazards. But what about the vast potential that drones carry to assist and even improve safety?

The topic of discussion in this blog revolves around drones in the supply chain. Are these advantageous or troublesome? The blog showcases both sides of the coin.

According to the global commercial drone market’s study, drones are expected to witness growth of 26%. It is going to reach a value of $10,738m by 2022. Aren’t these figures impressive?

While the pandemic has forced industries and businesses to increase touch-less mechanisms, the increasing demand for contactless deliveries has given drones a wide-ranging opportunity to be reliable. Did you know that over twenty thousand drones are registered for commercial use with the Federal Aviation Administration (FAA) today? Many of which are already being used in the supply chain process.

A study by MarketsandMarkets indicates the drone package delivery market might surge from $528 million in 2020 to $39 billion in 2030 at a rate of 53.8%. Similarly, Gartner estimates that drone delivery will reduce delivery costs by 70%.

These show a promising future for drone technology to hover industries and would significantly affect customers across the globe.


How Exactly are Drones Changing Supply Chain Processes?

Automation is becoming a comprehensive solution in the distribution industry. A report by the Brookings Institute mentions that over 70% of jobs may be automated. In that case, drone technology is the main focus today.

On the other hand, some view automation as a threat. But with the help of automation, drones would make manual jobs redundant and destroy industries like aviation, transportation, production, and others involved throughout the global supply chain. However, several defenders of automation note that drone technology rarely replaces manual work. Instead, it tends to free up workers from a challenging workforce, reduces workloads and increases efficiency. As a result of this, companies become more productive.

In the realm of the supply chain process, drones offer the chance to completely change inventory management ways and shipping methods. And thus, companies can operate quicker and errorless management.
 

“As drones prove to be the next automation technology within the supply chain, businesses globally would do well. But to incur drone technology to their operations, they need to start investigating strategies to see if they would suitable their business model. My advice is to start looking for help from experts to understand the technological challenges, facts, and boundaries of using drones as part of your supply chain processes before going all-in too quickly.”

- Trish Young’s, UK Head of Business Consulting – Retail, Consumer Goods, Travel & Hospitality at Cognizant.

Let’s get into the advantages of drones that supply chain companies and industries are already reaping.


Advantages of Drones


Monitoring Supply Chain Delivery Courses
Drones in the supply chain assist in monitoring supply chain courses for barriers. Therefore, it could positively impact the entire delivery process via transport carriers . In addition, drones are used for monitoring road conditions and other hazards in the delivery process. In this way, a delivery operator can quickly select an alternative shipping process and make efforts to achieve a faster or on-time delivery.

Drones in Warehouses
Drones in warehouses can be used for inventory counting, improving safety before the supply process starts. Warehouses are full of products kept for supply or shipping to different locations via different modes of transport. In this case, using drones, the scanning of products and data will be faster by having barcodes. In addition, as drones are much safer, they eliminate the need for workers to scale up monitoring and thus save time. Here are some other ways drones can help warehouses in:
  • Providing better accuracy
  • Reducing human labor costs
  • Reducing workplace injuries
  • Streamline inventory tasks


Realistic Applications for Drones in Supply Chain


Skyward

Skyward is involved in developing the digital airspace infrastructure around industrial drones. In addition, the company is working on designing software for drones that will assist in the supply chain industries.

“I can tell you this from an engineering background that it is now possible to deliver goods using drones under five pounds, which is 86 percent of Amazon’s inventory, within a 30-minute of radius,”

- Jonathan Evans, the CEO of Skyward

Drones in the supply chain in demand due to its capabilities. Skyward determines the practical application of this technology and develops it for future purposes.


Amazon

Amazon’s Prime Air is a new drone technology-driven pilot program. Amazon is currently focusing on smaller packages under the 5lb range under its supply chain process. Amazon drone delivery is one of the most innovative services, and other companies are getting inspired to develop their drone-enabled supply chain program.


Walmart

Walmart is also taking the approach and reaping the advantages of drones. However, it is going miles apart in terms of using the technology for its supply chain process. Walmart has partnered with some prominent drone companies like Flytrex and Zipline. Flytrex and Zipline are currently doing pilot programs for supply chains and deliveries.


The Obstacles

As drone technology has already taken to the skies and is already operational, it is yet to be seen how quickly regulatory agencies allow the technology to operate without legal restrictions. More than one million drones are ready to take to the skies by 2022. But hurdles like safety risks, privacy issues, and security interference cannot be ignored. In addition, the military and commercial aircraft industry is posing valid concerns about sharing airspace and air interference. There are challenges like the susceptibility to hacking or theft, collision, and high insurance costs that have become a hurdle regarding drones in the supply chain process.

Further, the technology has many limitations that need to be highlighted. Limitations like limited battery life might restrict the operational duration. In addition, weather conditions also need to be taken into consideration. Whether drones can operate during high winds or rains. All these factors might impact supply chain management and may restrict the use of drones further.

However, the role of drones by supply chain companies is only going to ascend in the future. R&D companies are working hard to overcome significant challenges. They are working to provide more and more opportunities above all obstacles to optimize supply chain operations efficiently.


Frequently Asked Questions


How can drones be used efficiently in the supply chain?

Drones in the supply chain can be used efficiently to deliver at a low rate to rural areas. Also, it can eliminate the need for road transportation to save time, be more secure and faster.


How will drones impact the supply chain?

Drones in the supply chain will have a massive impact. Drones will improve service scenarios in industries and reduce costs, workforce, and capital. It can be helpful to manage and monitor inventory set up for products.


What kinds of jobs can drones replace?

Drones can replace five kinds of jobs. They are:
  • Capturing difficult footage
  • Enabling detailed monitoring
  • Spotting errors and implementing an error-free workflow
  • Assimilating huge data records

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