How Drones will (Re)Disrupt the Supply Chain!

Back in 2018, Drone technology was typically reserved for military application, emerging trend for different levels of surveillance and general consumer fun (taking youtube to another level). There was a lot of hype of this technology transforming the logistic Industry. Mainly around autonomous transportation. 3 years on, we are still hearing the how autonomous technology, drones, AI will revolutionise this sector but our sky’s are still empty and our roads are still clogged with drivers who think they are Michael Schumacher.

What has happened?

Well, in the last 18months, companies have really stagnated their investment into new technology. For most CIOs it is has been about keep the lights on and their people in jobs, rather than trying to be pioneering. However, I can see this changing and changing rapidly especially in area of supply chain.

Supply chain has taken a focal role of recent. Most APAC leader have stated their supply chains have been under increasing stresses in the last year. With the global recovery well under way, leaders are now more confident about global economic recovery compared to earlier this year.

As a result, Demand has increased, not just due to addition stimulus money being pushed into the consumer channels but also an increase in consumer spending confidence.

This has resulted in a huge inventory rebuilding cycling as during the peak of the pandemic company decided to deplete the stock they had.

Its not just a case of flicking the production switch on, bring supply back inline with demand. Even if that was possible, globally there is shortage of skilled labour force.

We can see how in Europe they are racing towards a driver shortage crisis of 150,000 unfilled jobs, according to new research from Transport Intelligence. This all results in extension to delivery lead times.

What are CIOs and heads of supply chain are doing about this? How does autonomous or drone technology help them?

We are seeing that the market for autonomous contact delivery is expected to reach into the billions by 2030. Global research and advisor firm Gartner estimates that drone delivery can reduce last mile delivery costs by 70 percent, but also add in less carbon emissions during the delivery process. Sustainability is now a big deciding factor in new technology adoption.

We are seeing some leading companies now actively competing for a solution within this supply chain space. Alphabet (Wing), Amazon (Prime Air), FedEx (Wing partnership), DHL (Parcelcopter), and UPS (Flight Forward) are all developing drone programs focused on last mile delivery.

They are hindered with legalisation on both direct and in direct line of sight drone services, direct to consumer. But a depot-to-depot service is less regulated and has the applicability for larger cargo carrying drones.

As we see the real-world impact on the supply chain and the reliance upon human labour impacting people and governments alike, history tells us that these hurdles are about to become smaller.

Already Abu Dhabi will use Drone Technology for Medical Supply Transfer for an instant delivery system. The first of its kind project in the Middle East and North Africa will use drones to deliver and transfer medical supplies between healthcare facilities in the Emirate. And this technology is a direct result of investment put to respond effectively to the COVID-19 pandemic.

Whilst beyond line-of-sight drone technology is facing its hurdle, we are seeing more autonomous usage of drones within controlled area. Every manual operation not only adds costs, but it also introduces performance anxiety, safety issues and ultimately the potential for unplanned additional time.

Whether it is self-driving Telsa trucks on our highways, orautonomous mobile robots operating through warehouse or fulfilments centres.The higher the automation and autonomy the greater the business value.

Companies such as NNTC are using drone to speed up the reporting of inventory availability both inside and outside of warehouse. Helping improve inbound and outbound operations by 65 percent.

Whilst there will always be a need for human operations, we are seeing drone technology paving the way for a fully automated and unmanned 24-7 supply chain. If the last 18months have taught us anything, under uncertainty, traditional approaches in certain circumstances can be downright dangerous.

Whilst the publicstill see drones as a novelty at events and shows instead of fireworks, I can see that drone technology will become more prevalent and more vital in our lives both either as consumer or leaders in our respective industry. Our thirst for on demand and immediate availability will drive more investment into scalable solutions. These Autonomous systems will become smarter and more connected. Like we people do, talking to each other, sharingdata, and read and react to changes in operational conditions.

Expect to see more stories on autonomous successes, the payback and business realisation period. Drone and autonomous technology will eventually change the face of how supply chain is perceived and operated within. Once the government and regulatory hurdles are overcome, we will see start to see tomorrow vision, today.