Beyond toys and troops: the potential role of drones in the warehouse
With their ability to be “eyes in the sky,” drones can help automate many repetitive, time-consuming, and potentially dangerous activities in the warehouse.
Drones have captivated our imagination in various ways, from being recreational toys to military weapons. Meanwhile, prominent corporations like Amazon and Walmart are already experimenting with using drones to deliver products to customers. However, their potential goes far beyond these realms, as they have also found invaluable applications in the dynamic and demanding environment of the modern warehouse. Through the integration of cutting-edge sensors, high-resolution cameras, and advanced processing equipment, drones are proving to be essential allies in the quest for increased efficiency and enhanced productivity within warehouse operations.
Drones and the modern warehouse
What unifies all warehouses is their shared characteristics of being vast, bustling, and frequently crowded. Today’s warehouses are bigger and more complex than ever. As the demand for e-commerce products skyrockets, the average size of a warehouse has ballooned to accommodate consumer preferences. The typical warehouse is around 50,000 square feet, with some extending to as big as 4 million square feet. Warehouses have grown up as well as out. Some have implemented mezzanines that use their vertical space, and others have narrow aisles to maximize shelving.
Given this busy and complex environment, there may initially be some concern about using drones in the warehouse. After all, we’ve all seen toy drones that end up in a neighbor’s tree. So, will warehouse drones get lost in the storage racks or, worse, crash into workers below? Ideally not. Like autonomous mobile vehicles (AMVs), these more sophisticated drones are equipped with navigation technology that allows the unit to avoid obstacles. These small, but mighty machines are capable of autonomous navigation, allowing them to move efficiently within a warehouse without the need for constant human intervention. Drones can also save time by quickly flying across a large warehouse or up to hard-to-reach spaces to find specific products. In this way, they can reduce the amount of time employees spend walking across a warehouse floor or searching for items. Humans no longer would have to climb tall ladders to inspect products and risk injuries. Instead, they can stay safely on the ground and review data collected by a drone. Furthermore, drones can be equipped with sophisticated sensors, cameras, and readers to detect RFID tags and barcodes as well as temperature, possible safety concerns, and any unusual activity. In addition, software algorithms can be used to deliver the insights that make these solutions useful for businesses.
Four use cases
As a result of this level of sophistication, there are many compelling use cases for drones in the warehouse. Below are four main ways drones are already being used to support the warehouse industry.
1. Inventory management:Proper inventory management is critical in the warehouse industry. It is the process of accounting for, ordering, and organizing product stocks to ensure items on hand are in good shape (that is, not damaged or expired) and of sufficient quantity to fulfill anticipated needs. However, manual inventory control can be prone to human error and costly in terms of labor and potential mistakes.
Instead of having workers go around the warehouse counting items and scanning barcodes by hand, drones can perform stocktaking, inventory audits, and cycle counting more efficiently and more accurately. Equipped with an RFID scanner, a drone is capable of wirelessly reading the information on the RFID tags attached to warehouse inventory. This allows drones to count, record, and relay RFID data en masse. Drones can confirm the correct items are where they should be, keep track of stock levels, and search for items that are listed as out of stock or missing.
Drones can also be used for item searches. Searching for products during the picking process is one of the most time-consuming and costly activities in a warehouse. A drone camera can perform these searches seamlessly and report back to human workers.
2. Inspections: Any business environment that gets constant use, such as a warehouse, will also be prone to frequent wear and tear. A broken shelf, dislocated stair rail, or cracked flooring can create a serious safety hazard. A damaged piece of equipment can stall operations and cost the company time and money.
Traditionally, detailed inspections in the warehouse would be done in person, with a manager walking through the aisles examining key equipment, racks, floors, walls, and ceilings. Drones can automate and speed up the inspection process. For example, a drone can fly through the warehouse to capture visual data for managers to review later. Even better, artificial intelligence (AI) solutions can take an initial pass at that data and identify potential areas of concern in real time. In this way, drones can alert management of serious safety hazards, helping them to avoid machinery breakdowns or serious accidents on the warehouse floor while also freeing them up to perform more value-added activities.
3. Indoor intralogistics: Warehouses are busy facilities where smaller items are constantly being moved and relocated from one area to another. Drones can assist with these intralogistics tasks. Even though most drones are used for tracking inventory and are only equipped with a camera, some drones can include mechanical grippers (similar to robotic arms), magnetic grippers, vacuum systems, claw or clamp mechanisms, or a payload release system. As drone technology continues to evolve, human workers will still need to load and assist products onto drones, but once the item is loaded, a drone can fly autonomously through a warehouse without the need for human navigation. For example, a drone can transport a machine part to the area of the warehouse where a repair is taking place. Drones can also move small products for fulfillment activities. To be sure, the gripping, payload, and navigation capabilities of today’s drones remain limited, but these applications are certain to expand in the future.
4. Surveillance and security:As mentioned earlier, warehouses can be massive buildings. Many of them are full of expensive equipment and products, making them attractive targets for thieves. Having security measures in place is essential. Fortunately, drones can fly through a warehouse 24/7 and provide a live feed for security staff to watch from a central location. Alternatively, AI-enabled software can analyze the video footage produced by a drone to alert owners of any unusual activity.
Leveraging the power of drones
The field of warehousing offers significant potential for the integration of new technological solutions, which can enhance efficiency and provide a competitive edge to businesses. The implementation of drone technology in warehouses offers several key benefits. Not only can drones perform repetitive, time-consuming tasks, like inventory counting and inspections, faster and more accurately than humans, they also can take dangerous tasks off workers’ shoulders. Instead of having employees conduct inspections in potentially dangerous areas, drones can be used. Drones also can be used to reach products on high shelves, so workers don’t have to make the climb.
By leveraging the power of these aerial devices and other automation tools, warehouses can optimize processes across multiple facets of operations, ultimately elevating their overall performance and results.
Ron Marotta of Yusen Logistics listens to Rick DiMaio of Ace Hardware talk about the steps Ace is taking to keep its store stocked after Hurricane Helene and during the East and Gulf Coast Port Strike.
The East and Gulf Coast port strike was the top discussion point during a panel discussion of shippers and logistics providers at the Council of Supply Chain Management Professionals (CSCMP) annual EDGE Conference this morning. The session, which was supposed to be focused on providing an update to CSCMP’s “2024 State of Logistics Report,” quickly shifted to addressing the effect that the strike by nearly 50,000 dockworker at 36 ports in the Eastern half of the U.S. could have on supply chains.
“The seriousness of this action cannot to be taken lightly,” said Ron Marotta, vice president of the freight forwarder and supply chain service provider Yusen Logistics (America). “It has not happened since 1977. Our lives depend on sustaining a smooth global supply chain.”
Marotta warned that for every day that the ports were not open, it would take four to five days to recover from the impact. One added concern is how the port closures would affect recovery efforts for Hurricane Helene. “There’s a huge amount of item that would normally be replenished by importers and retailers,” Marotta said.
Rick DiMaio, executive vice president and chief supply chain officer, for Ace Hardware Corp., commented that the hardware retail cooperative was doing okay for now keeping stores in stock, although he did expect the company would be “chasing generators for awhile.” “But in this recovery phase [from the hurricane], we certainly don’t need a strike right now,” he said.
The port closure will also have a knock-on effect on other transportation modes. For example, Andy Moses, senior vice president of sales and solutions for logistics services provider Penske Logistics, expects to see some companies turn to air freight as a result of the strike. This will, in turn, cause air freight capacity to tighten up and rates to rise. Furthermore, the longer the ports are closed, the more likely inflation is to rise again, according to Moses.
Nor will the effects of the strike stop at the U.S. border, according to Marotta. Many Caribbean Island nations depend on food import from the U.S. that move through East Coast ports. Additionally, some medical supplies typically are exported through the ports to Europe.
On a positive note, however, many companies took actions earlier in the year to prepare themselves for a potential strike. Ammie McAsey, senior vice president of customer distribution experience for the pharmaceutical distributor McKesson, said the pharmaceutical industry has brought in enough extra inventory that there will not be a short-term impact on the U.S. health care system due to the strike.
Government intervention?
Marotta hopes that the U.S. government takes the step of invoking the Taft-Hartley Act to stop the strike and send the International Longshoremen’s Association (ILA) and the port management group, United States Maritime Alliance (USMX) back to the negotiation table. In 2002, for example, President George W. Bush used the Taft-Hartley Act to end an 11-day lockout of union workers at West Coast ports. President Joe Biden, however, told reporters on Sunday that he would not do this.
“I hope that cooler heads prevail and that the executive branch realizes that it’s not just a labor issue, it’s also a humanitarian issue,” Marotta said.
Confronted with the closed ports, most companies can either route their imports to standard East Coast destinations and wait for the strike to clear, or else re-route those containers to West Coast sites, incurring a three week delay for extra sailing time plus another week required to truck those goods back east, Ron said in an interview at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
However, Uber Freight says its latest platform updates offer a series of mitigation options, including alternative routings, pre-booked allocation and volume during peak season, and providing daily visibility reports on shipments impacted by routings via U.S. east and gulf coast ports. And Ron said the company can also leverage its pool of some 2.3 million truck drivers who have downloaded its smartphone app, targeting them with freight hauling opportunities in the affected regions by pricing those loads “appropriately” through its surge-pricing model.
“If this [strike] continues a month, we will see severe disruptions,” Ron said. “So we can offer them alternatives. We say, if one door is closed, we can open another door? But even with that, there are no magic solutions.”
Turning around a failing warehouse operation demands a similar methodology to how emergency room doctors triage troubled patients at the hospital, a speaker said today in a session at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
There are many reasons that a warehouse might start to miss its targets, such as a sudden volume increase or a new IT system implementation gone wrong, said Adri McCaskill, general manager for iPlan’s Warehouse Management business unit. But whatever the cause, the basic rescue strategy is the same: “Just like medicine, you do triage,” she said. “The most life-threatening problem we try to solve first. And only then, once we’ve stopped the bleeding, we can move on.”
In McCaskill’s comparison, just as a doctor might have to break some ribs through energetic CPR to get a patient’s heart beating again, a failing warehouse might need to recover by “breaking some ribs” in a business sense, such as making management changes or stock write-downs.
Once the business has made some stopgap solutions to “stop the bleeding,” it can proceed to a disciplined recovery, she said. And to reach their final goal, managers can use the classic tools of people, process, and technology to improve what she called the three most important key performance indicators (KPIs): on time in full (OTIF), inventory accuracy, and staff turnover.
CSCMP EDGE attendees gathered Tuesday afternoon for an update and outlook on the truckload (TL) market, which is on the upswing following the longest down cycle in recorded history. Kevin Adamik of RXO (formerly Coyote Logistics), offered an overview of truckload market cycles, highlighting major trends from the recent freight recession and providing an update on where the TL cycle is now.
EDGE 2024, sponsored by the Council of Supply Chain Management Professionals (CSCMP), is taking place this week in Nashville.
Citing data from the Coyote Curve index (which measures year-over-year changes in spot market rates) and other sources, Adamik outlined the dynamics of the TL market. He explained that the last cycle—which lasted from about 2019 to 2024—was longer than the typical three to four-year market cycle, marked by volatile conditions spurred by the Covid-19 pandemic. That cycle is behind us now, he said, adding that the market has reached equilibrium and is headed toward an inflationary environment.
Adamik also told attendees that he expects the new TL cycle to be marked by far less volatility, with a return to more typical conditions. And he offered a slate of supply and demand trends to note as the industry moves into the new cycle.
Supply trends include:
Carrier operating authorities are declining;
Employment in the trucking industry is declining;
Private fleets have expanded, but the expansion has stopped;
Truckload orders are falling.
Demand trends include:
Consumer spending is stable, but is still more service-centric and less goods-intensive;
After a steep decline, imports are on the rise;
Freight volumes have been sluggish but are showing signs of life.
CSCMP EDGE runs through Wednesday, October 2, at Nashville’s Gaylord Opryland Hotel & Resort.
The relationship between shippers and third-party logistics services providers (3PLs) is at the core of successful supply chain management—so getting that relationship right is vital. A panel of industry experts from both sides of the aisle weighed in on what it takes to create strong 3PL/shipper partnerships on day two of the CSCMP EDGE conference, being held this week in Nashville.
Trust, empathy, and transparency ranked high on the list of key elements required for success in all aspects of the partnership, but there are some specifics for each step of the journey. The panel recommended a handful of actions that should take place early on, including:
Establish relationships.
For 3PLs, understand and get to the heart of the shipper’s data.
Also for 3PLs: Understand the shipper’s reason for outsourcing to a 3PL, along with the shipper’s ultimate goals.
Understand company cultures and be sure they align.
Nurture long-term relationships with good communication.
For shippers, be transparent so that the 3PL fully understands your business.
And there are also some “non-negotiables” when it comes to managing the relationship:
3PLs must demonstrate their commitment to engaging with the shipper’s personnel.
3PLs must also demonstrate their commitment to process discipline, continuous improvement, and innovation.
Shippers should ensure that they understand the 3PL’s demonstrated implementation capabilities—ask to visit established clients.
Trust—which takes longer to establish than both sides may expect.
EDGE 2024 is sponsored by the Council of Supply Chain Management Professionals (CSCMP) and runs through Wednesday, October 2, at the Gaylord Opryland Resort & Convention Center in Nashville.