How Autonomous Vehicles and Drones are Changing the Supply ChainBy Steve Syverson Read Time: 7 min.
For many businesses, a supply chain that works all day and all night, moves efficiently, and is error-free may sound like a dream. New automation technology may eventually make that dream a reality.
In 2016, Pew Research released a study showing that 79 percent of Americans shop online. Meanwhile, 15 percent reported buying something online at least once a week. With major online retailers like Amazon battling conventional brick and mortar department stores, online shopping has become a popular new facet of modern reality.
However, products ordered online still need to be delivered in the real world. With the explosive popularity of online shopping, supply chains will need to adapt to handle this volume — and the problems that come with it. Autonomous delivery solutions are rising to meet some of these challenges.
How Exactly is Automation Changing the Supply Chain?
Automation is becoming a widespread solution in many different types of businesses. One report by the Brookings Institute estimates that anywhere between 15 and 80 percent of jobs may be automated, depending on the industry. In transportation and by extension, distribution industries, that number is well over 70 percent.
Some view automation as a technological specter. This “job killer” could decimate industries like transportation, production, and others involved throughout the global supply chain. However, defenders of automation in the workforce note that automation rarely kills jobs. Instead, it frees up workers to do different tasks, helps them work more efficiently and can make companies more productive. In the realm of supply chain logistics, automation has the chance to completely change the way we do inventory management and shipping. This, in turn, helps companies operate more quickly and with fewer mistakes.
Emerging Trends in Supply Chain Automation
Automation is likely to touch every facet of the supply chain, from the warehouse to the customer's front door. Businesses stand to benefit by performing a value chain analysis to determine where there's room for automation in their supply chain model. Here are some of the ways in which automation can be applied to the shipping industry:
For many products, warehouses are one of the final steps in the supply chain before goods reach consumers. Warehouses act like home bases for products, and moving them out of the warehouse quickly is key to speeding up the supply chain in many industries.
There's a lot of room for automation in warehouses. At the beginning of the fulfillment process, software can be used to match a product to a customer's order. As soon as that order comes in, it is added to an inventory control system. This helps ensure products enter the delivery queue more quickly and cuts down on informational mismatches due to human error.
Depending on how advanced the warehouse is, automation can also play a role in the physical movement of inventory and products. Robots can be used to pull items from shelves and sort them into shipping queues. This can help make fulfillment more efficient and cut down on errors in the warehouse.
Once products leave the warehouse, they frequently take to the roads and highways. Typically, these shipments are carried by human drivers who need to take breaks, sleep and could get lost on a new route.
Many self-driving cars and technologies associated with them are still in the testing phase right now. However, in a few years, it could be a reality that human drivers will share the roads with vehicles that drive themselves.
Although a lot of the press surrounding self-driving cars has focused on how they might change the life of the average person, automated vehicles may have an enormous impact on the shipping industry. Self-driving trucks can leave a warehouse at any time, drive all day and night, and get products to local distribution centers more quickly and with fewer issues.
Outdoors, drones are a topic of heated debate. There are questions about what sort of airspace they should occupy, complaints about drone noise, and new laws and regulations governing drone use.
However, in the warehouse, there's no danger of intersecting airspace and noise is just a part of the job. Drones can move quickly from one end of the warehouse to another, unhindered by high shelves, all while scanning products, moving lighter items, and checking inventory.
Drones aren't just useful in the warehouse. They may be at their most effective as a solution to the “last mile problem”.
What is the Last Mile Problem and How is Automation Helping?
For most businesses that work through a supply chain, the last mile of delivery is the most difficult. Here, the “last mile” represents moving a product from a local distribution center to a customer's home or desired delivery destination. It is in this stage that the efficiencies of a massive supply chain can start to fall away. Instead of moving hundreds of products across thousands of miles in a single truck on a single route, products are instead delivered one at a time, all across a particular area.
This last mile is also where critical errors can crop up and undermine efficiencies built-in at prior stages of the supply chain. Unlike a warehouse or a distribution center, there are no guarantees on when a customer will be available to accept a delivery. Many deliveries fail on the first attempt, delaying the time that it takes for the customer to receive their product, and forcing the distributor to store it for longer.
Theft also becomes a serious threat at this stage in the supply chain, with roughly 10 percent of customers reporting a stolen package in 2016.
Automation can help to make last mile logistics more efficient for businesses, more convenient for consumers, and safer for everyone.
Amazon's Flying Drones and Other Unique Solutions
Amazon has been a pioneer in shipping solutions. In 2013, the company announced its intention to launch Amazon Prime Air, an airborne delivery serviced facilitated by the then-emerging technology of drones.
In the years since that announcement, Prime Air is still yet to be deployed for consumer use. The project has likely run into a variety of hiccups, such as the legal conundrums of using drones for product delivery, or the sheer cost of deploying a massive fleet of these drones. However, as drone technology continues to develop and laws change to handle the nuances of their use, we can probably expect drones to play a big role in fulfilling the last mile of delivery.
Unlike a human (or even automated) driver, drones aren't burdened by road traffic. In addition, they don't have to stick to a standard 9 to 5 workday schedule, allowing drones to fly out with their cargo at a time that's convenient to the customer. They may even be able to deliver a package into a person's backyard. All of these measures may allow for drones to one day make the last mile more efficient and make package theft less likely.
How Automation is Creating New Challenges Within the Supply Chain
Automation may solve a lot of the problems and inefficiencies that exist within the supply chain once the bugs get ironed out. The reality is that automation technology — from warehouse robots to self-driving trucks to drones — is still very much in its infancy. Once it reaches its full potential, it could help to simultaneously speed up and smooth out the supply chain process at every level.
However, automation tech isn't functioning at full potential just yet. Robots aren't always able to maneuver through space as safely and efficiently as a human worker. A fully autonomous warehouse with today's technology could be a dangerous place, where errors and crashes abound. Likewise, self-driving vehicles aren't ready for prime-time, and drones still need a lot of legal approval and new technologies to ensure consumer safety.
Today, the problems that we face in the supply chain industry are closely tied to the steady adoption of automation into the processes. Workers in the supply chain need to be taught how to use and manage new technologies as they are deployed, helping to boost their own efficiency without turning the reins over to robots just yet.