How Commercial Drones Will Optimize the Supply Chain

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How Commercial Drones Will Optimize the Supply Chain

Since earliest antiquity, raw materials extraction, finished goods manufacture, and product consumption have seldom been co-located.  That means that delivery has been a major function of the economy—and human progress has depended on the evolution of succeeding technologies, from the camel caravan to modern package delivery services like FedEx. 

The deployment phase of the Fifth Techno- Economic Revolution will trigger another quantum leap in productivity by applying ubiquitous computing, networks, and robotics to further optimize the supply chain.  One of the biggest opportunities will come via commercial drones, broadly defined as “unmanned vehicles used for business purposes.”  These not only include flying vehicles, ranging from toys to military weapons, but a wide range of carts, delivery trucks, warehouse vehicles, and cargo ships.

As such, drones have the potential to revolutionize supply chain management and logistics, a notion not lost on retail behemoths Amazon and Walmart.  These firms have already taken the first step, by conducting trials of warehouse and home delivery projects over at least the past two years.

One harbinger of drone strategy’s future is illustrated by Amazon announcing a partnership with the British government to run real-world tests to explore the feasibility of using drones to deliver small parcels in the UK.1  The implications of this are very significant, given that 90 percent of Amazon’s sales involve products weighing less than five pounds.  In the U.S., 7-Eleven has already made its first commercial delivery by drone, demonstrating that drone deliveries are far more than just a pipe dream.

From a technology perspective, the capabilities of drones are improving day by day—advancements in autonomous piloting, “sense and respond” technologies, and increased battery life mean that delivery drones are now racing closer to becoming a reality.  As previously reported in Trends, the kind of small parcel air delivery envisioned by Amazon is actually far less costly than conventional same-day delivery services now offered in major metropolitan areas.2

However, a lot of preparation is still needed before drone delivery in everyday supply chains becomes feasible.  Before drones can be fully commercialized, we will need concrete legislation that outlines parameters of how they can be used...

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