Amid all the discussion and speculation about the possible use of drones to make deliveries to customers, it’s interesting to see other ways they may be used to improve supply chain performance. Earlier this month, for example, Walmart gave a demonstration of how it’s testing drones as a possible means to improve warehouse management.
Last fall, Walmart, the world’s largest retailer, applied to U.S. regulators for permission to test drones for home delivery, curbside pickup and checking warehouse inventories to possibly use them to fill and deliver on-line orders. Although Federal regulators are still considering rules for commercial operation of drones that would be involved in package delivery—seen as the next step for big retailers such as Walmart and Amazon—the company did receive approval for warehouse use.
The company is now testing the use of flying drones to manage inventory at its large warehouses, which supply thousands of Walmart stores throughout the U.S. During a media tour at a Walmart distribution center earlier this month, a drone moved up and down an aisle packed nearly to the ceiling with boxes, taking 30 images per second. A control tower oversees the images on a screen and sends alerts when items are out of stock or stocked incorrectly so workers can go fix the problem.
The current practice is for Walmart workers to stand on forklifts that move up and down the aisles to manually inspect labels and inventory by scanning pallets of goods with hand-held scanning devices. The drone’s methodical, vertical movements would essentially mimic the path of a person in a forklift, says Shekar Natarajan, Walmart’s vice president of Last Mile and Emerging Sciences, which focuses on drones, virtual reality and other technologies to identify how the technology may help the company improve its supply chain performance.
Natarajan said use of drones can dramatically quicken the current labor-intensive process of checking stock around the warehouse. Indeed, while the process takes a month to complete manually, the drones can catalog the warehouse’s inventory in one day.
If all goes well, the drones may be used in one or more of Walmart’s distribution centers in six to nine months, Natarajan says. However, he adds that Walmart is “still in early phases of testing and understanding how drones can be better used in different types of business functions.”
Determining how to best warehouse, transport and deliver goods to customers has taken on new importance for Walmart as it deals with rising wages while simultaneously facing pressure to grow—even as on-line competition from Amazon and others intensifies. To do so, Walmart has committed to spending $2.7 billion on labor, technology and other investments, including improving its website and e-commerce business. Tellingly though, while Walmart beat expectations last quarter with $115.9 billion in revenue, Doug McMillon, president and chief executive, acknowledged that the seven percent growth of Walmart’s e-commerce business was “too slow.”
The scope of Walmart’s operations is what makes the drone trial so interesting. The company uses 80 supercenters, in addition to its 190 distribution centers, to help fulfill on-line orders. Each distribution center in the U.S. services 100 to 150 stores. Given the sheer number of warehouses and inventory items, it’s understandable that Walmart is investigating new ways to apply technology to fulfill and deliver orders faster.
I am curious to learn how the use of drones in Walmart’s warehouses plays out. Are you?