How drones will impact the supply chain for businesses is a common question in the techno-business world. As technology is getting smarter and broader in its application, methods of doing business are also changing. There was a time when the supply chain was done mostly manually, which was not only time-consuming but also the margin of error greater.
But, with the invention of drones, the supply chain is also adopting this technology. Companies want to save time to reduce the cost of production hence increasing revenue.
What Is Supply Chain:
As defined by Investopedia, it is the network between the company and its supplier to produce and distribute a specific product to the final buyer.
Components Of The Supply Chain:
8 Return Of The Goods
Impact Of The Drones On Supply Chain Components:
Planning is a basic step in supply chain management. Before the start of the supply chain cycle, companies tend to plan the details of demand and supply, costing, profit margin, and manpower for products or services. The use of drones in supply chain management can be pondered over in this step.
The information is the core step in every cycle, not just supply chain management. Dissemination of timely information about the demand and supply, market trends are essential for a business to remain alive. In this era of viral diseases like COViD-19, minimum interaction between humans are desirable. So the use of drones in the industry can achieve that objective.
Source suppliers play a critical role in the supply chain, if they don’t deliver the desired raw material in time, companies would not survive. However, if the supplier is in the near vicinity the drones can be used for sourcing.
Inventory the companies retain the optimum amount of stock in their warehouses, to prevent stock-outs or delays in production. The drones can be used in warehouses to move inventory from one place to another. They can reach to a difficult area or corner in the warehouses where normal machines can’t reach.
Production in the production area of a factory, the different assembly line is operated. Sometimes they get stuck too and cause time wastage for a company. However, assembly lines can be replaced by drones in the production area. Production will not get stopped and more units can be completed and passed on to the next phase.
Location or Storage goods leave the production plant for a storage area or a warehouse. In the storage area units are piled up sequentially. Drones can be helpful to move goods in the warehouse. They can also be used to sequence the stock and the inventory count.
Transportation is the most crucial step in the supply chain. Companies are dependent on transportation from start to end. Raw materials need to be transported from the supplier to the warehouse, from the warehouse to the production area, and from production area finished goods need to be delivered to the storage and finally to the customers.
The use of drones in transportation can save time as well as money for industries. Not only this but multiple other jobs will also be created for drone pilots drone technicians to drone maintainers.
Use of Drones By Transportation Companies for A Supply Chain:
Courier companies like FedEx and UPS can utilize a drone to check the transportation routes for a supply chain and also monitor the traffic. This way they can optimize the transportation of the goods and benefit the customers and suppliers.
Imagine a world where you order anything online, and the drone knocks on your door to deliver your order within a minimum amount of time. Transportation companies like DHL and online giants like Amazon and Google and flexing their muscles to do that.
Hurdles For Drones Use In A Supply Chain:
The use of drones in a supply chain will depend upon the countries’ pace to adopt the technology. How quickly the regulatory agencies allow this tech to flourish is another hurdle in its way. According to a business insider, as many as 1.6 million drones will be in the skies by 2021. This poses a multi-dimensional threat to privacy and security, risk of interference with other aircraft of military or private domains.
Due to these hurdles, regulatory bodies are preventing this supply chain management from widespread commercial application
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FAA Rules For Drones (updated 2020)