Robotics and automation are rapidly changing every element of the supply chain, from how inventory is managed to how orders are fulfilled. One major change involves last-mile delivery, or delivering a product from a warehouse to the customer’s doorstep. A world where drones and autonomous vehicles deliver packages is not some far-fetched idea or something that’s years away; it’s part of our current supply chain reality.
While the application of autonomous vehicles (AVs) and drones for last-mile delivery is still new, these technologies are emerging and have the power to transform supply chains. Companies like Amazon, UPS, and FedEx are already investing in drone delivery systems and self-driving delivery vehicles, signaling an industry-wide shift towards automation in logistics.
AVs and drones in the supply chain can have huge business benefits, such as reducing operational costs, improving delivery speed, and increasing efficiency. However, deploying and integrating these technologies into supply chain planning comes with challenges, from regulatory hurdles to infrastructure requirements.
This article covers everything you need to know about the current state of autonomous vehicles and drones in supply chain planning.
The Rise of AVs and Drones in Last-Mile Delivery
Amazon drones can deliver packages up to five pounds in under an hour. Self-driving robots that make food and small grocery deliveries. COVID-19 vaccines delivered via UPS drone. In the past few years, companies have started to turn to autonomous vehicles and drones to execute last-mile delivery. These technologies are well-suited to meet the needs of consumers, who overwhelmingly expect “faster delivery” times, and the needs of businesses to address inefficiencies, reduce costs, and improve delivery speeds.
Look at each technology and its rising role in the supply chain.
Autonomous Vehicles
Autonomous vehicles, including self-driving vans, trucks, and small robotic couriers, are revolutionizing package transportation within cities and suburban areas. These vehicles use AI-powered navigation, sensors, and real-time traffic data to optimize routes and avoid congestion.
The benefits of AVs in last-mile delivery include:
- Reduced labor costs: With self-driving vehicles, businesses can minimize dependency on human drivers, cutting payroll expenses.
- 24/7 operations: Unlike human drivers, AVs don’t require breaks, allowing continuous deliveries at all hours.
- Route optimization: AI-powered route mapping and real-time traffic data help AVs take the fastest, most cost-effective routes.
- Lower carbon footprint: Many AVs run on electric power, contributing to a lower carbon footprint and more sustainable logistics.
Drones
Drones, or unmanned aerial vehicles (UAVs), provide an alternative to ground-based delivery methods, especially for lightweight or time-sensitive shipments. Companies are increasingly exploring drone technology to bypass road congestion and reach remote or hard-to-access locations.
The benefits of drones in last-mile delivery include:
- Faster delivery times: Drones can significantly reduce delivery times by avoiding traffic delays.
- Lower last-mile costs: Studies show that drones can drastically lower delivery costs per parcel, potentially 70% less than traditional methods.
- Enhanced accessibility: They’re ideal for rural areas or disaster-affected areas where roads may be impassible.
While AVs are better suited for larger, heavier loads and urban environments, drones excel in delivering small packages quickly over short distances. Together, these technologies are beginning to redefine how goods reach consumers.
Considerations for Integrating AVs and Drones in Supply Chain Planning
Consider integrating autonomous vehicles and drones into your supply chain planning. Here are some key considerations to keep in mind:
1. Infrastructure and technology requirements
Both AVs and drones in last-mile delivery require substantial infrastructure and technology. First, consider your current tech stack. Are you using a warehouse management system (WMS), enterprise resource planning (ERP), or inventory management software? If not, you might consider deploying these technologies or upgrading your current solution to one that has advanced capabilities. A foundation of accurate, real-time inventory data is essential for AVs and drones.
Next, consider what technology and infrastructure you need to support AV and drone last-mile deliveries.
This might include:
- Navigation systems: Advanced GPS, LiDAR scanners, and AI-powered mapping technologies are essential for AVs and drones to operate safely and efficiently.
- Charging & maintenance stations: Electric-powered AVs and drones require charging and maintenance infrastructure to ensure continuous operation.
- Fulfillment center adaptations: Warehouses may need reconfiguring to accommodate automated loading/unloading and drone launch zones.
- Fleet management software: Real-time tracking, predictive analytics, and AI-based route optimization are critical for efficient fleet operations.
2. Regulatory challenges
Local, national, and international regulations heavily influence the widespread application of AVs and drones in the supply chain. For example, drones typically face flight restrictions, such as altitude limits and no-fly zones. Regarding AVs, urban environments can present challenges like pedestrian safety concerns and traffic integration. Also, businesses must prepare for any scenario by addressing insurance and liability needs, such as defining responsibility in an accident or malfunction.
3. Investment considerations
While these technologies promise long-term savings, they can also come with significant upfront spending. Businesses must account for initial investment costs, such as purchasing the AVs and drones, upgrading logistics infrastructure, and developing software integrations. However, over time, reduced labor costs, lower fuel expenses, and optimized routes can offset initial expenses.
To best determine the financial implications of AVs and drones on supply chain planning, companies should conduct an ROI analysis to assess how quickly they can recoup their investments based on factors like delivery volume, distance, and operational efficiency.
4. Consumer acceptance and expectations
The use of AVs and drones in last-mile delivery might shock consumers at first, and they might not initially trust these technologies. This means businesses will need to help customers feel secure and confident in these methods. For example, some customers might hesitate to receive packages from driverless vehicles or drones. To overcome this obstacle, businesses initiate public education and marketing efforts.
To meet consumer expectations and build trust, businesses must ensure their AVs and drones can deliver packages securely without interruptions. Also, consider the user experience. Elements like order tracking, real-time delivery updates, and easy-to-use interfaces can enhance the adoption of these technologies.
Autonomous vehicles and drones are becoming key components of last-mile delivery. While these technologies are still emerging, businesses are already starting to embrace and deploy them to address modern delivery needs and customer expectations. By integrating AVs and drones into supply chain planning, businesses can boost their bottom line and improve their supply chain planning while maintaining a competitive edge in the market.
Prepare for Future Supply Chain Tech with StockIQ
Supply chain technology is changing at the speed of light. Worried about getting left behind? You can start by overhauling your inventory management processes with StockIQ.
StockIQ is user-friendly inventory optimization software built for businesses like yours. It lets you control inventory, simplify ordering, and improve demand forecasting by collecting real-time data, giving you intelligent recommendations, and sharing insights in advanced dashboards.
A strong inventory management system is essential if you’re planning to add autonomous vehicles and drones to your warehouses. Are you interested in seeing how StockIQ can support the future of your supply chain? Contact us today or request a StockIQ demo.
