Definition and History

Drones are nothing but Unmanned Aerial Vehicles (UAV).

A Drone comprises of frame, propellers, engine and the electronic control and it was earlier used for military, agriculture, police, filming purposes etc.

There are various anecdotes surrounding the Drones .History says that Austrian army first developed this when they attacked Venice in 1849 with unmanned air balloons filled with explosives

The early version of today’s aerial drones was the Hewitt Sperry Automated Airplane developed by  Sperry Gyroscope Company . The US army had converted their Standard E-1 planes into drones. Larynx was one of these planes. They were used as early as WW 2.

Commercial applications of Drones

Drones have made our life easier as it finds applications in various areas useful to mankind. Some of them have been listed below.

  1. Defence: Drones have been extensively used in the defence sector for different missions like artillery correction, target tracking etc. Some of the drones used in India for this purpose include Lakshya,Daksh,Rustom etc.
  2. Manual inspections: At construction sites where hazardous tasks like site surveys, scaffolding inspections or Overhead line inspection needs to performed, drones prove to be a safer and more effective way of doing these jobs. By using drones the exposure of falls can be eliminated which a major issue at construction sites leading to Lost Time Incidents, causing work stoppage and economic loss.
  3. Agriculture: Drones have been found to be very useful in the agricultural sector for testing soil, helping optimize water content and fertilizer usage, with the intent of improving crop yields.  Skymet are using such drones for this purpose in Maharashtra,Gujarat,Rajasthan etc.
  4. Wildlife Conservation: Drones fitted with high definition thermal cameras are used to track, inspect and monitor livestock remotely.
  5. Healthcare: Of late Drones have been useful in transporting lifesaving drugs, blood etc to remote areas. ‘Bloodstream’ a firm started by three young entrepreneurs in India uses drones, data science and cloud based inventory management to provide blood to remote and inaccessible areas.
  6. Weather Forecasting: Drones can help provide real time data of weather events.NASA owned drone Global Hawk (a high-altitude drone) went into action flying over ‘hurricane Matthew’ upgrading it from a tropical storm to hurricane.

Drones application in Supply chain Management.

As on date Drones have limited applications in Supply chain management owing to various constraints some of which are listed below. Moreover our Govt. has still not allowed usage of drone for delivery of goods and food items and hence logistics companies will have to wait to reap the benefit of this technology.

However Drones have a major role to play in Warehousing and distribution Management. For example, drones with cameras can move around the warehouse seeing areas where an ordinary security camera cannot reach. Using RFID, QR-codes, and IoT, drones can be used to take physical inventory. Walmart  stores is currently testing drones for the same. Drones can also  be used to move small items around distribution centres thereby minimising the use of expensive handling equipments like Forklifts, conveyers etc.

Drones could also play a vital role in intra logistics. In an automotive industry where mass production takes place and idle time costs are significantly high, these drones can be used to ship parts between work stations efficiently. They can also support  supplier-to-plant emergency deliveries which are typically performed by helicopter and other costly transportation measures.

Last mile delivery to customer has been the biggest challenge in supply chain management. Drones have the potential to possibly speed up deliveries and reduce costs as it travels in a straight line.

Fedex and UPS are employing drones to monitor traffic and optimise driver routes to improve last mile delivery.DHL.Amazon and Google are aggressively working around shipment being delivered at your door step using these Drones.

Logistics industry prefers using drones for delivery of materials and goods to rural areas and remote locations as the deliveries to these locations incur more cost and time in comparison to normal deliveries made in urban areas.

Following are some of the constraints that need immediate attention and mitigation before we can fully exploit the potential of Drones  in Supply chain Management.

  1. Government regulations

As per the Drone regulations 1.0 (DR 1.0)issued by Director General of Civil Aviation (DGCA) in India, civilian drones can only fly within 450 mts altitude  and in the line of sight. Also Civilian or commercial drones can’t fly in red zones, like in the vicinity of international border, near  vital and military installations, near airports  etc.

The regulation also calls for all drones (except micro drones which are less than 2kg in weight) to have an Unique Identification Number. DGCA has also come up with Digital Sky platform to keep an eye on these drone activities.  Even if one was to comply to all these regulations prescribed in  DR 1.0, delivery of goods and food item by drones is not permitted by government which is a handicap for logistics companies.

  1. Insurance and Drone costs

Since drones technology is still in the nascent stage the cost associated with acquiring and operating the same is still high. Moreover this idea still being an untested one  insurance companies are yet to come forward with a ‘realistic premium’  because if it were to cause  any damage or personal injury the compensation would set back the insurance companies by millions of rupee. This makes drone deliveries cost prohibitive and unviable. Biggest safety threat is collision with aeroplanes hence most airports ban drones flying near them

  1. Weather conditions

These drones will have to circumvent different weather conditions like sand storm,rain and other adverse weather conditions which may damage both the drone and the package it carries. Hence drone can be relied upon for delivery only under optimal weather conditions which again makes delivery by Drones not a preferred option.

  1. Urban deliveries

With more and more people migrating to big cities in search of better lifestyles and living conditions drone deliveries will gain more importance in big cities. Drone delivery in big cities is fraught with risk owing to sky rise buildings and other infrastructure monuments coming in their way.

  1. Theft and pilferage

In the conventional mode of delivery a package can be delivered to your doorstep, while this is currently a handicap with drone delivery as they can only deliver the cargo in an open space which maybe susceptible to theft or pilferage. Drones can also be hacked while in transit and sensitive information stolen from them.

  1. Payload capacity

It has been found that even high-end drones have a limited battery life supporting a flying time of 15-30 minutes with limited payload carrying capacity. Such limitations can make drone deliveries commercially unviable.

  1. Surveillance by drones can also raises significant issues of privacy and civil liberties which will have to be dealt separately.

However all these constraints have not deterred entrepreneurs to come forward and reap the benefits of this technology. The world’s largest online retailer, Amazon and the world´s largest logistics company DPDHL are testing Drone delivery systems. Amazon has a  patent for a flying warehouse (“airborne fulfilment centre” AFC) that will use  drones to deliver packages quickly.Flirtey plans to introduce the worlds -first commercial drones for delivery. Student text book rental service Zookal will use Flirtey to deliver parcels directly to a customer

In the last decade companies like Walker,Helimax,Parrot etc.have developed mini drones which uses this technology for aerial photography and flight control.

Current scenario

India has been the biggest importer of UAV (Drones)with over 1574 units being shipped in the last three decades (amounting to 22.5% of the world’s imports)

Although it had wide applications, DGCA in 2014 prohibited the use of drones in India for civil purposes. In April 2016, the DGCA released its initial draft guidelines for drone regulation followed by the updated draft guidelines in November 2017.

Finally Ministry of Civil aviation has come up with Drone Regulations 1.0 which will come into effect from 1st Dec 2018.

What does the Future hold ……..

PWC estimates that drone services could soon touch 127 bn $ globally but for complex regulatory environment and complicated technology which has delayed its wide acceptance. We may witness more than a million drones in the sky by 2025 creating 100,000  jobs.

Despite the great potential it holds, Drone regulation 1.0 is does not benefit Logistics companies as these drones cannot be used for delivery of goods and materials. However, Drone regulation 2.0 which is still being worked out  should be able to address these issues for the overall benefit all stakeholders in the Supply chain.

Recommendations to make this technology  beneficial to the SCM community………

  1. In order to harness the full potential of this technology our Government should implement drone regulation effectively and should promote innovation in the development of drones.
  2. Unnecessary requirements should be done away with and there should be a single-window clearance to encourage more and more technocrats and technology to enter in this field.
  3. Government should be sensitive to the protection of privacy of citizens and hence should limit the use of drones for surveillance.
  4. Safety and security aspect should be adequately taken care with improved technology  to ensure we have drones that can fly in all weather conditions and is not susceptible to theft.
  5. Moreover value engineering in this area has been helpful in reducing the weight of these drones by shifting from NiCad and NiMH Batteries which were heavy to Light weight Lithium Cobalt oxide batteries and thereby improving payload capacity.

The Supply chain Management fraternity can look forward to a Drone regulation 2.0 policy which will change the way we do business and help us drive down the logistics cost which will have a positive impact on our GDP.

Damodaran M

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