Dive Brief:

• PINC Solutions CEO Matt Yearling told APICS 2017 conference attendees that if they aren't investing in drone tech, they're already behind their competitors. Some of the key benefits drones provide, he said, include improved inventory accuracy rates, greater operational efficiency and employee safety.
• The employee turnover rate in distribution centers is currently at 40%, so Yearling sees drones as a necessary component for companies seeking a stable supply chain and better inventory management.
• Another reason why Yearling is so urgent about drones in warehouses is that there are currently no Occupational Safety and Health Administration (OSHA) regulations regarding the use of drones inside a building. Therefore, there's not a whole lot standing in the way of drone innovation for warehouse use.

Dive Insight:

Drones have been a buzzword for a while, and according to Yearling, the hype is "very similar" to the RFID buzz back in the 90s. And according to the Gartner hype cycle, drones have already peaked and are about to enter the "trough of disillusionment."

But Yearling disagrees.

"I think the trough of disillusionment will be much shallower than that of RFID," he told conference attendees. "The tech is getting faster, better, cheaper."

The opportunities for drones are endless, including delivery, photography, surveillance, assessment and inspection, asset tracking and inventory management. But Yearling says drones are no longer a "buzzword," and supply chain professionals need to know that.

"Everyone keeps on talking about autonomous trucks, I have no idea why people are talking about autonomous trucks," Yearling said, then launched into a description of how autonomous drones are what warehouses need and can implement now.

Autonomous drones, according to Yearling, can perform mundane and repetitive inventory management tasks, as well as tasks that are dangerous for humans, such as flying up to view inventory on high shelves. Drone tech is growing so advanced that some are artificially intelligent, requiring very little oversight. Because warehouses are such an integral part of the supply chain in a growing e-commerce-centered commercial world, and because the warehouse worker turnover rate is so high, Yearling thinks now is the perfect time for companies to start using drones.

"Inventory management is still a very people-intensive activity," he said, which is a problem when there's a 40% turnover rate. "Inventory accuracy is very important, because it affects velocity."

Companies can't afford inventory inaccuracy, which is why drones are so attractive. And while some may fear autonomous drones will replace human workers, Yearling said that shouldn't be a concern — yet — and that fear will actually blunt a company's competitive edge.

"They're not going to replace humans today," he said. "If you don't have an initiative to evaluate the applicability of drone technology in your supply chain, you're already behind your competitors."