An Update on Drones and Drone Delivery

I wrote about Drones first in February of 2013 after watching a Nova episode called "Rise of the drones".  This was almost a full year before the infamous Jeff Bezos 60 minutes episode where he somewhat stunned the world discussing using drones as delivery vehicles.  In one way we have come a long way and in another, it is amazing how slow it has taken to commercialize this.

Two updates to report.  First, at the CSCMP Annual Conference I was able to attend the "Educators Conference" and watched a great presentation by Professor Dr. James Campbell, Professor and Chair, Logistics & Operations Management Department,  College of Business Administration, University of Missouri - St. Louis.  He discussed the use of the "Truck - Drone" hybrid which entails trucks moving to central locations with product.  At that location, the drones would be launched and conduct deliveries.  A fascinating topic which made more sense as things such as battery life and laws about flying out of vision will make launching them from central DCs almost impossible for the near term.

He also had a nice graph showing the cost per delivery and Amazon can get this cost down to $1.00 per package.  That is amazing.  There was a lot more in the presentation and it is clear thought leaders such as Dr. Campbell are making large strides.

Second, I checked in on Missy Cummings who, in 2013 was the star of the Nova episode. Remember, she was one of the first F/18 pilots for the US Navy and a graduate of the US Naval Academy.  She now runs HAL - The Human Autonomy Lab at Duke.  She continues to study the use of bigger and bigger drones and believes these will be used for delivery.  She also has an interesting twist (See video below) on the human interaction of drones.  That is becoming the topic as the technology is no longer "futuristic" but rather it is known and can be implemented.  The question is how will we interact with drones.

If you have not seen the original NOVA episode, even though it is 3 years old, you really should watch it (Below).  I have also included a recent speech Missy made.  She is truly brilliant in this field.

Mary "Missy" Cummings Gives Talk at Duke

PBS NOVA - Rise of the Drones

A Drone Delivers Your Package - Part Deux

Today the logistics world is a buzz with the idea that Jeff Bezos rolled out on 60 minutes last night that a drone could deliver your package.

Too bad 60 minutes did not read this article "A Drone Delivers Your Package" back in FEBRUARY of 2013!

Robots and Other Supply Chain Trends - Kevin O'Marah

Believe it or not there is a Kevin O'Marah out there (yes, he spells his name differently than I do) and he is in the supply chain field.  Actually, a very accomplished person in this field.  I have been in a few meetings with him and it is fun to see who the moderator really means to call on (hint: it is usually him).

I write this because I wrote a piece over the weekend entitled "A Drone Delivers Your Package". The article discusses how the use of drones may come to package delivery.  Kevin retweeted this and made a reference to an article he wrote just last week about 5 big supply chain trends.  One of these trends was "Robotics takes off".  While he does not reference drones he clearly articulates, rightfully so, that robotics will take off in the logistics field and the trade off of capital versus labor is starting to favor capital in a big way.

Robots, like the drones I mentioned, are becoming incredibly cheaper at the same time they are also becoming more dexterous and mobile.  Here are the 5 predictions:

1. Amazon stumbles - A bold but insightful prediction and one which is not so much predicated on them failing but on the brick and mortar guys learning to compete very quickly. 
2. Africa Becomes Your Most Important Growth Partner -  It is essentially the "final frontier".
3. The Carbon Tax Happens -  I could not agree more.  A tax, cap and trade or whatever form it takes, we will soon pay for destroying the environment. 
4. Robotics Takes Off - Enough said.
5. CSCO becomes the CEO - While this has already happened the rise of logistics and supply chain as the core differentiator makes those who hold this important position more likely to take over the company (see my article: Logistics Eats Strategy for Lunch).

So, we agree... Great predictions here and they are refreshing because they are bold and not the same old thing just warmed over.  Kevin is someone I have followed from back in his AMR days and I highly encourage you all to do the same.  You can read his writings at his blog: Beyond Supply Chain. 

Kevin's tweet is below:

"RT @logisticsexpert drones and robots in supply chain!!: dld.bz/cd2hg -see 5 predicts tinyurl.com/b2ld7z3
— Kevin O'Marah (@komarah) February 4, 2013"

As a side note this is also why people are guarded about all the optimism on the return of manufacturing to the United States.  One has to ask if it is because labor is getting expensive in China relative to labor in the US (when accounting for transportation costs) or is it because robotics have become so good and cheap that you reshore manufacturing in the US to save logistics costs AND you do not employ many people due to automation.

Paul Krugman is even weighing in on this. 

A Drone Delivers Your Package?

Missy Cummings
Boston Globe

Recently, I watched a fascinating show on Nova entitled:  "Rise of the Drones" and as usual, I never expected to get a logistics thought out of the show however, as usual, one develops.  A key scientist (Missy Cummings, former F/18 fighter pilot and now MIT Scientist) being interviewed for the show had actually said "imagine a drone delivering your FEDEX package...".  Now that got me thinking.

First, I had no idea how far the technology for drones has developed in the last 10 years. What they can do and what they are doing is absolutely amazing.  A scary item is they are readily available with a quick search on Amazon you can find many "drones" for less than $1,000 which can do a lot of things (not the least of which from a privacy concern standpoint is take pictures). Here is one I found which I found especially intriguing for less than $750 and it advertises itself as having everything you need to "start aerial filming".  It is called the DJI Phantom Aerial UAV Drone.

So, what is the implication for logistics?  Well, just like what I have been discussion relative to 3D Printing, there is a chance this could revolutionize air freight delivery in the package space.  Think of these key items:

• It is easy and cost effective for the package delivery companies to continue doing what they do today for big population centers.
• The costs increase tremendously for servicing small, less densely populated areas. 
• They cannot afford the pilots and complex planes just to service a town of 10K and the drivers and trucks are very expensive as well. 

Now, imagine the following scenario:

• A major population hub is where the large plane from a central sorting site lands. This plane has packages for both truck delivery at the major population center and also packages for all the small little towns that are within a 150 mile radius. 
• Rather than send linehaul trucks to these small towns (which many have some kind of air strip - there are over 5100 paved runways in the United States), the package company launches 20 drones with packages on board - unmanned and controlled via GPS (One learning from the NOVA show was they are starting to eliminate even the pilot on the ground and go 100% automated GPS flying)
• A person in the town, local person with a local delivery truck, takes the packages off the drone and sends it back on its way to the central location (perhaps even with returns).
• This local person does simple pick up and delivery.

While I would have said this is far in the future 2 days ago, now that I have watched this show I am not sure how far it is.  Once again, another technology which not only reduces miles driven, reduces demand for drivers and reduces costs but it actually eliminates many of them completely.