This is the final post in this series on the Wholesale Distribution Industry. I’m wrapping up with a potential longer-term trend that I think could have quite an impact on many industries including wholesale distribution.  Let’s talk drones. 

In the next 5-10 years, there are a number of things that could disrupt the wholesale distribution industry – 3D printing, vertical integration, horizontal integration and drones. Drones are especially interesting, as their disruption aligns well with the Retail Revolution, online shopping and the escalating expectations of consumers. Drones are beginning to rule the sky. These unmanned aerial vehicles, or UAVS, have been around since the Vietnam War, yet only now is their presence impacting mainstream society, and soon our commercial industries.  By 2025, the UAV industry predicts drones will add over $82 billion to the U.S. GDP with the FAA’s plans to integrate drones into U.S. national airspace by 2015. The Wholesale Industry could benefit in many ways from the introduction of commercial drones.  However, many remain skeptical of its potential impact.  We have identified four common myths related to drones and analyzed them as they related to the wholesale industry:

MYTH #1: ALL AIRSPACE BELOW 400 FEET IS NOT CONTROLLED BY THE FAA.

While the FAA highly regulates airspace above 500 feet, it also controls all airspace above the ground.  For this reason, the personal drone market has seen dramatic growth and soon the commercial drone market with the FAA deciding how to integrate drones into all airspace by 2015.  When the airspace becomes available for commercial uses, it could offer attractive alternative distributive and operational methods to the wholesale industry.

MYTH #2: DRONE TECHNOLOGY ONLY EXISTS FOR PERSONAL AND MILITARY USE IN THE U.S.

Drone technology is only available for personal and military use in the U.S., however commercial technology is being developed in preparation for the future industry.  Currently, personal drone software lacks the flexibility to adapt to the needs of a commercial business.  For this reason, many established and start-up drone companies are focused on developing software which enables drones to be both integrable and operationally beneficial.   An example of these pioneers is commercial drone start-up Airwave with over $40 million in funding whose business-focused operating system enables drones with autopilot, navigation, sensors, software and cloud infrastructure to store and analyze relevant operational data.

MYTH #3: NO FLYING SKILL IS REQUIRED TO OPERATE A DRONE.

Often it’s said that flying a drone is a relatively simple task.  While advances in drone technology have made piloting the vehicles easier, there are still many scenarios which require highly trained pilots to ensure the integrity and safety of the drone.  To take full advantage of drones’ commercial uses, Wholesaler’s will need to invest in training technical drone operator to mitigate the risks and maximize the benefits of using drone technology.

MYTH #4: DRONES CAN ONLY FLY FOR A SHORT PERIOD OF TIME.

As most personal drones are battery-operated, doubts have been raised with regards to the sustained flight time of commercial drones.  Most personal drones have a battery life of less than one hour.  However, the U.S. military has developed drones that can travel thousands of miles over the course of several hours.  Additionally, Boeing is developing a solar power drone that could fly at high altitude for five consecutive years and empower Wholesaler’s operations with minimal maintenance. Investment and innovation in commercial drone technology have ramped up in anticipation for the inevitable regulations of the FAA.  The adoption of drones in commercial industries could add benefits across many functional areas of businesses.

LOOKING FORWARD:

• From enhancing new product launches to surveying warehouse inventory, how could drone technology benefit your business?
• Are any of your internal teams, including business development, IT and/or supply chain, actively engaging with the drone space to pursue feasibility?
• How would your supply chain strategy change if drones were available for use?
• How could drones change your relationships with retailers?
• Is your current technology landscape in a position to incorporate additional delivery mechanisms, like drones?