Logistic and Supply Chain players should understand a few factors to be able to best leverage the technology and manoeuvre through the challenges.
The recent Drone Liberalization Policy announced by the central government in 2021, is set to accelerate the AI and Robotics enabled technology adoption across sectors, include defense, mining and Logistics. This move is also in line with the government’s ambitious National Logistics Policy, which aims to bring a series of infrastructure and policy changes, and will aid in bringing down the overall logistics costs of the country.
The new policy comprises of a number of relaxations in the drone procurement and use by the private sector, making the technology affordable and accessible. The policy has also increased the permissible weight load for drones and drone taxis, increasing it from the previous 300 Kg. to 500 Kg. For the logistics sector, this translates as major disrupter. The move, when implemented, will help logistics and supply chain players to cut costs, reduce delivery times and drive efficiency, while optimizing human resources and minimizing dependency on road transport, that is marred with delays and roadblocks. Not to mention the impact on environmental pollution, which is also set to reduce drastically, since road transport is one of the leading sources of air and sound pollution.
But all of the above is not going to be without its challenges. Even as most drone deliveries are right now focused on medical/ pharma and will soon be adopted widely by e-commerce players for last mile deliveries, the real potential of the technology will only be truly tapped when a wider set of 3PL/ 4PL logistics supply players are able to adopt the same. As India Inc. continues to gradually explore the possibilities of emerging technologies like AI, robotics, and ML, the logistics and supply chains sector is also set to gradually embrace the disruption, putting it on the road to accelerated growth. And eventually, the aim of arresting the high logistics costs to under 10% of the GDP from the current 14% will be an achievable target!
Listed here are a few factors that need to be understood by Logistic and Supply Chain players, to be able to best leverage the technology and manoeuvre through the challenges of the new technology:
- ROI/ Investment: As is the case with any new technology adoption, investment and ROI are the fundamental aspects to be considered before embarking on developing a drone delivery system. For a logistics and supply chain player, this translates into working on the basic cost analysis, labour and technology ratio, the value that this will bring to the business and the brand and need for upgrading supportive technology infrastructure needed to effectively leverage drone deliveries etc., need to all be well calculated and analysed.
- Geography: This is one of the basic attributes that make drones so appealing – the ability to reach the most remote areas and are difficult to reach through conventional last mile operators. This includes deliveries to rural areas with bad or undeveloped transport infrastructure, or deliveries to areas impacted by calamities like floods, which make them inaccessible. When considering drone deliveries, one needs to analyse the specific geography where these may be most useful and add value to the existing brand reputation.
- Nature of Cargo and special delivery requirements: Another important aspect to consider in drone delivery is the specific nature of cargo that one intends to use drone deliveries for. From specific timely deliveries to remote locations and ne and temperature controlled deliveries over shorter distances, drone deliveries need to be clearly defined, in alignment with approved government polices, special routes, and a contingency plan in case of a malfunction.
- The right technology partner: For traditional logistics and supply chain providers, partnering with the right drone delivery expert is vital, to not only ensure efficacy and cost effective last mile deliveries but to also enhance the overall supply chain operations and to achieve customer success, while building trust. Having a long term partnership goal and vision can help brands to leverage not only the best in drone based deliveries but to eventually streamline smart technology enabled operations across the entire supply chain, building value, trust and industry leadership, in the years to come.
In line with the above factors, it is also important for Indian logistics and supply chain providers to evaluate their long term business goals and build a vision that integrates AI, ML and Intelligent device led operations, to be able to truly embrace digital transformation.
(The author is Executive Director, and Board Member of Jeena & Co. and the views expressed in the article are his own)