Drones on the move!

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Ever contemplated drone distributing for the online component your business?

A drone is an unmanned aerial vehicle (UAV) or unmanned aircraft system (UAS). It is an aircraft without a human pilot aboard. It is controlled by remote control from an operator or by an on-board computer. Until quiet recently Drones have been predominantly used in military and special operation applications often for operations too dangerous for a manned aircraft. However Drones are increasingly being used for civil and domestic purposes. For example: surveillance, aerial filming and drone racing have been growing for a few years. Currently through GPS technology, drones can precisely find locations, however they require the push of a button to return to sender.

Huge Potential for Drones to streamline the distribution channel

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http://www.abc.net.au/news/2016-04-15/australia-post-to-trial-drone-parcel-delivery-of-online-shopping/7331170

With transportation taking up to 50% of distribution costs, companies are always looking for new ways to deliver physical products from seller to buyer (Iacobucci, 2014).

With regard to transport time is money. Through the usage of drones; goods can be delivered quickly without the expense of paying for fuel and other escalating automotive expenses.

Australia Post has recently trialled remotely piloted drones with the backing of the Civil Aviation Safety Authority. The company claims it plans to trial the service with consumers by the end of the year. The delivery drones (developed by Melbourne company ARI Labs) have high definition cameras and a parachute. They are able to send data back to a ground station so flight activity can be monitored (ARI Labs hopes to be able to automate the monitoring in future).

In the USA, retailers Wal-Mart and Amazon have sought government permission to test for product delivery (it is currently illegal to use drones for commercial purposes). There is a Walmart store within 5 miles of 70% of the US population…… drones could be a very efficient way to move product through its extensive supply chain.

As the technology gets more sophisticated there’s a drone of possibilities..

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There could be drone landing ‘locations’ in suburbs, much like the 7/11 locker system for parcels, where drones can land and buyers can take their merchandise once they identify themselves via finger print or by putting in a code.

Companies can apply branding elements and ads to their drones, advertising as the drone moves along the flight path. The recipient of the goods may also receive promotional material when they receive their goods.

Research agrees that the use of drones at the stage of product assembly to transport materials in the factory could overcome the limitations of conveyer belts and hand trucks; leading to higher levels of productivity. Drones could make distribution channels more efficient and profitable; as efficiencies improve channel members may drop off (pardon the pun). (Olivares, Cordova, Sepulveda & Derpich, 2015) (Mohammadi, Tavakkoli-Mpghaddam, Siadat & Dantan, 2016)

The Law…

It looks like governments needs to jump on board (literally) and refine guidelines for drone use. Although governments around the world have already had the ‘heads up’ on increasing drone technology advances they appear to be behind in their regulations.

In Australia, government recently made changes to regulations for commercial drones weighing less than 2kg – as of September 2016, commercial operators will not need an operator’s certificate or remote pilot’s licence.

Safety and Insurance…(you could be in a lot of trouble if you don’t have the right coverage)

ARI Labs state that their drones are equipped with an alarm and warning lights which can be activated as safety precautions. Apparently a World Cup skier narrowly escaped injury by a drone filming the performance.

Australia Post has stressed the importance of safety in using the technology, stating “We’ll only bring it into play once we are 100 per cent sure that it’s safe and reliable.”

 The Future…

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It is not difficult to imagine drones being used to directly deliver ‘intensively’ distributed products. For products servicing a ‘selective’ distribution market, requiring a sales person, drones have a use in streamlining manufacturing channels.

In my research I found much talk of drones in specialist transport roles for high value small items such as medical supplies or where other means of transport is very limited (such as a disaster zones) where speed is a criteria.

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References

http://www.smh.com.au/technology/innovation/australia-post-tests-drones-for-parcel-delivery-20160415-go77a4.html#ixzz4899CJQkQ

Iacobucci. D (2014). Marketing Management (4th ed.).

http://www.smh.com.au/technology/innovation/australia-post-tests-drones-for-parcel-delivery-20160415-go77a4.html#ixzz4899J1m00

Modelling Internal Logistics by using Drones on the stage of Assembly of Products: http://huffingtonpost.com/ira-kalb/they-laughed-when-i-sugge_b_8408966.html

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