Learn how the investment in autonomous drone fleets will create business value in a reasonable amount of time, with minimal technical and operational risk.

1. ware
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How to Evaluate
IN Drones for Inventory count

2. As drones get adopted by warehouse managers for inventory counting, it is
important to determine how the investment in autonomous drone fleets will
create business value in a reasonable amount of time, with minimal technical
and operational risk. The promise of drone-based barcode scanning, versus
more expensive alternatives such as RFID and ground robots, includes
relatively lower capital investment, quick payback, ease of scalability and
rapid progression from PoCs to production deployments.
However, there is a sweet-spot for autonomous drone-based stock takes – not
all warehouses can expect meaningful return-on-investment (RoI)
immediately. In fact, there is a relatively well-defined segment of the
warehouse market that is emerging as the ideal candidate for aerial inventory
management. Of course, early adopters of warehouse automation
technologies are already reaping the commercial and competitive benefits
of aerial inventory management.
How To Ensure RoI From Drone-based Cycle Counting In Warehouses
The inherent benefits of aerial inventory counts make them well suited to
scanning items stored in rack-pallet configuration. Consider the top-view of a
typical storage area – with A1, A2 … being
the aisles and R1, R2, … the corresponding
racks. A4 is illustrated as a very narrow
aisle (VNA).
To determine the viability of drone
flights, we do need to factor in the width
of traditional aisles (Aw) as well as VNAs
(VNAw). The time taken to cover a rack
using an autonomous drone will, of
course, depend on aisle length (AL) as
well as rack height. Slot width (Sw) is not
as critical neither is rack depth (Rd) –
the one limitation with drone-based
barcode scans is that only 1-deep items
can be accurately counted. For deeper
storage, RFID tags need to be used for
each item – these can then be read by RFID scanners mounted on drones.
Rack-Pallet Storage
1
A1
R1
R2
R3 Rd
R4
R5
R6
R7
R8
R9
Rx
A2
A3
A4
A5
Ax
Aw
VNAw
AL
Sw
© FlytBase, Inc. Confidential.
Top View of Warehouse
ware
b
a
s
e
A FlytBase, Inc. Product

3. Now consider the isometric view of a typical rack-storage area. There are likely
to be shelves/rows of different height (H1, H2, …) along the rack height. Similarly,
there may be one or more pallets in a bin location and one or more barcodes
on a pallet. The power of visual barcode scanning (versus handheld barcode
readers) is that it does not matter how many shelves, items, barcodes, etc. are
to be scanned – so long as they are in the drone’s field of view, they will be
captured as images, automatically read, and archived for future reference
and audits.
The topmost surface of racks is sometimes used to store items – the
maximum height of such storage (Hmax) must be factored in while
computing the time taken by the drone to cover the entire rack. Clearance at
the top of the rack (Hclear) matters because overhead fans may cause
turbulence, resulting in unstable drone flights, and hence an inability to
navigate precisely and read barcodes accurately. Such ambient conditions
(including temperature, magnetic interference, lighting) must be analyzed
and addressed in the standard operating procedures designed for fully
autonomous drone missions.
2
P
1
P
n
S
w
H1
H2
H3
Hx
Hm
ax
Hclear
TL
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4. Most certainly yes, if:
The cumulative linear feet (i.e. number of aisles * length of an aisle) of
rack-pallet storage in your warehouse is at-least 2,500 feet, and the
racks are at least 25 feet high.
Items are stored in 1-deep configuration with front-facing barcodes.
Barcodes may be partially torn or obscured, covered with plastic, or
misaligned.
You would like to significantly increase your cycle count frequency.
You would like to meaningfully reduce the hours kept aside each day for
cycle counting.
At-least 2 full-time equivalent (FTE) resources are currently required in
your warehouse to perform cycle counts.
During peak season(s), you need to pay over-time and/or hire part-time
labor to augment the full-time resources.
Autonomous counts, with minimal human intervention/supervision, are
strategically important to your warehouse operations.
The labor cost savings alone result in a payback period of 1 year or less,
from the date of production deployment.
You envision significant usage of drone-based image/video data after
the missions – for purposes such as inventory audits, tracing sources of
inaccuracies, optimizing cycle count frequencies and hours, etc.
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Should Your Warehouse Deploy Autonomous Drones For Cycle Counts?
Business Value From Drones in Warehouses
The business value to be created by drones in warehouses will stem from a
variety of use-cases such as:
Cycle count
Item search
Empty & full slot detection
Inventory audits
Roof inspection
Corrosion detection
Perimeter security, etc.
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5. Further, for a given use-case, such as cycle count, the value will be realized as
a combination of:
4
In fact, the value will increase as we factor in the positive impact on:
While it may take years to realize the entire business value from the factors
mentioned above, the reality is that unless the payback period on the drone
investment is in quarters (not years), most warehouse stakeholders are
unlikely to adopt drones, beyond perhaps a few PoC or pilot deployments. This,
in turn, requires cost-effective drones paired with SaaS solutions, that directly
align the (capital, operating) expenditure on autonomous drone solutions to
business outcomes.
In fact, the total cost of ownership (TCO) for drone solutions remains largely
uncertain, since most drone solutions in the market use custom, monolithic
drones that carry a substantial risk of unreliability, lack scalability and are
Capital tied up in buffer stock
Revenue risk due to stockouts, mis-shipments
Losses due to shrinkage
Productivity losses due to absenteeism
Operational inefficiency due to labor shortages
Margin reductions due to audit/regulatory penalties, etc.
RoI, Payback, and TCO
Fewer full-time resources to be engaged in inventory counts
Lesser utilization of equipment (forklifts, reach trucks, scissor lifts,
ladders, barcode scanners, etc.) needed for inventory counts
Cost savings
Faster, better fulfillment due to better inventory location accuracy
Shorter shutdowns for wall-to-wall counts
Revenue improvements
Fewer worker injuries, lower healthcare reimbursements
Lower personnel-related liabilities
Safety improvements
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6. 5
subject to software-driven obsolescence. The only way to mitigate this risk is
to use reliable, off-the-shelf drones with a flight history of millions of hours and
short lead-times for bulk orders.
The cost of capital for the warehousing industry in the developed economies
tends to be in the range of 10% to 15%. Thus, a viable business case for drone
adoption must demand an IRR of 20% or more in the base scenario, to allow for
negative surprises during the PoC -> Pilot -> Production journey.
Thus, a truly compelling value proposition for a drone solution must involve:
With the launch of the FlytWare Proof-of-Concept package, you can
immediately adopt drones for inventory cycle counting.
Write to us at info@flytbase.com or schedule a call with the FlytWare team.
Positive RoI that can be demonstrated from the labor and equipment
savings alone
Payback period of less than 1 year
TCO that can be reliably modeled, and closely coupled to business
benefits
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ware
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