Rick Rys of ARC completed some detailed research on drones. The following article is based on an interview with Rick. This interview focused on supply chain and manufacturing applications surrounding drones.
Banker: Rick, let’s start with a review of the regulatory environment. Where do we stand?
Rys: Drone technology has gained traction very quickly. This caught regulators unprepared to deal with some of the real risks that come with this technology. Just last week the FAA part 107 rule made it easier to start a commercial drone business. Europe is still developing drone regulations, making it difficult to start commercial drone operations there. In the US, it is now required for all drone users, including hobbyists, to register drones weighing over 250 grams – a bit over half a pound. A drone can’t fly higher than 400 feet and can only fly during daylight hours.
Drone use is restricted to visual line of sight. This means companies like Amazon, who have explored using drones for delivery, cannot use the FAA part 107 rule. Amazon and others will not find it all but impossible to use drones for fulfillment until drone traffic control is developed and FAA figures out how to regulate that.
Banker: I think, despite all the publicity Amazon was getting, that was going to be a very difficult business case to be able to do deliveries cost effectively.
Rys: But drones have been used inside large warehouse buildings to measure inventory using barcode, Q-code, RFID…and other Internet of Things techniques.
Banker: Yes, I know PINC Solutions has drone solutions for this purpose (Robots and Drones in the Warehouse). Rick, in your research, what are some other promising supply chain or manufacturing applications for drones?
Rys: Some of the biggest application areas for drones include agriculture, mining, land surveying, media and entertainment, and inspecting infrastructure such as roads, bridges, buildings, cell towers, wind turbines, pipelines, and power lines.
Mr. Rys has Used Drones to Provide Data to Improve Wind Turbine Product Development
Banker: Can you get a bit more specific? How would they be used in farming for example?
Rys: In the US, there are 880,000 hectares of cropland. Across this vast expanse, drones can be used to record time-series growth with photos, inspect plant health, inspect insect damage, inspect fungus damage, and inspect frost damage using multispectral images. Drones can measure water content of soil. These data can be used to optimize fertilizer, pesticide, and irrigation with huge productivity benefits.
Banker: At ARC’s forum in February, Jan Theisen of AGCO corporation spoke. AGCO is a manufacturer of farm equipment. Jan is the Director Global Purchasing at AGCO. One of the things Jan mentioned is that farmers were using drones in conjunction with smart tractors to improve yields. So there is a bit of a value chain aspect to the use of drones in agriculture.
Do any of the other commercial applications you mentioned have manufacturing or supply chain implications?
Rys: Well drones can be used to inspect cell towers, wind turbines, and other tall structures. These towers require periodic inspection. For humans to inspect wind turbines, would require a minimum of two people and climbing certification. In these types of inspections, drones could offer huge labor savings and obvious safety benefits.
In oil & gas, some oil companies or the drone service companies they use, have gotten FAA exemptions that allow the drone to be operated outside of line of sight in remote locations, so drones are being used for pipeline inspections in a way that improves cost effectiveness.
Banker: From a supply chain network perspective, and where companies locate factories and warehouses to cost effectively serve their customers, are there any potential applications? I’m assuming companies would still need to use network design tools, but once that preliminary analysis is done could drones play a role?
Rys: Sure. Drones are ideal for land and building assessment and inspection. It is becoming standard practice to include drone photographs in real estate sales listings. Recent software developments can create 3D models of buildings, equipment, or whole facilities using algorithms that extract a wireframe model from a large collection of overlapping photos taken by a drone.
Banker: Uh-oh. That sounds like it could cause problems for manufacturers. I could see a competitor doing that kind of work to get insights into the company’s capabilities.
Rys: Yes, but there are companies that have developed drone detection services to counteract this. The company, DroneShield, was recently hired to provide drone-detection services near the Boston Marathon and came equipped with special net guns to capture any unmanned aerial vehicles violating a ban along the race course.
Banker: Thanks Rick, some really interesting research. I understand you are going to put a panel together on this topic at ARC’s Industry Forum in Orlando this coming February. Good luck with that.