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Drones Are Winging it in the Warehouse

In the retail realm, drones have been associated almost exclusively with the last-mile delivery, with pilot launches across Amazon, Walmart and Walgreens all making inroads in 2022. But the next frontier for drones could enhance efficiency across the supply chain—without having to leave the warehouse.

Gather AI is putting a different spin on drone technology that could prove very valuable to retailers struggling with excess inventory, misplaced stock and chronic understaffing. The Pittsburgh company uses drones to automate the inventory tracking processes inside warehouses.

According to the company’s customer data, the drone-powered inventory counting system operates at a rate 15 times faster than traditional human cycle-counting processes, with Gather AI co-founding CEO Sankalp Arora reporting that one customer cut its full inventory-taking cycle from an average of 90 days to just 2.5.

The company’s technology also keeps goods in warehouse employees’ line of sight, helped find 25,000 lost pallets and doubled sales for clients in 2022, scanned eight times more pallets than it did in the year prior and grew revenue eight times over.

A single drone—which is equipped with a camera as well as lights to operate in the dark—can cover anywhere from 300 to 350 pallets per hour, according to Arora. A fully charged battery powers up to 25 minutes of flight before an employee must take 60 seconds to swap out the power pack, otherwise the drone can recharge at a docking station in 45 minutes. Facilities that take inventory once per month typically use a single drone, while sites counting stock at least once per week may house up to three drones, Arora said. The technology, adaptable to warehouses of varying sizes, is operating in facilities with as many as 50,000 pallets and others with as few as 2,800.

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Gather AI is currently operating in 16 warehouses for businesses in third-party logistics, retail, apparel, medical supplies, air cargo, and food and beverage. Arora said that all customers that currently operate more than one warehouse have deployed Gather AI’s drone technology in multiple facilities.

The “AI” in Gather AI comes from the company’s proprietary machine learning engine, which powers the back end, enabling the aerial craft to detect and aggregate data like box damage, case counting, volumetric estimation, text reading and inventory of palletized goods.

Arora told Sourcing Journal that the apparel brands that Gather AI works with have high SKU counts, incentivizing the companies to ensure that they don’t inaccurately displays out of stocks online. To mitigate these concerns, these brands also use the drone technology to improve warehouse utilization rates so that they are getting the most out of their facility—while generating the most revenue out of their merchandise on hand.

“Given there is more pressure to not miss out on the sale, you want to maintain your stock diversity, while your warehouse utilization was at 90 percent, just because you didn’t want to overburden your warehouse,” said Arora. “Now that you have real-time feedback of what’s sitting where, you can get that number up to 98 percent or 99 percent utilization without losing the battle to maintaining SKU diversity—all while getting those revenue numbers in.”

Warehouse staff use an app on a tablet device to determine the locations the drones will scan, before the aerial vehicle flies autonomously and collects images, which are then converted into inventory data via the Gather AI software. The technology, which can function without Wi-Fi, gives staff an inventory report in real time. Users can share collected data with other areas of their organization when the tablet is back online.

A view from the drone, with data reported back to Gather AI' warehouse dashboard.
A view from the drone, with data reported back to Gather AI’s warehouse dashboard. Gather AI

The technology also aims to relieve the physical stress that a warehouse worker’s job often implies, noting that staff are often climbing ladders with barcode readers in their hands, and even notebooks in some cases, to manually monitor inventory. In other scenarios, they are operating heavy machinery like forklifts and scissor lifts, both of which are tied to inherent safety risks on the job.

“This is part of the problem that we are solving—how can we make that process such that it is as simple as searching something in Google and provide that visibility to our customers?” Arora said. “Because the process is slow and given the heights involved, a bit unsafe. And couple that with a labor shortage and 70 percent attrition rates in this industry and as a result of that it is very difficult for our customers to follow standard operating procedures.”

Gather AI customers have reported additional benefits including cutting warehouse management system (WMS) error rates from 11 percent to 3 percent in three months, and saving between $250,000 and $350,000 by improving putaway efficiency.

“Instead of your warehouse management system saying this location is empty only for someone to go out there and find it’s not really empty, you can just look up our dashboard and view a photo, which will show whether the location is actually empty,” Arora said. “You can go there with confidence. And that itself is in some cases three-to-five shifts worth of work saved per day. In other cases, you just get to meet more orders, because you know exactly where each product is sitting. If you’re looking for a size 7 shoe of a specific type, you can go get it.”

In October, Gather AI raised $10 million in a Series A round led by Tribeca Venture Partners with participation from Xplorer Capital, Dundee Venture Capital, Expa, Bling Capital, XRC Labs and 99 Tartans.

One of Gather AI’s clients, Barrett Distribution, operates more than 3.5 million square feet of shared and dedicated warehouse and fulfillment centers for numerous clients across apparel, automotive parts, consumer electronics, footwear, medical devices and more.

“Gather AI’s solution has helped us to better serve our DTC and omnichannel e-commerce clients across the Barrett nationwide fulfillment network,” Bryan Corbett, vice president of marketing and business development for Barrett Distribution, told Sourcing Journal. “Any technology that increases inventory efficiency and accuracy is a win-win for Barrett and our high-value clients. Greater inventory visibility within the Gather AI solution also improves item location accuracy which results in on-time fulfillment and delivery—the backbone of all e-commerce fulfillment.”

Maersk shores up warehouse inventory management

Like Barrett Distribution, ocean freight giant A.P. Moller-Maersk recently hopped on the drone bandwagon to tackle inventory management inside its own warehouses.

Last month Maersk said it partnered with another drone-powered inventory tracking system, Verity, to gain greater insight into its facilities in areas people can’t easily reach.

“As a supply chain integrator, we are constantly looking for new innovations and engineering solutions in our warehouse operations,” said Erez Agmoni, senior vice president of innovation and strategic growth for Maersk North America, in a statement. “We wanted to deploy a safer, more accurate, data-driven inventory solution that addressed our decarbonization goals for customers and prevented our workforce from working at heights. Verity’s system has delivered data accuracy, safety and speed which makes our warehouse management system stronger, faster and more effective for customer decision-making.”

Verity says its warehouse drones navigate from pallet to pallet, and can collect inventory data in three dimensions by scanning barcodes at any height using onboard, high-resolution cameras.

The drones take photos of SKUs on pallets to identify inventory errors, such as missing or misplaced pallets. Once the data is collected, the system compares the findings with data stored in Maersk’s WMS and then distills that information into insights delivered directly to users via the user dashboard. The results are designed to be shared in the cloud, providing actionable warehouse data for supply chain leaders.

The system requires one day of operator training, and the electric-powered drones return to the battery charging pad when necessary, operating on nights or weekends and without requiring facilities staff to keep overhead lighting turned on.

Drone delivery still up in the air

As the use of drones catches on across the business-to-business supply chain, the technology is still struggling truly take off outdoors when it comes to delivery, even as the pilots pile up.

Amazon’s delivery ambitions have been stalled in a pilot phase since the Federal Aviation Administration (FAA) gave the company the go-ahead to trial drone delivery in late 2020. But a CNBC report last month indicated that the e-commerce giant’s drone delivery unit underwent significant layoffs as part of the 18,000 jobs Amazon cuts, perhaps an indicator of where the tech falls in the company’s priority list.

Despite the apparent setback, Amazon is still conducting drone delivery tests in its two initial markets—College Station, Texas, and Lockeford, Calif., and has said it will gradually expand deliveries to more customers over time.

Another tech company is trying to help drone delivery appeal to a wider audience by deploying smart mailboxes in front of consumers’ homes. Dronedek aims to complement the drones themselves by leveraging its platform-agnostic mailboxes to consolidate and funnel deliveries from all carriers, couriers and logistics services through GPS-verified locations.

Unlike many other drone-related offerings, Dronedek is designed to alleviate the stress that comes with delivering a product in plain sight when the recipient isn’t home to quickly collect the package and thwart any potential “porch pirates.”

“A major problem with current deliveries is that for it to be secure, someone has to be there to receive it,” said Dan O’Toole, founder and CEO of Dronedek, in a statement. “You shouldn’t have to be present for your deliveries in order to have peace of mind, that’s where our smart mailboxes step in.”

Dronedek's first demonstration
Dronedek’s first demonstration Courtesy. Photo by Shaun Walling

The smart mailboxes are built to mind temperature-sensitive packages, alert users to package arrivals or pickups, recharge drones and other electrical devices, and in times of need, can even serve as an alert to emergency response services.