Can Warehouse Drones Replace Costly, Inaccurate Cycle Counting?

Cycle counting is an essential part of inventory management – and a significant cost center most warehouses wish they could do without. On a recent episode of the Unboxing Fulfillment podcast, Jackie Wu, of Corvus Robotics, and host Chad Warzecha discussed the drawbacks of cycle counts and the benefits of using warehouse drones for automated inventory management.

For warehouses relying on cycle counting and physical inventories, Jackie offered some interesting insights.

“Cycle counts are a must, but the accuracy of these manual processes is imperfect.”

An alarming percent of inventory in a warehouse in unaccounted for, Jackie says.

Throwing more people at the problem isn’t the answer because with human workers, there is always human error. Warehouse drones can be a godsend especially in facilities with inventory located high up in racks. The inventory accuracy Jackie has seen using drones is 98-99%.

“Companies overlook the cost of everything coming to a stop for cycle counts.”

The cost of bringing in temps and paying overtime is the most overt pain of cycle counting and physical inventories.

These costs are compounded by the cost of lost productivity when operations stop and associates can’t fill orders or put new shipments away while inventory is being manually counted.

In contrast, drones work after hours or can be programmed not to interfere with associates’ work. Inventory can be counted without any impact on productivity. The speed and non-invasive nature of drone counts also means inventory can be counted more frequently – daily for many companies, Jackie says.

“Drone reporting makes organizations move faster as a whole.”

Periodic cycle counts are quickly outdated, but drone fleets can be deployed continuously and inventory levels updated constantly. With drones you can generate daily reports that used to be done weekly or quarterly, Jackie says.

Warehouse drones are able to collect data faster and share it immediately – for instant impact. “The reporting that we're generating is leading to improvements in productivity across the facility,” he adds.

In data-driven operations, Jackie has observed other automation solutions and processes benefiting from the information received from drones in real time. In this way, he says drones are compounding the return from organizations’ technology investments.

“Warehouse drones are a force-multiplier in making people more efficient.”

Drones relieve warehouse associates of the mind-numbing task of manually counting inventory, while also boosting accuracy 20-30%.

As warehouse drone use catches on, Jackie predicts labor for cycle counting will be reduced and redeployed. “You can use your existing team or just a handful of people. Those people, instead of looking at 2,000 locations, will be looking only at the 70 locations that are flagged as having problems by the drones.”

“Drones found a $60,000 part that was missing for six months.”

Many of the benefits of using warehouse drones aren’t always captured in the ROI. Jackie says drones completing daily warehouse scans have produced many anecdotes of lost inventory found here and there around the warehouse.

“Drones are a viable solution for the 98% of warehouses today.”

With only about 2% of warehouses fully automated today, drones have the potential to spawn an industrywide inventory shape-up.

A wide range of facilities stand to benefit from using warehouse drones to manage inventory. Jackie reports that Corvus Robotics drones operate in warehouses as small as 25,000 square feet and as large as 1.1 million square feet.

He also points out that, compared to other technologies like a $1 million AS/RS or a $10 million robotic system, drones are relatively cheap. “Autonomous drones are one to two orders of magnitude cheaper than something like auto store,” Jackie says.

Through a robots-as-a-service-model, drones are financially accessible to small fulfillment operations. And they pack a quick return that appeals to companies with tight budgets or boards with tight purse strings. Jackie says ROIs of six to twelve months are common.

Work with a 3PL that uses warehouse drones and robots to increase productivity and inventory accuracy

Staci Americas Fulfillment is using warehouse drones and robots to help customers keep a pulse on their products spread throughout Staci Americas' national fulfillment warehouse network. To find out how high you could raise the accuracy of your inventory management, talk to an Staci Americas Fulfillment specialist.