Wal-Mart’s drone at a distribution center highlights efficiency

June 10, 2016 04:39 PM

(Bloomberg)—Inside a 1.2 million-square-foot Wal-Mart Stores Inc. distribution center near its headquarters, a buzzing sound—like a swarm of bees—comes from an aisle of shelves laden with merchandise from diapers to microwaves.

Flying up and down the seemingly endless aisle is a drone with a custom-built camera that takes 30 pictures a second. The aircraft is capturing images of every item to make sure it’s placed in the appropriate spot on the shelves so employees can quickly find it when it’s needed by a store.

Wal-Mart recently demonstrated the technology to reporters as part of an effort to showcase how it’s using technology to maintain the efficiency edge that helped the company become the world’s largest retailer. Wal-Mart is No. 4 in the Internet Retailer 2016 Top 500 Guide. Keeping its operations lean and effective—in part by making sure that the right items get to the right stores—is even more important for Wal-Mart as shoppers restrain spending in an uncertain economic environment and online rivals lure away customers.

When the drone finds an item in the wrong slot, an employee at an “air traffic control” center will see a red mark on a real-time computerized map of the rack and send a worker to move the misplaced item. Scanning all of the shelves in the center takes two employees one month to do manually. The drone can complete the task in an hour. The job also is dangerous for humans, requiring them to ride a lift several stories into the air to reach the top shelves. The drone doesn’t even need a pilot.

Still testing

The distribution-center drone is still in testing and will be for at least six to nine more months, said Shekar Natarajan, a Wal-Mart vice president who handles emerging technologies. But it’s one of the early ways Wal-Mart sees drones playing a role in its logistics network, which includes more than 100 distribution centers and roughly 4,500 U.S. stores. The Bentonville, Arkansas-based company wouldn’t discuss any other specific drone projects in the works beyond tracking inventory.

Wal-Mart asked the U.S. Federal Aviation Administration last year for a waiver to test drones outdoors, with a goal of eventually using them to deliver goods to consumers. The company also wants to use drones to assist with tracking merchandise, such as taking inventory of trailers outside its distribution centers, according to the FAA filing.

Companies such as Inc. (No. 1 in the Top 500) and Alphabet Inc. have been testing drones designed to deliver small packages to people’s homes, a concept that both have said is still years away. While the FAA is finalizing regulations to allow more widespread commercial drone flights, it must craft an entirely new set of rules permitting the long-distance, robotic flights required for deliveries.

Wal-Mart has been trying to play catch-up with Amazon in delivery, opening a new network of online fulfillment centers to speed shipping times and testing a subscription shipping service similar to Amazon Prime. It has also been pushing in-store pickup, where customers can order items online and have them ready for pick up at their local Wal-Mart.




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