Walmart Tests Using Drones In Its Warehouses To Speed Distribution. But Speed May Not Be the Issue

Walmart has been a leader in technology innovation and application since its earliest days.

But it may be that the reason such forward thinking has not halted its decline relative to Amazon and other ecommerce competitors is that Walmart has attempted to insert the technology into existing processes rather than completely rethinking its model. JL

Rachel Abrams reports in the New York Times:

The drone’s methodical, vertical movements mimic the path of a person in a forklift inspecting labels and inventory. The technology could “potentially” mean fewer workers would be needed to take stock or replace missing items. Walmart is under intense pressure to grow amid competition from Amazon. Walmart has committed to spending $2.7 billion on labor, technology and improving its website and e-commerce business.

Soon, the labyrinthine aisles at Walmart’s distribution centers — stocked high with canned beans, toys and many other products — could also have a low humming sound.

Walmart, the country’s largest retailer, is testing the use of flying drones to handle inventory at its large warehouses, which supply the thousands of Walmart stores throughout the nation. In six to nine months, the company said, the machines may be used in one or more of its distribution centers.

At a demonstration on Thursday at a dry goods distribution center here, a drone moved up and down an aisle packed nearly to the ceiling with boxes, taking 30 images per second. Shekar Natarajan, the vice president of last mile and emerging science, explained that the machines could help catalog in as little as a day what now takes employees about a month.

Walmart applied to the Federal Aviation Administration for permission to begin testing drones last year.

Walmart workers now manually scan pallets of goods with hand-held scanning devices. The drone’s methodical, vertical movements would essentially mimic the path of a person in a forklift who might be inspecting labels and inventory.

While a Walmart employee may handle the drone, the technology could “potentially” mean fewer workers would be needed to take stock or replace missing items, Lorenzo Lopez, a spokesman, said. Mr. Lopez emphasized that those workers could be deployed in other areas of the warehouse.

The test is occurring as Walmart is under intense pressure to grow amid an onslaught of low-cost competition, particularly from Amazon, the online shopping giant. Walmart has committed to spending $2.7 billion on labor, technology and other investments, including improving its website and e-commerce business. Last quarter, Walmart beat expectations with $115.9 billion in revenue, but even Doug McMillon, its president and chief executive, acknowledged that the 7 percent growth of Walmart’s e-commerce business was “too slow.”

The demonstration occurred a day before Walmart’s annual meeting in Fayetteville, Ark.

Walmart is testing its new technology for the next six to nine months as part of its Emerging Sciences and Technology group, which focuses on drones, virtual reality and other technologies to see how they might help improve its supply chain. The company said drones may have other applications, perhaps even in its stores, but did not give details.

The retailer is using 80 supercenters, in addition to its distribution centers, to help fulfill online orders. By speeding up warehouse operations, drones could help address the logistical challenges of managing inventory in so many places.

Walmart operates 190 distribution centers in the United States, and each one services 100 to 150 stores. Millions of items can move through the centers each week and onto a fleet that includes 6,500 trucks and 8,000 drivers to move merchandise throughout the United States.

As boxes zipped along at six miles an hour on conveyor belts in the distribution center here, Mr. Natarajan explained that the drones would be one way to make the Walmart supply chain even more efficient. Walmart already reuses the boxes multiple times, and they are printed with a reminder: “Each box cost the company an average of 75 cents.”