New York Times writer Rachel Abrams wrote that Walmart is testing drones to enhance their distribution of inventory from their monster distribution centers to their retail stores across the country. Walmart has already been at the forefront of retail automation with their idea of self-driving shopping carts, but utilizing drones in the retail space has created major buzz among competitors. The recent push for advancing technology has been driven by their low-cost competitors, such as Amazon. According to Abrams, Walmart has “committed to spending $2.7 billion on labor, technology, and other investments,” such as improving their e-commerce business. With drone technology, many logistical challenges that come with managing massive amounts of inventory could be addressed.
I think that implementing drones into Walmart’s supply chain is a great idea. They would greatly increase the efficiency of Walmart managing its inventory by automating the cataloging process. Walmart employees currently scan each pallet of goods manually with a hand held device, which costs time and money. By implementing drones, these workers could be used in other areas of the warehouse to address specific issues. According to Shekar Natarajan, the vice president of last mile and emerging science at Walmart, “the [drones] could help catalog in as little as a day what now takes employees about a month.” Drones will not only have a direct impact on warehouse efficiency, but it will also allow workers who would normally be scanning inventory to tend to replacing missing items, take stock, etc. I think that Walmart will permanently install drones in their warehouses to compete with their largely automated competitors, such as Amazon.
On the other side of the argument, implementing drones will inevitably lead to job loss. Phil Wahba from Fortune.com reported that Walmart is cutting hundreds of jobs as of January 10, 2017. While automation in warehouses has directly lead to layoffs, it has not impacted the warehouse workforce. Walmart has fired many regional executives in an effort to invest more in automation and improving warehouse efficiency. It will be interesting to see if Walmart will reduce their warehouse staff once they feel comfortable with their proposed drone program, but for now the workforce is still intact. Cutting costs and eliminating jobs are synonymous terms in today’s retail marketplace. I would suggest that Walmart outline a plan for the near future regarding warehouse jobs; they do not go into much detail regarding how they will use the labor ‘freed up’ from the use of drones. This could lead people to believe that they don’t know if they’ll have a long-term need for them.
Supply chain automation, specifically with the use of drone technology, is an incredible asset to retailers such as Walmart. However, while there are many potential benefits, Walmart needs to outline a specific plan to integrate the existing workforce with the proposed plans for warehouse drone automation. Walmart stated that it will continue assimilating drones into the workplace by applying them in retail stores to enhance the customer experience.