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Editor’s Note: This is a guest blog from our friend Jake Rheude with Red Stag Fulfillment. In part 3 of the 3-part series, Jake discusses the New Distribution System and where the industry is headed.

The New Distribution System

Technologies such as RFID tags are already being rolled out and used wherever their application can save money. Other new technologies such as delivery drones have been tested and will be deployed within the next few years. Ordering products will be a different experience for many consumers.


Quick Delivery of a Small, Common Product

Once an automated supply chain is in place, delivery of everyday products is likely to be quick and inexpensive. If a consumer orders a product such as a popular toy action figure, such products will probably be in local warehouses. A picking robot working in an automated warehouse that has such a figure in stock will have the order added to its list. Software will re-optimize the list so the robot makes as few trips as possible. The toy will probably be picked up and placed on a conveyor belt for automatic wrapping, boxing and addressing within the hour.


The conveyor belt will bring the box to a pickup platform where delivery drones pick up packages in sequence. Only local orders go here; the others go to an automated truck loading dock. Since the toy order is local, a drone reads the address, plots a corresponding course and takes the package to its destination. Later that day the customer comes back from work and finds the package in the designated landing area by the back door. The customer retrieves the box and the toy is ready for a child’s birthday the next day.


Ordering an Unusual Item

Often customers order items online that they can’t find locally. If a customer orders an unusual item, such as binoculars, it probably will not be in a local warehouse. When the customer places the order on line, the supplier will already know where the closest product is located and will automatically put a hold on it.


Once the customer’s payment has cleared, the supplier will place the corresponding order which may be in a warehouse 500 miles away. The packaged order is routed to the automatic truck loading dock and a driverless truck picks up the order later that day. The truck drives overnight to the urban center nearest the customer and is automatically unloaded.


The customer lives about 30 miles away so the order is automatically loaded onto a delivery van for local deliveries. These vans are similar to existing delivery vans and they still have a driver. Local road networks are too complicated and too full of obstacles for autonomous vehicles to function reliably. The driver and van leave the warehouse in the morning and eventually the driver reaches the customer’s neighborhood.


The driver finds a safe parking area and folds down the rear door of the van to create a small launch platform. The deliveries have been loaded, grouped by neighborhood and in sequence. He takes the first package, places it on the platform and places a drone over it. The drone reads the address, plots a course to the customer’s designated landing area and takes off. A few minutes later the dozen or so drones have left, the first on a delivery that is the furthest and the last on one that is close by. About five minutes later, all the drones have returned and are stowed back in the truck. The driver proceeds to the next neighborhood several miles down the road. He has completed a dozen deliveries in about one-fifth the normal time.


The customer looks out on the balcony and finds the drone has left the package in the designated landing area there. Delivery has been quick and to a secure location.


Drivers of New Distribution Technologies

Three factors are driving the adoption of new distribution technologies. Proponents expect that these technologies will save money, allow more rapid deliveries and be more convenient for customers. The scenarios detailed above show that all three expectations could be realistic. The technologies discussed are ready for implementation and the cost structures are known. When customers can choose suppliers that have lower costs, quicker deliveries and deliveries to designated locations on their property, they will buy from those companies. Other suppliers will have to adopt the same technologies or go out of business. The future of distribution is likely to include these technological innovations.


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