The days of workers roaming around the warehouse with a scanner gun are over at GNC’s distribution centers. The health and wellness retailer is tapping cutting-edge drone technology from Corvus Robotics to automate and speed up inventory tracking.
Also known as a cycle count, this essential back-end operation is how retailers verify the quality and quantity of the physical goods in their warehouses. In the past, workers did this manually, and the process could be slow, labor intensive, and error prone.
In theory, warehouse management systems (WMS) should provide accurate inventory information based on their record of what has come in and out of the facility, but in reality there is a significant margin of error. According to a report from the Auburn University RFID Lab, the average inventory accuracy rate among US retailers is around 65%, meaning more than a third of their data is incorrect.
The challenge is that cycle counts take time and manpower, and for GNC it was hard to keep up under the old system.
“Our goal was to count it once a quarter,” Bill Monk, VP of distribution at GNC, told Retail Brew. “Some quarters we achieved that. Some quarters we did not.”
Keeping count: This kind of lag time can sometimes create problems downstream of inventory, in which retailers find themselves running blind when they are trying to locate an item that hasn’t been counted yet.
“If you haven’t gotten to an area and you need to take that order, there’s sort of this fire drill where everybody’s running around and trying to find that item,” Corvus Robotics CEO Jackie Wu said.
Most of the time, the item is somewhere in the facility, Wu added, but it’s not in the right location or the quantity is wrong. “So these discrepancies are typically not caught for months,” he said.
In some cases, Monk explained, problems can begin as early as when a product first enters the warehouse. “If they receive something incorrectly, it can throw off everything that you do from that point forward,” he said.
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In the case of a slow-moving product, these problems could sometimes go unnoticed for months if there wasn’t a timely audit.
Flying high: That’s where more consistent inventory tracking comes in, and under the new system, Corvus’ AI-powered drones complete a full cycle count at least once a month, and sometimes more frequently depending on the efficiency of the drone.
The aerial drones are fully autonomous and use 3D maps of the warehouses to navigate the shelves without hauling out large equipment. The fact that Corvus drones use heat maps was a big part of their appeal, according to Monk.
He explained that this technology allows GNC to capture volumetric data about inventory without having to bring pallets down from their shelves using heavy duty equipment.
This helps address situations where an item might have been taken out of a pallet without impacting the stack’s overall dimensions, which Monk described as being like taking a scoop out of the side of a hill without impacting the hill itself.
Since implementing the drones, GNC’s inventory control staff has been reduced from 20 employees to 13, and those redeployed workers are now focused on more productive tasks.
“Our staff actually appreciate them, because it’s not the funnest job,” Monk said. “It’s one of those jobs that you have to do.”
Wu said these capabilities are well suited to the needs of retailers at the moment, as many try to optimize their operations to cut costs and drive sales. “Just-in-time inventory is making a comeback, and just-in-time inventory checking is also making a comeback,” he said, and drones allow retailers to “squeeze more out of their inventory.”