Applying lessons learned from healthcare drone logistics to other supply chains

Healthcare supply chains face unique challenges in getting supplies to remote and hard-to-reach areas, particularly due to geographical barriers, poor infrastructure, and frequent stockouts at local healthcare facilities. Traditional transportation methods can prove slow and unreliable, especially when mountainous terrain or adverse weather conditions block road access, delaying access to critical medical supplies. Drones address these challenges by providing faster and more reliable deliveries, significantly reducing response times, and ensuring a continuous supply of essential medicines and vaccines.

In Kenya, a partnership between the Elton John AIDS Foundation, Zipline, and Kisumu County has successfully used drones to deliver vital medical supplies to remote communities, dramatically cutting delivery times. A drone can cover a 12-kilometer distance in just 20 minutes—compared to up to five hours on foot or an hour by vehicle—demonstrating the life-saving potential of this technology. Similarly, in India, in the state of Arunachal Pradesh, drones have revitalized defunct healthcare facilities and minimized environmental impact by reducing CO2 emissions without the requirement of extensive road infrastructure. While drones are often associated with military applications, their potential to enhance civilian supply chains is undeniable, especially for critical, time-sensitive deliveries.

The global civilian drone market, valued at around $24.98 billion in 2023, is projected to reach $65.49 billion by 2030. India's civilian drone market, worth approximately $1.2 billion in 2023, is expected to grow to $4.87 billion by 2030. While supply chain professionals understand the costs and service implications of traditional modes of transportation, recent research reveals the primary barrier to broader drone adoption is the ambiguity around the financial implications of drone operations (Garg et al., in Drones in last-mile delivery: A systematic review on efficiency, accessibility, and sustainability, Transportation Research Part D: Transport and Environment).

Due to the nascent and innovative nature of the industry, there needs to be more knowledge about the process of implementing drones into supply chains and the challenges and best practices related to this process.

Figure 1: Framework for Drone Adoption

Framework for drone adoption

In evaluating drone integration into supply chains, two primary models emerge: partnering with a drone service provider or purchasing and operating drones outright. In the first, more common model, businesses like Walmart or healthcare facilities collaborate with service providers such as Wing, DroneUp, or Zipline, who manage drone operations from end to end. This partnership model allows companies to adopt drone delivery with minimal upfront investment, as the provider operates out of its own hubs or regional facilities, taking responsibility for logistics, scheduling, and regulatory compliance.

The second model, direct drone ownership, is less common due to the complexity and emerging nature of drone technology. Here, the business purchases drones and works directly with the manufacturer or a third-party integrator. Unlike the service provider model, the customer typically must establish and maintain its own drone hub.

In both cases, decision-makers assess the total cost of ownership (TCO), balancing capital expenditure (CapEx) and operational expenditure (OpEx) against the potential benefits drones bring to supply chain efficiency, flexibility, and resilience. By carefully considering the appropriate adoption model and, if necessary, establishing their own drone hubs, businesses can leverage drone technology to enhance service levels and respond dynamically to supply chain demands.

Total cost of ownership of a drone implementation solution

Adopting drones in a supply chain requires a thorough analysis of both CapEx and OpEx, which together form the TCO for the implementation.

Figure 2. CapEx and OpEx breakdown at a drone hub.

Figure 2 outlines the key expenses involved in establishing a drone hub, such as drone acquisition, infrastructure, and ongoing operational costs. Regardless of whether a company chooses a drone service provider model or outright drone ownership, the costs—both direct and indirect—must be carefully evaluated to understand the financial and operational implications of drone integration.

In the drone service provider model, the customer pays for CapEx and OpEx as part of a recurring monthly fee, allowing them to spread these costs over time rather than facing a large initial investment. This model is advantageous for businesses that prefer to avoid CapEx ownership and benefit from a shared network setup. Here, drone capacity is distributed among multiple customers, lowering individual costs and increasing network efficiency, as drone providers manage and maintain the operational hubs.

On the other hand, the outright drone purchase model involves a more substantial initial commitment. The customer invests upfront in CapEx to acquire and set up drones, along with signing an annual maintenance contract (AMC) to ensure ongoing support for the infrastructure. Additionally, monthly OpEx costs cover operational aspects such as battery replacements and utilities. This model is ideal for organizations seeking exclusive control over their drone network, offering full autonomy over operations, which aligns well with long-term strategic objectives, particularly when customization or specific regulatory control is essential.

Beyond these tangible costs, it is vital for organizations to account for intangible costs associated with establishing and maintaining relationships with drone providers or integrators. Relationship-building expenses can vary depending on the vendor’s expertise, the customer’s familiarity with drone technology, and the organization’s technical capabilities.

By considering both tangible and intangible costs, as well as selecting the right adoption model and operational setup, supply chain leaders can effectively leverage drones to drive efficiency, flexibility, and resilience within their logistics networks.

Use case: Overcoming healthcare access challenges with drone operations

India’s healthcare infrastructure faces significant challenges, especially in remote and underserved regions where access to medical facilities is limited. In collaboration with the Association for Scientific and Academic Research, Redwing developed heatmaps that highlight these accessibility issues nationwide. Figure 3 illustrates areas in red, marking locations where road access to a healthcare facility takes over 60 minutes due to rugged terrain or inadequate infrastructure. In such regions, timely healthcare access is a critical necessity.

Figure 3. Healthcare accessibility heatmap in remote regions of India

Redwing deployed autonomous drone networks to bridge this gap, transforming healthcare access in some of India’s most challenging regions, such as Arunachal Pradesh and Odisha. By delivering life-saving medications, vaccines, and collecting diagnostic samples directly to and from remote communities, Redwing’s drones bypass logistical obstacles like mountainous terrain and poor road networks. In areas where a road journey might take several hours, drones can complete the same delivery in just 20-40 minutes, ensuring rapid access to essential medical supplies.

Framework for evaluating drone use cases in healthcare supply chains

For supply chain managers to assess the viability of drone deliveries effectively, we present a structured framework that considers both capital and operational costs in relation to anticipated benefits. Tables 1 and 2 illustrate this framework for short-range and long-range flights, providing an analysis of key cost drivers and benefits, which helps decision-makers align drone technology with strategic and financial objectives.

Tables 1 and 2 provide detailed cost-benefit analyses for long-range and short-range applications. We identify the key drivers of costs and benefits (and associated assumptions) and then assess each driver based on actual data accessible to one of the authors or data derived from publicly available sources. For the long-range B2G model, the analysis highlighted the benefits of reduced infrastructure requirements and minimized patient travel, making drones a cost-effective option in remote healthcare logistics. For the short-range B2B model, the benefits include labor savings and improved delivery speeds in dense urban environments where traffic congestion is a significant barrier. There are other intangible benefits beyond what this study highlights such as reduced environmental impact, increased skill level in populations that adopt it, reduced road congestion etc.

 

 

Implications for supply chain leaders

The framework presented here enables supply chain leaders to evaluate the cost-benefit dynamics of drone implementations comprehensively. Our findings suggest that drones are particularly valuable in B2G healthcare applications for remote areas, reducing costs associated with infrastructure and patient access. In B2B urban applications, drones effectively reduce labor expenses and mitigate traffic delays, making them ideal for high-frequency deliveries in densely populated regions.

In the B2G model, healthcare providers often initiate pilot projects to gather preliminary data, refine cost estimates, and assess scalability in specific markets. Over time, these pilot projects can expand, integrating drones as a core component of last-mile logistics to improve speed, cost efficiency, and service reach.

A best-practice guide for supply chain managers: Implementing drone operations

Implementing drone technology in supply chains presents unique risks and operational challenges that supply chain leaders must address proactively. This best-practice guide provides a structured approach to help mitigate risks across all stages of drone implementation: pre-implementation, during implementation, and post-implementation. By focusing on regulatory, operational, and financial considerations, supply chain managers can integrate drones deliberately and resiliently into logistics operations, with a keen eye on assessing key financial metrics.

Figure 4. Best Practices for Drone Implementation in Supply Chain

Building a future-ready supply chain with drones

Looking forward, supply chain managers must consider how drones can integrate into and reshape their logistics networks. Drones facilitate decentralized distribution models and enable faster delivery routes, proving especially valuable in reaching underprivileged or underserved populations. The framework and best practices presented here equip SC managers with the foundational knowledge to start preparing for drone integration now—through pilot programs, strategic partnerships, and early investments in drone-compatible infrastructure.

About the authors

Rishabh Gupta is the co-founder of Redwing, an autonomous logistics company that develops, manufactures and deploys drones for instant delivery.

Vipul Garg Ph.D. is an assistant professor of supply chain management at the Texas A&M University-San Antonio in the College of Business. His research interests include service operations, sustainable practices, and decision-making using emerging technologies.

Ila Manuj, Ph.D. is an associate professor of supply chain management at the University of North Texas, Denton. She has more than 20 years of academic and industry experience conducting applied supply chain research in consultation with companies.

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