Flying forward: Lessons learned from drone logistics in healthcare supply chains

From the July-August 2025 edition of Supply Chain Management Review.

July-August 2025

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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, making up an increasing global market share (blueweaveconsulting.com/report/india-drone-market). 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. This article examines drone implementations in healthcare supply chains to extract valuable insights for broader commercial applications. We present a comprehensive framework (see Figure 1) designed for supply chain leaders to evaluate the integration of drones, addressing key considerations such as financial and operational costs, potential challenges, and supply chain impacts—including increased flexibility, resilience, and service quality enhancements.

 

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—a centralized location where drones can take off, land, recharge, and load or unload packages. This hub becomes essential for managing the infrastructure, logistics, and scheduling needed to support efficient drone operations.

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 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. While these factors are often overlooked, they significantly affect the speed and effectiveness of implementation. Investing in these relationships early on can accelerate the learning curve, improve operational alignment, and ensure scalability for future drone deployments.

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.

Cost-benefit analysis of drone implementation in supply chains

In this article, we showcase a real-world use case of drone implementation in healthcare supply chains and focus on analyzing the cost-benefit of drone deployment for both short-range and long-range deliveries, specifically within business-to-government (B2G) and business-to-business (B2B) contexts.

As with any strategic supply chain decision related to transportation assets or services, adopting drones must align with overarching supply chain and operational objectives, such as enhancing flexibility, improving customer service, and optimizing delivery times. Key considerations include capital availability, budget constraints, return on investment, breakeven metrics (such as payback period or number of flights), and the organization’s long-term vision to stay abreast of technological advancements.

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.

 

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.

Figure 4 provides an overview of Redwing’s drone delivery cycle.

1. Order placed. A central hub receives an order for medical supplies and prepares the package for dispatch.

2. Flight operations. The drone autonomously navigates to the destination, overcoming challenging landscapes.

3. Proof of delivery. Upon arrival, supplies are delivered directly to healthcare personnel or secure drop points.

4. Return to hub. After completing the delivery, the drone returns to the hub to recharge, establishing a continuous and efficient supply chain cycle.

 

This model exemplifies how drones serve as a logistical lifeline for remote healthcare supply chains, drastically reducing delivery times and ensuring reliable last-mile connectivity. Through our partnership with Redwing, we conducted a cost-benefit analysis to assess drone implementation’s economic and operational impact. The data confirms that drones not only improve healthcare accessibility but also present a scalable model for addressing logistical challenges in other remote regions.

By transforming supply chain limitations into opportunities, Redwing’s drone solutions underscore the potential of drones as a transformative asset in healthcare logistics, offering resilience, efficiency, and expanded reach for regions that need it most.

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.

 

 

Drone adoption models and operational design

Our analysis centers on two primary drone implementation models as follows.

1. Business-to-government (B2G). Focused on long-range deliveries to remote healthcare facilities, this model enables healthcare providers to overcome geographic barriers, facilitating the timely delivery of essential medical supplies.

2. Business-to-business (B2B). Aimed at short-range, high-frequency deliveries within urban areas, this model supports medical supply transport between facilities, bypassing urban congestion and reducing delivery times.

Cost-benefit analysis for long-range and short-range drone solutions

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.

Pre-implementation phase: The pre-implementation phase emphasizes strategic planning to mitigate regulatory, financial, and partnership risks.

1. Regulatory and compliance review. Conduct a detailed review of regional and international regulatory requirements. Engaging with regulatory bodies early ensures compliance with airspace restrictions, certification needs, and other aviation standards. This proactive step helps identify potential roadblocks before operational deployment.

2. Financial feasibility analysis. Assess capital and operational expenditures (CapEx and OpEx) to understand the financial implications of drone adoption. Use tools such as ROI, NPV, and breakeven analysis to determine whether the projected benefits align with budget and strategic objectives.

3. Third-party vetting and contracts. Select reliable technology and logistics partners, ensuring they meet strict security and operational standards. Establish clear contractual terms, including compliance requirements and regular audit clauses, to secure a dependable partnership network.

During implementation: The focus of this phase should be on testing, monitoring, and risk management. During implementation, the focus shifts to real-world testing, data gathering, and operational risk management.

4. Pilot programs. Start with small-scale pilots to test drone operations under real-world conditions. These pilots allow the organization to refine delivery processes, monitor performance, and identify risks specific to different environments (e.g., urban areas vs. remote regions). Pilots also help test for payload capacity limitations and gauge delivery speed.

5. Real-time operational monitoring. Implement systems to track key performance indicators (KPIs) like delivery speed, system reliability, and payload handling in real-time. Active monitoring helps address operational issues promptly, ensuring the drones meet service-level expectations without disruptions.

6. Ongoing compliance audits. Conduct regular audits of third-party providers to ensure they maintain adherence to security and operational standards. This is especially critical in multi-party arrangements, where lapses by one partner could affect the entire supply chain operation.

Post-implementation. The focus in this phase should be on evaluation, scaling, and continuous risk assessment.

7. Performance and financial reviews. Periodic reviews of operational performance and financial ROI help validate the initial cost-benefit projections. Analyze actual CapEx and OpEx against the planned budget to adjust the financial model and improve future investment decisions. The following tools and metrics can be employed:

• Return on investment (ROI): Assesses the potential financial returns from drone adoption, factoring in savings on infrastructure and operational costs.
• Total cost of ownership (TCO): Includes all CapEx and OpEx over the lifespan of the drones, allowing managers to see the full cost picture.
• Breakeven point: Determines how long it will take to recover the initial investment compared to traditional delivery methods.
• Net present value (NPV): Projects long-term profitability by analyzing future cash flows, helping assess drone operations’ sustainability.
• Payback period: Shows the time needed to break even, essential for gauging initial investment feasibility.
• Scenario analysis: Tests different variables, such as demand fluctuations and regulatory changes, to provide robust insights for planning and risk management.

8. Scalability assessment and future planning. Evaluate the feasibility of scaling drone operations based on post-implementation data. Identify opportunities for technological upgrades or process improvements, such as enhancing battery life or increasing payload capacity, to support larger-scale operations and improve cost efficiency.

9. Continuous risk assessment. Regularly reassess regulatory, operational, and financial risks, especially as market dynamics and regulations evolve. This ongoing evaluation allows organizations to adapt their strategies and ensure sustained compliance and efficiency.

SCM implications from Redwing’s drone network: Key takeaways for supply chain leaders

Redwing’s drone network has addressed core supply chain issues within India’s healthcare system, offering valuable insights for broader SCM applications.

• Access to remote populations. Redwing’s drones have extended last-mile connectivity to remote areas where traditional transport faces significant barriers. In these isolated regions, drones provide a reliable delivery method, reducing delays and ensuring critical care supplies reach those in need despite infrastructure or weather challenges.
• Reducing delivery lead times. By achieving speeds up to 10 times faster than road transport, drones have revolutionized the delivery of emergency medications and diagnostic samples. This speed is vital for rural health centers where delayed treatments can have severe consequences.
• Supply chain continuity and efficiency. The consistent delivery of essential supplies via drones helps prevent disruptions in healthcare inventory. By reducing the need for bulk orders, drones minimize the risk of stockouts or overstocking, which helps healthcare providers optimize costs and resources. Real-time tracking further enhances operational precision, reducing CapEx otherwise required for large infrastructure setups in primary healthcare centers.
• Community and economic benefits. Integrating drones has also provided local economic benefits by creating job opportunities. Redwing has trained local youth as drone operators and technicians, promoting economic inclusion and encouraging talent retention in rural areas, thus supporting community upliftment alongside supply chain effectiveness.

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.

While this article focuses specifically on drone technology, the framework can be applied to other emergent technologies. For example, autonomous robots in warehouses or on roads can be evaluated using similar cost-benefit analysis methods. By adopting this best-practice approach, SC managers can assess the alignment of new technologies with both short- and long-term supply chain strategies, using it as a roadmap for pilot and advanced deployment.

As supply chains evolve in complexity, embracing technological innovations like drones will be essential for building resilience and responsiveness. By preparing today, supply chain leaders can position their organizations to thrive in a dynamic, technology-driven future.

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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