Physical AI Rewrites the Economics of the Backorder

A warehouse system can call an item in stuck when it isn’t. That gap is a backorder, an order the company accepts for a product it can’t ship. Each backorder delays the sale and raises the odds the customer cancels. GNC was logging several hundred a day before it changed how often it checked its shelves.

GNC’s daily nonshipments, items the system shows in stock but can’t find, dropped from several hundred to about 98, drone-industry blog DroneXL reported Saturday (June 27), after the retailer deployed autonomous drones from Corvus Robotics across its distribution centers.

GNC’s inventory accuracy has improved tremendously since deploying the drones, Bill Monk, the company’s vice president of distribution, told Logistics Management last April. “With the millions of dollars of inventory that we have inside the four walls of the facility, getting that accuracy really starts with our receiving, putaway and reserve storage operations,” Monk said.

The company tracks “non-ships,” its term for the same metric, and works to keep that figure fewer than 100 units across its full catalog of more than 3,000 SKUs. In Indianapolis alone, the drones now count nearly 31,000 locations a month, Monk added.

Autonomous Drones Cut Inventory Errors

Warehouse robots have historically run fixed routes and stopped working the moment something unexpected crossed their path. That’s changing. PYMNTS reported that newer systems can adjust to real-time conditions and feed data into planning platforms continuously, instead of running on a fixed audit schedule. GNC’s drones are a working example of that shift.

The system runs two separate AI workloads, Corvus Robotics Founder and CEO Jackie Wu told DroneXL. One runs onboard the drone, handling navigation and obstacle avoidance. The other runs on the data the drones bring back, helping GNC staff prioritize which discrepancies to chase first.

One drone flagged 600 boxes at a reserve location, DroneXL reported. GNC’s system recorded only 60 at that same location. A staff member had mistyped a box dimension into the database months earlier, and the error went undetected because no one had counted that aisle since.

GNC now audits about 2% of the drone’s reports to confirm accuracy. Two years in, the level of accuracy has been high, DroneXL reported. Earlier, the inventory team was heavily manual and faced chronic turnover, with monotonous work and undesirable shifts that sometimes meant hunting for a single misplaced pallet among 2,000 pallets. Tammy Lacher, a senior specialist in inventory control at GNC, told Business Insider that the drones now handle inventory counts, allowing her team to focus on investigating discrepancies.

Continuous Inventory Monitoring Spreads Across Global Warehouse Operations

DHL Supply Chain runs more than 7,500 autonomous warehouse robots across 220 countries, PYMNTS reported in January. More than 90% of its warehouses have at least one automated solution. The company relies on machine-learning systems to predict inventory discrepancies, labor risk and delivery bottlenecks before they surface. Other models flag inventory locations most likely to have discrepancies, prompting earlier intervention by managers.

Swiss eCommerce logistics provider MS Direct deployed a picking robot from Sereact at its largest fulfillment center, according to a separate PYMNTS report last week. The robot handles roughly 1,500 single-item orders a day and runs through the night, work the warehouse previously couldn’t automate because its 60,000 SKUs overwhelmed earlier robots. The deployment paid for itself in about nine months.

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