The benefits of utilizing AGVs in warehouse operation

Automated guided vehicles (AGV) have been around since the 1950s, first used as a tow truck following a wire in the floor. Since its development, AGVs have advanced alongside the technologies they employ; although, some would say they haven’t advanced quickly enough.

Regardless, the AGV market is expected to reach nearly US$ 2.7 billion by 2022, at a CAGR of 9.3 percent during the forecast period 2017 to 2022, according to a report by MarketsandMarkets. The report attributes growth to advancements in automation, an emphasis on workplace safety, and the growing need to cut down operational costs and increase productivity.

Why warehouses use AGVs

Today, AGVs are a solution to a problem, according to Thomas Kaminski, VP of Mobile Automation at Dematic. “That problem could be a labor shortage, a desire to automate processes, or to increase inventory accuracy. If the AGV can’t solve the pain point for the operation, then the ROI will not happen as quickly.” Compared to many other forms of automation, AGVs are quicker and come at a lower cost to implement. In many cases, the ROI can be in two years or less.

“For companies new to automation, or to AGV automation, implementing an AGV system represents a bit of a paradigm change for an organization. There is a learning curve in automating a process, but one that is easily overcome,” Kaminski said.

Fergal Glynn, VP of Marketing at 6 River Systems, a U.S.-based start-up, explained operators are looking to AGVs to meet high-level demands on accuracy, speed and cost. “Each mistake is expensive, whether it’s a missed pick or missed shipment. And finding the best managers and associates is getting harder each month, as distribution centers are dealing with the tightest labor market in recent years.”

As such, deploying an AGV solution together with other systems such as a robotics control system and warehouse management system can help meet the challenges of warehouse operations. Yonghai Wu, GM of the Mobile Robot Division at Hikrobot Technology, a subsidiary of Hikvision Digital Technology, explained that such a system could bring the following benefits to a warehouse: optimizing warehouse storage through demand analysis of available storage space and automatic shelf adjustments; streamlining warehouse management by supporting inventory business processes, like material requisition and procurement; and gaining total control with flexible management strategies, user-based permission configuration, and warehouse visualization.

Challenges in deployment

Physical environment and management are two major challenges when it comes to deploying an AGV solution in warehouse and distribution facilities.

“Some facilities are more suited to AGV automation than others. Inclines, moisture and other factors can impede an AGV installation,” Kaminski said. Working closely with an AGV supplier during the selection process can help iron out possible issues.

Glynn pointed to deployment time and ongoing management as some of the other main challenges. “Goods-to-person (GTP) AGVs that move pods or shelves around need to be caged off from human labor. Deployment times range from months to close to a year for GTP AGVs. During the deployment period entire sections of the warehouse are cut off and unusable. Operators also worry about all the new infrastructure that comes with GTP AGVs including stickers and special pods.”

Some of these challenges, however, could be overcome by the next generation of AGV manufacturers who are building robots that don’t need wires, cables or stickers to move around, according to Glynn. “The new robots will use state-of-the-art sensors to help navigate in any warehouse without any new infrastructure, making deployment much easier and less disruptive.”

Improving labor productivity

Finding and retaining quality warehouse personnel is getting increasingly difficult; furthermore, seasonal hires take time to train especially when leveraging automation technologies, according to Glynn. “Industry changes are forcing warehouse operators to do more with the same tools and people. Labor shortages across the supply chain industry are making this increasingly difficult, so operators are turning to collaborative robotic warehouse automation,” he said.

“All these factors are causing chaos on the fulfillment center floor as ill-equipped associates try to fulfill more orders, more quickly, to meet increasing customer expectations for faster delivery times,” Glynn explained. “But companies are solving these problems today. It takes a collaborative mobile robot that uses powerful cloud-based software, machine learning and artificial intelligence to get smarter realizing that the workers that are being displaced by AGVs are able to advance to other areas of an operation that are more value added, so the robots aren’t coming for their jobs.”

Instead, one of the largest benefits AGVs can bring to an organization is in replacing non-value labor in an operation. “Often, this labor is reallocated to other areas of a facility for additional savings and value add. The costs for labor include wages, benefits, vacation and costs of attracting, training and retain non-value work be performed by AGV Kaminski said.