Logistics and AGVs: Ready for Primetime Beyond a Proof of Concept

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Logistics companies must enhance eCommerce throughput with robotics.  When COVID struck, global populations locked down, and brick-and-mortar stores closed, consumers became increasingly reliant on digital retailers. This sudden increase in eCommerce demand presented new challenges for online retailers. 

The ability to fortify fulfilment systems to meet surging demand became paramount.  Few could find the necessary staffing in an impacted labour market to keep pace.

Solving these problems while also increasing throughput, accuracy, and flexibility for eCommerce fulfilment centre with AGVs has allowed companies globally to mitigate chronic labour shortages and improve worker safety and maximize accuracy and throughput with robot and human collaboration.  Logistics companies can utilize artificial intelligence and machine learning to ensure optimum efficiency as well as scale robots intelligently without making a significant capital investment.

Most logistics companies tend to opt for high-rack storage solutions. In order to evolve in this confined environment, the manufacturers of AGVs must therefore offer compact and functional robots which are able to move vertically and carry heavy loads.

Proof of Concept AGV Testing

Often multiple-site distribution centres (DCs) start with a proof of concept (POC) to test the merits of AGVs.  Interestingly there are reasons why DCs do not continue AFTER participating in POC solutions.

  1. The System, even though easy to install, does not meet throughput expectations.
  2. The System requires major changes to the operation of the most important function, the efficient movement of product.
  3. The System has difficulty in scaling from POC to day to day operations.

More often than not, DCs choose not to participate in a POC trial.  The main reason the opt-out of this “tip-toe” “see if it works” approach is based on the realities of a DC operation.

  1. They must concentrate on the task at hand

High customer demand does not leave time to understand and adapt to a new technology.

Most DCs have limited space and the ability to constrain a new system for the sake of learning is nearly impossible

  1. Nearly all POCs are initiated by other groups and not by the operations group.

This means that the POCs highlight the pain points and convince operations to NOT continue on with a roll out.

  1. Poor communication between the vendor and the Operations group

DC Operations Managers want to know the arc of the technology and what it will do TODAY that is beneficial.

Of course, they also want to know the long term benefit.

DC Operations Managers need to know the pain they experience today will be resolved as well as reaping the potential gain in the future.

There is a similar parallel in the AMR vs AGV logistics space.  AMRs are still in their infancy and, like any new technology, have some bugs to work out.  The VC crowd is betting on the AMR vendors – presuming one or two of them will hit it big.  Like drilling for oil, most will come up dry.

In the near future, there are going to be AMR disappointment stories in the media.  Products that promised to deliver remarkable throughput and productivity improvements and subsequently failed to deliver.  These “bad news” features will hurt the growth prospects of AMRs.

AGVs, conversely, are tested and vetted both on the distribution and manufacturing plant floor. Because they are an automated extension of familiar fork trucks, the buy-in and adoption are fairly easy. Sure, there is an infrastructure, narrow aisle, and guidance conversation needed.  After those concerns are assuaged, most companies see the value and are happy to look at the remainder of the decade with AGVs.

Those who want to be on the cutting edge and are willing to take on the technology risk of the current state of AMRs are to be applauded.  Most DCs and warehouse managers cannot afford to take on the hope and promise of AMRs without proof and evidence they are a better purchase decision.

For those large companies with deep pockets perhaps an AMR is the right choice.  The rest of the logistics, fulfilment and DC market will stick with AGVs for the next several years.

Author Profile

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John Hayes, Director of Sales for Balyo USA. Hayes is a widely-respected thought leader for the manufacturing, distribution, logistics, and materials handling industries. For more than twenty years, Hayes has been evaluating, designing, developing, and implementing innovative technology solutions, with a particular focus on the AGV (automated guided vehicle) and AMR (automated mobile robots) space. Hayes is a Supply & Demand Chain Executive “Pros to Know” recipient. Hayes is a proud member of the Forbes Business Development Council. Contact Hayes at John.Hayes@balyo.com or on LinkedIn.

This blog post is sponsored by TR Cutler, Inc.

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