The Advantages and Disadvantages of Automated Guided Vehicles (AGVs)
Automated Guided Vehicles (AGVs) are commonly thought of as simple machines that perform simple tasks in lieu of personnel. And while this is true in some regards, the last decade has seen AGVs become integrated into many industries outside of distribution and manufacturing—such as retail, the military, and even healthcare.
With this growing boom in the use of AGVs, the logical question that comes to mind for many business owners and operations managers is this: As I look to automate my warehouse or DC, how do I determine whether AGVs are a good fit for my industry and for my operations? What are the pros and cons of AGVs that I can weigh to decide whether to use them?
Free Guide: Top Order Fulfillment KPI Indicators
The simple truth is that AGVs are not a good fit for every industry or set of operations. To help you determine whether or not they are right for you, here are some of the major benefits and drawbacks of using AGVs.
Reduced Labor Costs
AGVs reduce labor costs in your operation in many ways: By replacing a human worker with an AGV, a company pays a single expense for the equipment—the initial investment—versus ongoing costs that would come with a new hire such as healthcare coverage, payroll taxes, salary increases, vacation time, etc.
AGVs are programmed with safety in mind, and as such are crammed full of cameras, lasers, and other sensors that allow them to safely operate around personnel and structures. By contrast, equipment run by human operators, such as forklifts, do not have as many built-in safety mechanisms and ultimately rely on human input, which can be compromised in any number of ways. Whereas a human operator always has the potential to become distracted or fatigued, and therefore cause an accident, these are not concerns when using AGVs.
Additionally, AGVs can operate in conditions that humans either aren’t able to operate in or in conditions that humans don’t operate optimally in, such as in extreme heat or cold or around hazardous materials.
All of this increased safety leads to reduced cost and reduced operational downtime, which can ultimately increase the profitability of many operations.
Increased Accuracy and Productivity
Simply put: Humans make mistakes. By replacing the human element with AGVs, you remove some of the potential for inaccurate workflows, ultimately reducing waste and increasing output, allowing your operations to become more productive and accurate. And whereas human personnel is limited in how long they can work, AGVs are capable of running 24/7.
In addition to the obvious improvements in accuracy and productivity, by integrating AGVs with a warehouse control system or a warehouse management system, you can streamline processes such as inventory and materials ordering.
Easy to Expand
As your operations expand, it is easy to add additional AGVs as necessary (this is sometimes called a “modular system element”). This allows you to avoid an incredibly high initial investment because instead of purchasing 20 or 30 AGVs at once, you are able to start with one or two and transition slowly, eventually expanding your fleet to a fully-automated or mostly-automated operation.
Disadvantages of AGVs
Potentially High Initial Investment
Ultimately, AGVs increase the bottom line for an operation by reducing labor costs and by increasing productivity, but it comes at a cost: the initial investment. Purchasing an AGV, in the short term, is likely going to be more expensive than hiring personnel or using other equipment such as forklifts. It is usually in the long term that savings are fully realized. This initial investment can be burdensome on smaller operations that may not have ready access to capital.
Maintenance Costs. As with any equipment, AGVs will need to undergo routine maintenance and occasional repair. And though AGVs will not be operated directly by staff, there is bound to be some operational downtime as the staff is trained and AGVs are implemented. This isn’t necessarily a “disadvantage” per se, but the potential for an occasional ongoing expense should be taken into account.
Not Suitable for Non-repetitive Tasks
AGVs make the most sense in operations that deal with repetitive tasks since that is what they are programmed to do. If the tasks in your operations tend not to be repetitive, then they can probably be done more quickly and efficiently by staff operating other equipment (such as a forklift).
Decreased Flexibility of Operations
One of the benefits of having human personnel is that sometimes operations require flexibility, such as the ability to jump between tasks.
For example, maybe you need Steve to stop doing what he’s doing and cover for Joe, who has a family emergency and needs to leave, and who was doing something completely different. As long as Steve has the correct supervision and relevant experience, this isn’t a problem—he can fill in where needed, whereas an AGV may not be able to.
AGVs work according to preset systems and processes, which can make rapid change difficult. A business model that tends to react to trends or that is otherwise agile may not be the best fit for AGVs.
Determining Your Path Forward
AGVs are incredibly useful tools that can increase profitability in many ways for many different kinds of operations, but they aren’t for everyone. To determine whether or not they’re right for you, you’ll need to weigh the benefits and drawbacks of AGV use and decide whether they would complement or hinder your operations.