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?

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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.

Advantages of AGVs

1. 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.

2. Increased Safety

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.

3. 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.

4. Modularity

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

1. 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.

2. 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.

3. 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).

4. 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.

Alternatives to AGVs

The benefits that AGVs offer have created buzz and placed them front and center in the minds of warehouse managers and supply chain executives who are considering automation. But the simple truth is that they are not well-suited for all businesses.

If you are looking to automate your operation but worry that AGVs would not fulfill your specific needs, there’s good news: Warehouse automation comes in many forms and technologies that you can use to boost the efficiency and profitability of your operation.
Below, we explore some of the alternatives to AGVs that may be able to help you reach your operational goals.

1. Conveyor Systems vs. AGVs

Conveyor systems were created to automate the transfer of materials—whether raw materials, works-in-process, or finished goods—from one location to another within a factory, warehouse, or distribution center, just as AGVs are designed to do.

Because conveyors have been around for so long, the underlying technology that makes them work has been adapted into countless variations, each of which is well-suited to transporting different kinds of materials and completing different tasks (such as sorting) in addition to simply transporting materials. Some of the most common conveyors available include:

• Accumulation Conveyors
• Case Conveyors
• Pallet Handling Conveyors
• Trash Conveyors
• Polybag Handling Systems
• Numerous sortation systems

There are many obvious technical differences between AGVs and conveyor systems, which can be reduced to the difference in their very nature: conveyor is fixed whereas AGVs are mobile. Considering that, the most important difference between the two is how much floor space they eat up within a facility. By design, conveyors are going to need much more dedicated space to implement than is required by an AGV or fleet of AGVs. That being said, there are options available for facilities that find themselves constrained with a small footprint.

Whether a conveyor system or a fleet of AGVs makes the most sense for your operation will depend on how much space you have available for infrastructure. Also important will be the demand that you are trying to meet; for facilities with a constant or near-constant stream of demand, a conveyor may be more ideal compared to a fleet of AGVS. Of course, any final decision will depend on the specifics of your operation.

2. Automated Storage and Retrieval (AS/RS) vs. AGVs

Automated Storage and Retrieval Systems (AS/RS), are another potential alternative for AGVs in that they can provide the transfer of materials and goods necessary for an operation to continue running smoothly. But whereas AGVs solely move goods, AS/RS has the potential to perform other applications as well.

In addition to traditional long-term storage, AS/RS can be used to:

• provide buffer storage between various stages in an
• operation’s workflow
• stage orders for shipping
• Incorporate a Goods-to-Person (G2P) order picking and packing strategy into the operation
• And more

Beyond this, AS/RS potentially allows an operation to address a greater number of logistical issues than AGVs: Namely, the question of what storage space is necessary for inventory. Because AS/RS allows an operation to reclaim vertical space by building up instead of out, implementing automated storage and retrieval often creates a more efficient use of existing space while also addressing concerns of labor availability and cost. This can lead to a more efficient use of space, especially important for operations with small footprints.

3. Overhead Trolley Conveyor vs. AGVs

An alternative to traditional conveyors and AGVs when it comes to transporting product or other materials within a warehouse or DC, an overhead trolley conveyor may prove to be the ideal solution for your operation.

Overhead trolley conveyor systems can be either powered or non-powered. They typically operate as a chain riding within an enclosed track, in a closed-loop configuration. A secondary fixture such as a hanger, trolley, or wire basket will typically hang from the chain to accommodate whatever material is being transported.

Overhead Trolley Conveyors are best suited for specific loads, and may prove ideal in operations:

• Transporting empty corrugated cartons, totes, or trash
• Transporting/handling/sorting garments on a hanger (GOH)
• Hanging of goods through paint line applications
• Handling of heavy parts through the manufacturing process

4. Automated Guided Carts (AGCs) vs. AGVs

Like AGVs, Automated Guided Carts (AGCs) can be used to move inventory, supplies, and materials from place to place within your facility, allowing you to free up labor to perform other, more valuable tasks. But while similar, they differ in important ways.

Whereas AGVs can navigate a facility based on a number of different technologies (including LiDAR, cameras, etc.) AGCs typically navigate along a magnetic strip that is placed along their desired path, which is relatively easy and inexpensive to change. The systems can also be modular, allowing for slow and steady expansion as it becomes necessary.

AGVs are also capable of moving considerably larger weights than AGCs, which often top out around 6,000 pounds for towing and 4,000 pounds for carrying (though the exact capacities will depend on the manufacturer and model). That being said, AGCs can be capable of handling everything from totes, boxes, and cases all the way up to larger pallets.

Because of their reduced size, AGCs can often cost about half as much as a conventional AGV, making them an ideal solution for an operation that does not have the funds for a fleet of traditional AGVs.

5. Autonomous Mobile Robots (AMRs) vs AGVs

Autonomous Mobile Robots (AMRs) are a newer variety of warehouse robotics that have begun to receive a lot of attention of late, as operations like Amazon begin to embrace them more and more in an effort to modernize their facilities.

Functionally speaking, AMRs can be used in much the same way as AGVs and AGCs: To transport inventory, product, or other materials from one location to another within your facility. Depending on the exact type of autonomous mobile robot employed, this functionality can be used to replenish stock, facilitate various order picking strategies, or fulfill a different objective.

However similar AMRs are to AGVs and AGCs, they are also different in key ways. AGVs and AGCs navigate within an operation primarily according to preset, fixed routes, relying on magnetic strips and other guides to maneuver around within a facility. AMRs, on the other hand, operate a bit more independently, relying on a suite of sophisticated onboard sensors, maps, and computers to interpret their surroundings, avoid obstacles, and fulfill their objectives.

Are AGVs right for your operation?

AGVs can be incredibly useful tools that can increase efficiency and profitability in many order fulfillment 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 automated guided vehicles use and decide whether they would complement or hinder your operations. Depending on the specifics of your operation, a different kind of automation technology (like autonomous mobile robots or AS/RS) might be better able to address your business needs.

Factors like your business cycle, operational goals, level of growth, and available investment capital will all impact your ability to implement a system, and it would be a good idea to speak with warehouse design consultant or systems integrator to help determine if implementing AGVs makes sense for you.