Inside Logistics

Say “hello” to your new co-worker

How smaller distribution centres and warehouses are adding autonomous vehicles to increase productivity and save costs


May 23, 2018
by Treena Hein

agvs

The OTTO unit is equipped with robotic arms that let it perform specific tasks without needing human intervention.

Robotic applications are quickly spreading across the warehousing and logistics sector, a market expected within four years to reach $22.4 billion – more than 11 times what it was in 2016.

That’s one of the findings presented in ‘The ROI of Robotics’, a report published recently by Yale Materials Handling. Autonomous technologies are ready for deployment, the report says. While early adopters had to put up with ground-guided vehicles that followed wires, tape, magnets and reflectors, AGVs on the market today are truly self-guided. The advent of vision technology means robotic mobile equipment can operate without fixed infrastructure, making it flexible and easy to use. In goods-to-person (GTP) fulfillment workflows, AGVs remove the need for employees to know and navigate to inventory storage locations, leaving them to focus on packing orders as quickly as possible using inventory brought to them by the AGV.

Large leads the charge

Autonomous lift trucks and other small vehicles have been on the market for several years now, and as is the case with most new technology, big firms like FedEx and DHL are leading the adoption charge. FedEx has been testing five Vecna robots at one of its hubs, and that if all goes well, it will likely replace all tuggers at that location with robotic ones. It’s not hard to imagine that in the future, all large DCs will have most, if not all, transport of inventory and more being done by AGVs, but will that be the case with smaller DCs as well?

We know that the primary benefit of AGVs – helping with labour shortages and turnover – is something all DCs can use no matter their size, but Chris Merta, product manager for automation at Raymond Corporation, says labour challenges are even more acute in smaller firms. Across the U.S., 600,000 warehouse jobs went unfilled as of May 2017, and the annual turnover rate for warehouse workers is still about 36 percent.

“While there may be some fear that automation will take away jobs, robotic lift trucks target the repetitive, exhausting tasks that are subject to turnover,” explains Lou Micheletto, Yale’s manager of integrated solutions. “Most robotic equipment is justified by alleviating the constant churn of these high-turnover positions and the constant rehiring and retraining burden it can place on management, while also allowing the reassignment of labour to more rewarding, higher value-added tasks.”

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Dematic has recently introduced a new line of AGVs with a lower cost of ownership.

Labour savings

Whether it’s a big DC or a smaller one, AGVs provide savings on all labour fronts, from wages (including overtime and holiday pay), training costs, insurance, workers’ compensation, and lost time due to illness or injury. AGVs can work 24/7, except to wait for a few minutes once in a while its battery is swapped for a fresh one. Merta adds that labour accounts for 72 percent of lift truck ownership expenses.

And as Yale states, quoting the Material Handling & Logistics U.S. Roadmap 2.0, “automation will likely continue to become less costly, while wages and benefits for human workers will increase over time.” Micheletto notes that robotic lift trucks are especially valuable for the time between shifts, 15-minute breaks and lunches. “When workers return,” he says, “the inbound lanes are clean.”

Simon Drexler, director of product at Waterloo, Ontario-based OTTO Motors, adds that with a self-driving vehicle, carts with outbound orders on them can be picked up before they are full, making for a more even flow of traffic.

Yale encourages automated equipment workers to name the vehicles to help integrate them into the workforce.

Health & safety

Robotic lift trucks also reduce accidents meaning improved health and safety performance and also less product damage and wear and tear on warehouse infrastructure. While self-driving technology is under considerable scrutiny after an Uber autonomous vehicle collided with and killed a pedestrian in the U.S., autonomous warehouse vehicles have proven to be very safe.

And the costs of accidents are high. Human-operated warehouse forktruck accidents are the second largest cause of freight damage and inventory losses and account for more than 13 percent of claims, in the U.S. more than 100 fatalities are attributed to forktruck collisions, and another 20,000 people are seriously injured.

Eliminating operator error by using an automated forktruck promises to help reduce the risk of these expensive incidents.

Productivity is also boosted by improving equipment longevity through smoother automated operation, and interruptions are avoided as the AGVs are able to find alternative routes when needed, and in the case of multiple AGVs in one facility, if one encounters a delay-causing obstruction, it lets all other units know as well.

Furthermore, “since they are simply standard lift trucks with robotic technology added,” states Yale in its report, “the same local dealer personnel can provide service.”

Merta adds that the telematics on Raymond’s automated trucks also provide the benefit of data collection and analysis. This could allow DC managers to pinpoint where (and how often) the AGV is forced to find an alternative route, for example, or to compare how many trips the AGV makes over the course of one shift versus others. And with both software and hardware updates to come in the future, these robots can also adapt to many new challenges.

On the market

Depending on whether a facility is operating two or three shifts and other unique facility factors, major AGV makers agree that ROI is usually reached within a year or two. To help maximize ROI, in 2016 Dematic launched a compact line of AGVs costing up to half that of traditional units. By the end of 2017, almost 50 units had been delivered to customers, and this amount has already been exceeded in 2018.

The compact lineup includes a tugger capable of towing up to 10,000 pounds, a counterbalance fork truck capable of lifting 2,500 pounds, and a straddle fork capable of handling larger and heavier loads up to 3,600 pounds. A fourth model to be launched later this year will allow for a powered conveyor deck, racking/shelving or robotic arm to be mounted to the back. Dematic has been offering automated lift trucks under its own and the Egemin Automation brand.

Yale offers three robotic lift trucks, one that lifts pallet loads a few inches off the ground and transports them, a tow tractor model that hauls loads on top of trollies, and a counterbalanced stacker model capable of retrieving and depositing pallet loads up to 12 feet off the floor. Raymond offers both an automated pallet jack and automated tow tractor. OTTO offers two self-driving vehicles, a small unit designed to move boxes and other human-scale payloads, and a larger unit, which can move pallets, racks and other large items. Vecna Robotics offers a range of equipment from a 20-kilogram-payload tugger up to a 4,500-kg tugger and 3,500-kg pallet lifter.

Why smaller DCs hesitate

There are many reasons why a smaller DC manager may not have explored AGV territory. According to Drexler, smaller warehouse managers don’t want to try autonomous vehicles for the same reasons that people generally don’t want to engage with any new technology: it’s unfamiliar. Furthermore, he says managers may feel their facility is not suitable is because it’s too busy with equipment and people, or because it changes frequently.

Some managers also hold the misconception that self-driving technology is not intelligent – and that it therefore perhaps requires onerous ongoing supervision or management. However with OTTO, Drexler says “you set the goal and it will find a way to do it.”

Lastly, there are also those, in Drexler’s view, who think an AGV or self-driving system will be too complex to set up. Set up for his product is very quick, he says, often under two hours, and operation is extremely simple, involving standard consumer-type app technology. “The largest pitfall to adopting automation in a smaller setting is taking the first step,” he says. “Knowledge is the key.”

In terms of first steps, Micheletto notes that Yale is often approached by smaller DC managers at trade shows. They will also call the company because a distributor has stimulated their interest.

“Smaller operations may not know it’s even an option for them,” he notes. “We perform due diligence beforehand to make sure a defined task is doable and does not require value-added capability beyond the robotic lift truck’s transport and lifting/retrieval capability. Then, we come in and install the truck.”

Drexler says OTTO is approached by customers after they have analyzed their own process and they want to to discuss what would work best. “Some customers want facility analysis,” he says. “We can run many different types of simulations, from number-based estimates in Excel right through to 3D simulations of the entire facility.”

Merta believes it’s highly beneficial for smaller organizations to align with a trusted vendor with whom they can work closely to determine needs and find the best application for their exact situation. “As organizations become more comfortable with adopting technology and implementing it,” he says, “they can expect all pieces to come together and work right out of the gate.”

What happens next

After an AGV is implemented, there is usually a period of organic discovery and application growth.

“When they realize the truck’s benefits, they begin to look at other areas where it could be applied and determine how to get more out of the truck,” Merta says. “The next steps for these organizations is the discovery phase to learn of new applications within their facilities so they can increase truck usage and the product’s value.”

In his view, it’s important that managers of smaller DCs remember that an automated vehicle is a technology purchase, not a commodity purchase – a systems-oriented asset rather than a transactional buy – and this can sometimes be a challenge to understand. These companies are not buying trucks the way they used to buy them, he says, so proper research is important.

It’s also critical in Merta’s mind to explain the benefits one or more AVGs will provide – especially how the roles of former transport equipment operators can be positively affected with value-added tasks and roles.

A member of the team

Regarding implementation, Drexler notes that “almost without fail,” the attitude among staff is positive. “It enables workers to do the part of the job they have been trained and employed to do,” he says. “OTTO just becomes a member of the team.”

Indeed, Yale encourages operations to name each robotic lift truck, and then staff members can refer to it by name in conversation. “We’re going to see this technology become more and more commonplace,” notes Micheletto, “because it’s becoming easier to adopt as more information becomes available…I foresee it will be widely adopted for that reason in the coming years.”

For his part, Merta believes organizations would do well to consider the future carefully and be ready to adopt other accompanying technology. “They must look beyond the implementation of one automated truck to help solve productivity and efficiency challenges, especially as it relates to incorporating telematics,” he says.

He advises above all to “be open to the potential of other innovations. Think beyond what you’re implementing today and think proactively about future needs.”