Five ways AGVs provide value to supply chains

Automated guided vehicles (AGVs) can improve supply chain productivity, capacity and safety by taking over repetitive tasks and streamlining certain aspects.

By Luke Goodwin January 20, 2022
Courtesy: FlexQube

The application of automated guided vehicle (AGV) systems continues to grow in many warehousing and manufacturing facilities. In addition, AGVs have new emerging applications in other fields such as inventory management, healthcare, retail, agriculture, security, delivery services and disinfection. A report by Research and Markets indicates the AGVs and AMRs market will reach 13.2 Billion US dollars by 2026.

The COVID-19 pandemic has accelerated the need for automation in many industries due to lockdowns and an increased emphasis on remote workers. Embracing automation is key to the growth of any organization in today’s environment. As a result, many organizations are incorporating robotics in their supply chain operations. How do AGVs add value to supply chain operations?

1. AGVs increase safety and production by handling repetitive tasks

AGVs are valuable equipment in transporting materials and finished goods on the manufacturing or warehousing floor. In addition, this has helped enhance efficiency and safety within a facility.

One factor to consider is the time workers spend and the distance they cover walking from one working station to another. Floor managers can reduce this time and distance by assigning such duties to AGVs. AGVs can move from one workstation to another. Workers can pick materials and place finished goods onto the carts and let the robot transport them to their next destination.

Another key role AGVs can perform is the handling of repetitive tasks. Such tasks can be extremely boring to workers, leading to increased errors. By handling repetitive motion tasks, workers can focus on more valuable tasks, making workers more productive.

Robots also can transport heavy and hazardous materials that could pose health risks to workers. AGVs can transport these materials quickly and with less effort while also making the workplace safer.

2. AGVs can expand supply chain capacity

As many industries move towards automation, AGVs are replacing conveyor belts and forklifts on many facility floors. Though forklifts may offer the flexibility not available with AGVs, forklifts are human-operated and prone to human errors. A forklift operator may get tired or distracted, increasing the probability of errors and accidents.

Assembling an AGV is an expensive, large and time-consuming investment. However, the speed and efficiency of AGVs over forklifts compensate for the implementation costs. According to the National Safety Council, forklifts accidents were responsible for 8140 non-fatal accidents and 79 deaths in 2019.

A primary function of an AGV is a malfunction of a single element in the system. Such a malfunction may cause downtime on the entire supply chain. Scheduling passive maintenance on the system is essential for maintaining operational continuity. Another essential factor floor managers must consider when automating supply chain operations is scalability. Companies can always add more carts to the AGV system and this makes it easy to expand the supply chain’s throughput and capacity.

3. AGVs can help increase productivity while being space-efficient

Space utilization is another key factor to consider when automating supply chain operations. Unlike other heavy equipment such as conveyors and forklifts, AGVs require less floor space to operate. As a result, companies can increase productivity while still being space-efficient.

Supply chain managers can realize the process of workstation supplying using a variety of transport technologies. The supply chain requires the delivery of materials or goods using a precisely defined route and schedule, termed a milk run system. AGVs follow a predetermined route and schedule, using a milk run method. This means all deliveries are scheduled on time and reduces the possibility of waste and material damage.

Courtesy: FlexQube

Courtesy: FlexQube

4. AGVs can enhance inventory visibility

Inventory visibility is an essential aspect of supply chain operations. However, keeping track of the inventory in hand and knowing where it is located can be difficult, especially if the company uses a manual system. However, supply chain managers can overcome this challenge by integrating AGVs with inventory management systems.

Such integration allows managers to have real-time inventory reports, which eliminate the need to crosscheck data across spreadsheets and physical walks to check inventory manually.

In addition, workers can quickly track the movement of materials and finished goods. Workers can search for stock using SKU, storage location, batch numbers, or quantity for instant stock information. Fast and error-free stock movement is critical, especially when dealing with perishable goods.

When managers can accurately locate inventory, they can optimize AGV movements, pickups, and schedules. In addition, load handling and identification sensors play a critical role in identifying and tracking the materials and goods an AGV transports.

Sensors can detect different load geometries and surfaces, correctly identifying the load. Non-contact identification systems also offer full traceability of the goods an AGV transports.

Typically, AGVs don’t need to identify materials they transport. However, integrating an AGV system with management software allows them to identify these materials. Laser-based barcode scanners, image-based code readers, and RFID are some of the identification technologies AGVs use.

With such technology, AGVs can effectively identify and record the materials they transport. Moreover, such data is readily available to managers, enabling them to locate materials and goods accurately. This prevents loss of productivity and time resulting from waiting for new materials to arrive. In addition, it will prevent the waste of capital that may occur from holding too much inventory.

5. AGVs can work alongside humans

These self-driving vehicles are equipped with many technologies that make them safe to work alongside humans. For example, these robots follow a guide path integrated on the floor of the facility. In addition, the AGV will use an automated guidance system such as floor-mounted magnetic bars or tapes.

Cameras and sensors are the eyes and ears of AGVs. AGVs count on numerous sensors and cameras for their basic functions like navigation, material handling, obstacle avoidance, guidance and safety.

AGVs sensors and cameras are divided into five main functions:

  1. Navigation and localization

  2. Safety sensors

  3. Load handling

  4. Environment Perception

  5. Identification.


Collisions between AGVs and people or objects can be costly and lead to legal action. Therefore, AGVs are installed with obstacle sensors. Though an AGV cannot navigate around obstacles, it can detect obstacles and stop, avoiding a collision.

International standards place high safety requirements on person-detection systems. Such safety systems prevent danger to people working alongside AGVs.

Key takeaways

Supply chain managers are faced with a huge challenge when deciding the type of equipment to apply in automating their operations. Supply chain managers should consider the benefits of AGV technology to remain competitive in today’s world.

Author Bio: Luke Goodwin is an experienced content marketing manager with a demonstrated history of working in the logistics and supply chain industry. Currently, he works at FlexQube where he creates valuable content relevant to the intralogistics and material handling industries.