Need a few Reasons to Invest in AGV Systems?

One of the most crucial elements for achieving a transparent and effective supply chain is warehouse efficiency.

Whether accomplished through strategic wave picking or automation tech, fulfillment centers seek effective solutions for optimizing their logistics processes. A growing trend is investing in an AGV or Automated Guided Vehicles. These systems are by no means a new invention. But thanks to recent innovations, they are experiencing a resurgence in popularity.

The vehicles have been shown to handle a sizeable amount of varying tasks, quickly and efficiently. Tasks that would normally take many hands and several hours of manual labor, an AGV can do in half the time, depending on the task, of course.

However, most businesses need a bit more motivation to find and allocate the funds outside the generic’ “It’ll improve our warehouse efficiency,” statement.

So, if you’re still on the fence about investing in and integrating an AGV in your warehouse, you may find this article quite helpful in justifying the expense.

In this blog post, we’ll be outlining a few important areas where AGVs can be a huge help to a fulfillment center or warehouse operation. 

Reduced Labor Expenses

Anytime you’re removing human labor from warehouse operations, you’ll see a reduction in payroll expenses.

The inclusion of automated guided vehicles essentially eliminates a few employee positions. Once programmed, an AGV can efficiently move freight throughout the warehouse, which also reduces the need to cover healthcare, retirement benefits, overtime, vacation, and sick time. These dollars add up, which helps to pay off the investment quicker. 

Additionally, an AGV can work around the clock. This means no lunch breaks, multiple shifts to cover, and reduced ancillary expenses. 

For the record, yes, we know how this sounds. Not to worry, however, as robots are not taking over the world. And those employees who do get replace by an AGV can be circulated through to other tasks. Maybe even a task that you have been needing more hands to help fulfill?

Savings of Benefits and Salary Increases

Over time, an employee will earn raises, receive added benefits, and extra vacation or sick time.

We spoke above about how an AGV can save on payroll. But when that employee is no longer needed, your payroll budget based on these added earnings will likely trend in a positive direction. It also helps to remove the need to hire additional employees to handle those tasks in the future. This cuts down on training, background checks, and other HR expenses. 

An AGV becomes more profitable every year it is in use. Once the cost savings with employees, HR, and other departments pays off the initial investment, additional cost savings in these areas help improve the bottom-line profitability of the warehouse and lend themselves to overall scalability.

Reducing Damage to Products and Structures

It’s quite common for human operators of pallet jacks, forklifts, and other heavy equipment to damage products and structures inside the facility. Additionally, human operators can become fatigued, tired, or distracted by others while operating the equipment. When this happens, it can result in injuries to themselves and others. removing them from the equation is a win-win situation for the company. 

Accidents in the workplace and damaged goods negatively impact the bottom line... significantly. In fact, shrink can affect relationships with manufacturers, suppliers or distributors.

The AGV operates with lasers, sensors, and cameras that help them efficiently and safely operate through the warehouse. 

Improvement of Warehouse Safety

It’s estimated that a single workplace accident can cost a warehouse up to $15,000 in penalties and fines issued by OSHA. That's not to mention the cost of medical expenses, treatment, therapy, and lost days of service.

AGV systems can be programmed to handle hazardous materials, operate in cold weather storage, and move heavy materials and supplies, which tend to otherwise lead to most on-site accidents. They operate smooth and controlled, can be programmed for speed, and monitored for enhanced safety.

Manually operated forklifts introduce the human factor, which likewise leads to accidents. 

Less Expensive Than Fixed Automated Systems

It’s common for warehouses to weigh the benefits of fixed automated systems like conveyor belts versus something like AGV systems.

Essentially, they complete similar duties – as their goal is to move freight from one location to another.

However, across the board, AGV systems are less expensive and require less upkeep. They also do not impact the daily operation while they are being constructed.

Increase Inventory Control

AGVs can be linked to warehouse management systems, which helps to track and manage inventory levels. Again, a reduction in employee-related expenses is achieved.

Additionally, when inventory levels are maintained and accurate, it helps you better forecast sales, and reduce out of stock situations. 

There are multiple benefits to using AGV systems in your warehouse. The key is to review areas of improvement within your facility that the AGV can improve.

If you’d like to learn more about integrating automation tech in the supply chain, reach out to our team of experts here at Redwood Logistics!