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Interview with

Peter Lowet
Head of Strategic Business Development and Sales

Using automated guided vehicles (AGVs) as part of a forward-looking automation strategy can significantly help to increase efficiency in internal transport and goods logistics and consequently achieve rationalisation opportunities. Nevertheless, many companies still shy away from using them. What is the reason for this? In this interview, Peter Lowet, Head of Contract Logistics at REICHHART Logistik, talks about the opportunities and hurdles of AGVs.

To what extent do you think automated guided vehicles can give companies a competitive advantage?

The high demands for ever shorter delivery times, increasing diversity of variants and adherence to delivery dates along the entire supply chain of companies require new solutions for optimising process design. Added to this is the increasing competitive pressure and the customers' expectation of service providers and business partners to keep reducing costs. The expansion of automated processes including the use of automated guided vehicles in transport and goods logistics can bring decisive competitive advantages under these circumstances. In particular, they can be used to tap efficiency and productivity potentials, especially in the area of standardised goods flows and processes, in the use of conventional conveyor equipment or in personnel costs. Companies that actively pursue appropriate solutions and have the courage to invest in the field of automated guided vehicles act in a future-oriented manner and have the best prerequisites to prevail over competitors in the market in the long term.

Where are the greatest opportunities in the use of AGVs?

Especially when designing new logistics systems or redesigning existing ones, it makes sense to examine how automation can make work more cost-effective. One-dimensional integration of automated guided vehicles already offers considerable potential for efficiency and productivity. By "one-dimensional" I mean simple transport applications where the automated guided vehicle system always follows the same movement profile and reliably and automatically transports goods from point to point or from point to person. This solution can be further enhanced by a smart link to the warehouse management system (WMS) or ERP system. In this way, the system can communicate flexibly with the AGV and control it depending on the order situation, e.g. where or how fast it should travel. If this takes place automatically, changes in the call-off quantity, for example, do not require a programmer. I think this is great and absolutely worth pursuing from an economic point of view.

What do you think are the particularities – and perhaps also the hurdles – in the use of automated guided vehicles?

The most important thing, in my opinion, is to have a competent and experienced partner at your side who has the appropriate know-how to implement an automated guided vehicle system. A partner who can also quickly find solutions to technical challenges. For example, we once encountered a technical problem with the hardware during the implementation phase. Together with the supplier, we quickly identified and solved this problem, thus ensuring a process-safe operation. In such circumstances, it goes without saying that I stand by the customer as a reliable partner who can keep a cool head. Together, we can also clarify any reservations or fears surrounding the introduction of the technology and ensure acceptance among the staff. Other aspects that come into play are the acquisition costs, for example for hardware components, or the effort required to optimally network such a logistics solution and to integrate it into the existing IT and logistics infrastructure. All these factors need to be taken into account for the successful introduction of AGVs.

From which company size is such a system financially worthwhile?

I believe that the decision for or against automated guided vehicles should be made independently of the size of a company. Instead, it makes sense to look at target-oriented factors. For example, I consider the amortisation period of the investment to be decisive. Especially in the case of a limited contract period, it must be carefully examined from when the costs are paid off and what the cost-benefit ratio looks like until then. For this purpose, the costs for conventional means of transport or the personnel costs must be compared with those of the automated guided vehicle system. The acquisition costs for AGVs are, depending on the application and task, somewhat higher on average in comparison. On the other hand, their low annual operating and maintenance costs ensure that the investment costs are amortised within a few years. Automated guided vehicles are particularly attractive when the flow of goods is constant and at a high level. For example, they do not take holidays nor are they tied to particular working time models, but can ensure a continuous flow of goods almost all the time. As a result, productivity is increased. Automated guided vehicles can also contribute significantly to safety in transport and goods logistics. Because unlike us humans, these systems do not get tired at the end of a long working day, potentially making them inattentive and prone to errors. Built-in sensors detect dangers at an early stage, thus avoiding collisions or damage. This also helps to save costs and reduce the error rate. Automated guided vehicles can also relieve their human colleagues physically, for example when handling heavy or bulky goods. This can reduce downtime due to illness in the company.

When deciding for or against automated guided vehicles, I also strongly recommend thinking in the long term: Where can AGVs potentially be further deployed and which processes can be redesigned for this purpose? After all, the areas of application are diverse: inside buildings, outdoors, in work areas with personnel traffic or in fully automated work areas. Are there any business expansions or new acquisitions in the future where automated guided vehicles can be integrated in a meaningful way? Do I have a competent logistics partner or supplier at my side who can provide me with continuous support and is experienced in introducing AGVs in ongoing operations? These are all important questions that I should address in advance and that need to be included in a careful assessment so that all parties involved can benefit.

How do you assess the influence of AGVs on logistics in the next five years?

I am convinced that automated guided vehicles will become increasingly popular because the advantages of automated processes are obvious. I consider their influence to be comparable to the use of conventional tugger trains five to eight years ago. Today, they belong to the standard repertoire of warehouse logistics in internal transport and are also already available as driverless systems. The Corona pandemic has also put the durability of logistics supply chains all over the world to the test and clearly demonstrated that automated processes can bring more stability and security. This is where AGVs can make a decisive contribution. I also expect that technology will continue to evolve and new applications will emerge. The next step is to successfully bring AGVs onto the road, for cars, lorries and the like. We are only at the beginning.

The interview is available for download here: REICHHART LogTalk No. 4 - Automated Guided Vehicles