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Automated Guided Vehicles - The Right Material Handling Solution for your Business?

Updated: Aug 29, 2022

What are Automated Guided Vehicles (AGVs)?

An automated guided vehicle or AGV is a mobile robot. AGVs follow a series of predetermined instructions, cues or signals (depending on the type of navigation technology they use) to move around and complete actions, such as picking up or dropping off materials.


AGVs are a safe, efficient and cost-effective transportation solution. They suit warehousing (intralogistics) and manufacturing operations, or any other applications that require repetitive material handling tasks to be completed in a timely manner.


Note: AGVs are sometimes referred to as automatic guided vehicles or autonomous guided vehicles.


What do AGVs transport?

Automated guided vehicles are used to transport:



1. Raw materials

When staging, AGVs might move materials from the warehouse to production or assembly lines.

2. Work-in-process

During the assembly process, AGVs are used to move semi-finished goods from one work station to the next.

3. Finished products

Finished goods might be transported back to the warehouse or directly to shipping.


What are the most common AGV applications?

Automated guided vehicles are used across many different types of industrial sites, such as:


Manufacturing facilities

AGVs are common in automotive production and increasingly in high-tech electronics manufacturing. AGV technology is also being adopted across a wider range of manufacturing sectors, such as packaging, paper and printing, food and beverage, packaging, pharmaceutical, heavy industries and more.


Warehouses (intralogistics)

AGVs are a key component of supply chain automation. According to numerous market studies, the adoption of AGVs in warehousing is expected to grow hugely in the coming years, even more so than in manufacturing.


Distribution & fulfilment centers

With the explosion of e-commerce, huge and fully automated distribution and fulfilment centers are being built from the ground up, creating massive demand for automated vehicles. Autonomous mobile robots are also often employed for order picking.


How accurate are AGVs?

When an AGV is picking, dropping, or docking to recharge, high accuracy is required. The level of AGV precision possible is a direct result of a vehicle’s positioning accuracy.


This accuracy varies from vehicle to vehicle, but as an example, most ANT driven AGVs are capable of achieving a positioning accuracy of ±1 cm and ±1°, sometimes better. This is more than precise enough for the majority of intralogistics and production applications.


Advantages of automated guided vehicles

There are many benefits that organizations can achieve by automating their mobile processes with AGVs. These include:



  • Reduced labor costs

  • Eliminates salary and benefit increases

  • Eliminates damage to structures and product

  • Increased workplace safety

  • Less expensive than fixed automation systems

  • Reduced utility costs

  • Increased inventory efficiency and decreased human error


How do AGV costs compare to manual vehicles?

The capital investment required for automatic guided vehicles is significantly higher than with manual vehicles. For example, in the U.S. a basic forklift truck might cost as little as USD $25,000, compared to $100,000 - 120,000 for an equivalent forked AGV or automated forklift.


A good rule of thumb is that it usually takes 1.3 - 1.5 AGVs to replace the operations of one manually-driven vehicle.


AGV maintenance usually costs around 10% of a vehicle’s sticker price, per year, compared to 5% for manual vehicles. It is also important to factor in the costs of commissioning (installing) AGVs on-site, which can vary greatly depending on the complexity of the project.


Although the upfront costs of AGVs are significant, the efficiency benefits they bring can lead to substantial return on investment being achieved, often in as little as one or two years.

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