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17-11-2020

Blog Post: Automated Guided Vehicles

November is the month of sales in the calendar year. Consumers get their pick of promotional events and discounted goods with Singles’ Day, Black Friday and Cyber Monday sales. The latest numbers from Alibaba’s Singles’ Day sales just last week showed a 26% y-o-y increase, something that is very much in line with the observed trend of an increase in online shopping during the pandemic. During what has been a difficult time for most businesses, it certainly appears e-commerce giants have been prepared for the virus and are reaping the profits as a result.

How did they do it? 

It is probably impossible to credit one strategic decision as the only reason that e-commerce platforms like Amazon and Alibaba have turned the pandemic from a challenge into an opportunity. Logistically, however, the use of AGVs (automated guided vehicles) definitely played an important part. AGVs are portable robots used in warehouses and logistics centers to move inventory and other materials around. They have been around since the 1950s, and for good reason: AGVs cut labor costs and increase efficiency.

Advancements in AGVs, which we have witnessed in conjunction with the rise of e-commerce, have made them more intelligent and therefore more productive. Alibaba, for instance, has reportedly been able to increase production rate by 300 percent since incorporating AGVs into its workflow. The bots can haul up to 500 kgs in shelves and packages, and travel about 5 feet per second.

What’s more relevant in the time of social distancing is that operators can communicate remotely with the AGVs via a wireless network and give them instructions without stepping foot into the warehouse. During the pandemic, this technology allows warehouses to implement social distancing policies while still operating normally and meeting delivery schedules. 

How AGVs have evolved

As previously mentioned, AGVs are not a new addition to warehouses. However, they used to be a costly investment with rigid limitations that smaller operations couldn’t really afford or justify. Such is no longer the case. The technology that AGVs now feature have made them a “must-have” in the logistics industry. These include better sensors, longer-lasting batteries, and more powerful software for machine-to-machine communication and navigation.

One example we like to use at Cervoz is that of the solid-state drive (SSD). Previously, AGVs used hard disk drives (HDD) for storage. As operational needs have grown to include more tasks and better performance, SSDs soon replaced HDDs as the storage of choice. SSDs have a number of features, including higher IOPS and shock and vibration resistance, that have allowed AGVs to communicate faster within their networks and work better. This is very much just the beginning of the increasing sophistication of AGV technology.

The future of AGV technology

Research from Gartner points to the power of 5G technology to further revolutionize AGVs and improve their capabilities. 5G promises more connectivity and data processing prowess, both of which are crucial components that keep an AGV network running. In fact, industry experts are predicting that strengthening the AGV network will be amongst the prioritized first wave of 5G technology applications.

In a recent interview with CNBC, Alvin Liu, president of Tmall Import and Export (a part of the Alibaba Group) underscored the importance of its logistic infrastructure in facilitating the company’s growth and penetration into previously untapped markets. Liu’s comments reflect a common understanding amongst those in e-commerce that logistic capabilities could be the deciding factor in this increasingly competitive market. 

As warehouse automation continues to grow, the AGV market will undoubtedly grow with it. To stay competitive, e-commerce companies, big and small, need to consider how to further implement AGV technology into their logistic infrastructure and which suppliers to partner with.

 

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