Using easy-to-install kits made from off-the-shelf components, Toyota converted 22 tow tractors at one of its plants into automated guided vehicles. Plans are now in the works to bring the technology to DCs.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
Imagine walking into a material handling equipment maintenance and repair shop, pulling standard components off the shelf, and—with relatively little time and effort—turning an ordinary industrial tow tractor or forklift into an automatic guided vehicle (AGV).
That day isn't here just yet, but it's closer than you might think. An automation project at a Toyota auto manufacturing plant in Georgetown, Ky., has shown that it's possible to retrofit some types of manual equipment quickly and easily, earning a big return in terms of cost, labor, efficiency, and flexibility. Although the project involved a manufacturing environment, it may well serve as a prototype for bringing more AGVs to material handling environments, where they have yet to make major inroads due to their cost and complexity.
TOW TRACTOR TRANSFORMATION
Toyota Motor Manufacturing Kentucky Inc. (TMMK) makes the Camry, Venza, and Avalon models at the Georgetown facility, a 1,300-acre complex encompassing some 7.5 million square feet of manufacturing and assembly space. Like all Toyota operations, the Georgetown plant adheres to the Toyota Production System, also known as "just-in-time" or "lean" manufacturing.
Over the years, Toyota had honed production at the Georgetown plant to a high level of efficiency. But there was still room for improvement when it came to the internal movement of parts. The factory, built in 1988, is not as compact as newer facilities. As a result, workers delivering materials to the body-weld department had to drive long distances, navigating congested areas to drop flow racks and palletloads of parts at work cells. Sudden stops, complicated workflow paths, and the occasional traffic jam or collision led to product damage and delayed deliveries.
A team assigned to study the problem determined that automating the transportation of parts to the 1 million-square-foot body-weld area—in essence, taking human drivers out of the equation—would eliminate most of the delay and damage problems. Their conclusion may not be very surprising. What is surprising is the way TMMK accomplished that objective: Instead of purchasing new equipment, the factory chose to retrofit 22 of its Toyota 24-volt, AC-drive tow tractors with locally built automation kits that turned them into automatic guided vehicles.
To develop these "home-grown" AGVs, TMMK worked with two local business partners—AutoGuide, an automation specialist led by AGV innovator Paul J. Perry, and Industrial Concepts Inc. (ICI), a developer of custom machinery and control systems whose president, Tim Taylor, is a former TMMK mechanical whiz. (AutoGuide and ICI are closely allied; the two share a facility across the street from TMMK, and ICI's executives have an ownership stake in AutoGuide.)
Utilizing the same off-the-shelf devices already in use for other types of AGVs at TMMK, AutoGuide outfitted the 10,000-pound-capacity tow tractors with obstacle and guidance sensors, radio-frequency modems, RFID tag readers, and a touchscreen programmable logic controller (PLC) interface, among other technologies. All of the components are contained in a removable attachment designed by AutoGuide. Installation is a simple matter of drilling six holes in a tractor's chassis, and is the only physical change required, according to Tim Meyer, Toyota Production System solutions and AGV product manager for Toyota Material Handling U.S.A. Inc.
Flexibility was another reason TMMK chose to convert standard, manual equipment to AGVs. The stand-alone attachments can be installed either at the time of purchase or lease, or after the vehicles go into service, and they can be easily removed and reinstalled on other vehicles, Meyer explained during a tour of TMMK. Drivers can switch the tractors from automatic to manual mode simply by stepping on a pressure-sensitive mat in the driver's compartment.
NAVIGATING "SPAGHETTI JUNCTION"
Before the AGVs arrived in the body-weld department, manned tow tractors dropped off flow racks and pallets full of parts alongside each of the robotic welding cells, which were located on both sides of a wide aisle. Team members then picked up the parts they needed from racks and pallets on both sides of the aisle. The work and material flow for parts delivery to the robotic welding cells involved 16 stops, or actions, from pickup to placement in the welding robot load positions.
Today, the storage racks and pallets are gone. Now, a driverless tow tractor pulls as many as five dollies full of auto parts from the storage area to the cells, a distance of about 950 feet. Team members retrieve the parts they need from the dollies, which are positioned parallel to the cells just a few steps away, eliminating the need to cross the aisle. Once all the parts have been unloaded, the AGV returns to the storage area for more material, while another tractor with the next batch of parts arrives just when they're needed. Instead of 16 stops, there are only nine. And because the AGVs always travel the same route at the same speed, the time from pickup to arrival at the welding cells is consistent and predictable.
To get where they're going, the tow tractors follow over two miles of magnetic strip slotted into narrow troughs in the concrete floor. Their positions are tracked by RFID tags embedded in the floor.
Navigating the high-traffic body-weld department requires care and precision. The weld stations are positioned along a 300-foot "highway" with nine routes branching off and merging into it—an area known as "spaghetti junction." In addition, the tow tractors have to share the road, so to speak, with other Toyota AGVs (such as L-cart material transporters and low-profile "Mouse" tug-carts) that motor along the same magnetic guide paths. The tow tractors also cross paths with the manned vehicles that deliver partial loads and those destined for multiple drop-off sites. Drivers are required to yield to the AGVs.
To manage the movements of the automatic vehicles, TMMK's AGV implementation team worked with ICI to develop traffic-control technology that would be compatible with the guidance systems and control devices already in place for other types of AGVs. The resulting Automated Vehicle Intersection Navigational Utility (AVINU) is "the link between the AGVs and everything else that's automated," said ICI President Tim Taylor.
The wireless system communicates with the different types of AGVs, reporting each one's location, status, and performance data—information that can be viewed on any authorized computer in the facility. AVINU assigns loads to vehicles and regulates traffic at intersections; arrival at certain RFID tags triggers wireless transmission of instructions to the AGVs. The system also monitors battery status and tells the vehicles when to head over to an opportunity charger.
REACHING A BROADER AUDIENCE
Changing the way parts are delivered and reconfiguring the robotic welding cells has cut walking distances by 978 miles a year, saving five hours of walking time per shift—the equivalent of 317 work days annually, said Paul Stafford, specialist production engineering and AGV implementation lead. Furthermore, eliminating the storage pallets and flow racks opened up nearly 37 square feet of work space adjacent to each cell, freeing up space for other activities.
Because the AGVs travel the same paths at a consistent speed without so much as an inch of variation, they can safely navigate turns that would challenge human drivers—in some places, with less than six inches of clearance, according to Stafford. Congestion, collisions, sudden stops, and in-transit product damage have all been eliminated.
The labor savings have been equally impressive. The body-weld department has been able to reassign 42 people to other, more value-adding positions—including to the AGV implementation team—and nobody has been let go.
So far, the Toyota AutoGuide/AVINU project has saved TMMK more than $1 million annually, and ROI was achieved in just over one year. The payback has been substantial enough that the AGV implementation team will roll out the system elsewhere at Georgetown and will help to implement it at other Toyota auto plants.
The project foretells wider adoption of automation, not only in manufacturing but also in warehousing and distribution. In fact, AutoGuide attachments for Toyota pallet trucks and forklifts are already in the works. "I believe the automation market is limitless, although there will be challenges," Meyer said.
One of those challenges will be to convince warehouse and DC operators that automatic vehicles are not as complicated and expensive to purchase, install, and operate as they might think. That may not prove particularly difficult, however: Meyer estimates that the cost of a new, mass-produced vehicle plus the AutoGuide automation kit would be approximately one-fourth that of a custom-built traditional AGV. The fact that the AGVs are created from standard industrial vehicles and widely available, off-the-shelf components rather than proprietary controls will keep the cost down, he added.
Potential buyers will also want assurances of ready access to maintenance services for this new breed of AGVs, said Martin Boyd, vice president of product planning, marketing, and training for Toyota Material Handling U.S.A. Inc. That makes it critical to provide service for both the truck and the AGV components through the existing dealer network with its established relationships, he said.
Boyd agrees that lower-cost AGVs are poised for rapid growth. The economic downturn forced companies to look for waste, cut costs, and introduce more process efficiencies while considering how to better prepare for rapid change, he said in an interview at TMMK. Automation can help in all of those areas, and lift truck manufacturers will play a leading role in bringing it to a wider audience, he said. "We want to develop broader solutions around the customer to help them save money. We don't see automation as a competitor. We see it as an enabler."
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."