Casebook 2011: Arla Foods adds automatic guided vehicles

Arla Foods was interested in automation, but the cramped space and uneven floor levels in its 1974 warehouse in Sweden demanded a unique solution. With a fleet of resilient automatic guided vehicles (AGVs) and traffic control software (Kollmorgen, 540-467-3086, http://www.kollmorgen.com), the company safely and efficiently modernized its operations.

Arla Foods is Europe’s second-largest dairy company with operations in Europe and North America. The site in Gothenburg, Sweden, is one of three production facilities and serves the western region of the country. Back in 2004, the outdated conveyor system that used to transport dairy products from the production area to refrigerated storage was replaced with five manual warehouse trucks operating two shifts a day.

As Arla continuously looked for ways to cut costs in warehouse operations, automated warehouse trucks emerged as an attractive option because the vehicles can be cost effective and flexible. In 2009, Arla installed an AGV system handling 600 to 800 transportation tasks per day. After automating the transportation of dairy goods from the production area to refrigerated storage, the company significantly cut its operating costs.

Gothenburg’s new system design took on a number of challenges. AGVs would need to operate reliably around personnel and order-picker trucks, handle frequent temperature changes from refrigerated to warehouse, and deal with uneven floors inherited from the original building.

Six manual trucks were replaced with six AGVs running two shifts a day. The software for traffic control and order management was integrated with the existing warehouse management system, providing greater accuracy and additional flexibility.

“We are free to change goods locations and the warehouse layout whenever we need to, which was a great advantage,” says project manager Åke Larsson. “With the new system we get a constant traffic flow.”