Industry leaders are different. To stay on top, they continually invest to create new efficiencies and improve productivity.

STIHL Inc. is a leading manufacturer of outdoor power tools, including chain saws and leaf blowers. And at its 600,000 square foot plant in Virginia Beach, Va., investments in materials handling automation are the key to delivering efficient manufacturing processes here in the U.S. rather than moving to a cheaper labor market off shore.

'We are determined to continue manufacturing in the U.S. and will not go to low-cost countries to reduce our labor costs,' says Peter Mueller, executive vice president of operations in Virginia Beach. 'To remain the leader in the industry, we have to have the most advanced equipment and automation technologies, not only in production, but also when it comes to logistics and in-plant transportation.'

To maintain its leadership position, STIHL recently upgraded and expanded an existing system of fork-equipped automatic guided vehicles (AGVs) with laser-guided vehicles (Swisslog).

'The AGVs are like the arteries that keep blood moving through the body,' says Christian Koestler, the project engineer who managed the upgrade. 'The vehicles supply raw materials to the injection molding department; deliver subassemblies to the warehouse and back to the assembly line; and connect the manufacturing facilities to the warehouse.'

The commitment to automation has paid off. 'We're on target to show a return on investment in less than three years,' says Peter Mueller.

That quick payback is one important benefit of the new system. Koestler says the precise flow of material through the facility is another.

'With AGVs, the delivery of material to the line or staging areas for the warehouse is much more precise than with other systems,' says Koestler. 'The vehicles show up when they are supposed to show up, with no margin for error.'

STIHL even coined its own term for the new system: LGV, for laser-guided vehicle. The term distinguished STIHL's advancement beyond the six wire-guided AGVs originally installed in 1989.

As the facility expanded to 600,000 square feet and went to a 24/7-production schedule, the original AGV system was no longer up to the task. 'We not only increased our output on various assembly lines,' says Koestler, 'we also added to the variety of products we were producing at this plant. That meant new assembly lines and additional drop locations throughout the plant.'

The upgrade from wire-guided to laser-guided vehicles was completed in two phases. In 2001, three laser-guided vehicles connected two warehouse operations, moving 60 pallets an hour.

In 2002, an additional seven vehicles were put into service to transport materials to and from subassembly, injection molding, raw materials warehouse and final assembly.

In addition to adding vehicles, STIHL also increased the speed of the AGV system from 160 to 280 feet per minute, while tripling the total distance of the travel path.

Overall, the new system combines almost 4,000 feet of travel path with over 100 pick-up/drop-off stations distributed throughout the whole facility. Fifty-five transports are completed per hour.

What's more, bar code scanning of parts delivered or retrieved by the AGVs provides automatic delivery of information back to the warehouse management system.

The raw materials warehouse utilizes high-bay storage to make the most of the space. Raw materials, components, and subassemblies are stored directly on Euro pallets or in wire crates on Euro pallets.

Wire-guided lift trucks serve the area. Each lift truck's operator is assigned to a specific row of aisles in the warehouse.

The delivery of materials to and from the molding areas and the assembly lines is managed by a 'Push-WIP' system, according to Koestler.

In a Push-WIP system, parts are scheduled and delivered to the line in a just-in-time fashion so that the amount of inventory at the line at anyone time is kept to a minimum.

The system calculates the number of parts needed per shift based upon the production schedule and the assembly line rates. Parts deliveries are then scheduled throughout the shift.

Two hours before the line will run out of a specific part or component, the system prints a label for that delivery at a centrally located printer. Lift truck operators pick up labels at regularly scheduled intervals. The labels direct the operator to a storage location to retrieve the pallet or bin of parts to be delivered, and identify an AGV drop-off/pick-up spot on the plant floor.

The operator pulls the palletized material from a storage location; applies a bar code label on the pallet, and then scans the label after dropping the pallet at the pick-up station.

Meanwhile, the AGVs not only pick up pallets at these stations, they also drop off pallets of subcomponents from the injection molding line which will be returned to the raw materials warehouse.

If a pallet of subcomponents from the injection molding station is at the drop location, the operator returns it to the high-bay storage area for putaway. Otherwise, the operator retrieves another label at the printer, which directs him to the next pallet to be delivered to the drop station.

When the operator drops off a pallet, the bar code is automatically scanned by a fixed bar code scanning device at the drop off location. After the scan, the AGV is notified that a pallet is ready for delivery.

The vehicle picks up the load with forks. As it backs away, the bar code label on the pallet is read by the fixed bar code scanning device. That confirms that the load has been picked up by the AGV.

Every part and component number in the raw materials warehouse is assigned to specific drop-off points distributed around the assembly lines. The manufacturing and inventory system knows, then, by part number which drop zone the pallet or crate should be delivered to, and passes that information over a wireless network on to the vehicle.

Onboard lasers reflect off of targets that are mounted above the floor on columns, walls, machines, and posts approximately 25 feet apart. The system automatically measures the distance and angle of the reflected light to calculate and adjust the AGV's position on the preplanned guide path.

If there's already a pallet at that location when the vehicle arrives, the system chooses an alternate drop-off spot nearby.

There is no need to scan at the drop-off point. 'We operate on the assumption that if the vehicle picks up a pallet, it will deliver it to a drop off zone,' says Koestler.

Once the vehicle drops a load, it's available for another delivery to the assembly line. The vehicle may also return empty pallets and bins to a container storage area, or deliver remaindered parts and subassemblies to a drop-off location at the raw materials warehouse.

Once they've been delivered by the AGV, a lift truck operator picks them up and scans the label to determine a putaway location in the warehouse. A confirmation scan puts the materials back in inventory.

Finished goods leaving the assembly line are also scanned and palletized. That information is used to create a license plate bar code that identifies the entire product on a pallet. There they are picked up by lift trucks and stored in the warehouse or stretch-wrapped loaded directly on to trucks. A final scan confirms putaway into storage or onto a truck for delivery.

In addition to adding extra vehicles and extended delivery and pickup routes, STIHL improved maintenance and safety features with the new AGV system.

For one, it upgraded the battery charging system to an opportunity charging system. Instead of manually exchanging batteries once every eight hours, the system now sends the vehicles to a charging station whenever there is a lull in activity. That way, vehicles are in operation throughout the shift.

A laser-guided navigational system also allowed STIHL to replace manual bumpers with 'virtual' or laser bumpers for improved safety.

The lasers are used to define slow-down and stop zones. If another vehicle, lift truck, or individual breaks a laser beam within ten feet of the vehicle, it automatically slows down. If an object comes within one foot of the vehicle, it automatically stops before contact takes place.

Despite its current success, STIHL is not through yet, adds Peter Mueller, the executive vice president of operations.

The implementation of a new enterprise resource planning system is set for this year. The manufacturer is planning to rely more on the floor-mounted scanning devices already in the plant so that lift truck operators won't have to manually scan pallets. Finally, another addition to the final assembly area is planned, which will expand the routing once more.

Thanks to a laser-guided system, the LGVs will easily adapt to the changes with minor changes to the software to add guide path.

With moves like that, STIHL expects to remain a leader in the power equipment industry.

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