Danfoss Power Solutions, the hydraulics segment of the $7B multinational organization, Danfoss, transformed a mission-critical operation and created a flexible foundation for continued growth—in just a few months. Here is how they did it:

The Task

In 2020, the North American headquarters of Danfoss Power Solutions took a crucial first step on a five-year plant transformation to remain competitive in the global marketplace. To achieve this, Danfoss needed to improve their material and information flow throughout their facility by automating critical material handling processes. 

The need to automate also stemmed from key challenges they were experiencing at the Ames, Iowa facility, including:

• Labour shortages: Historic unemployment rates in the area

• Employee safety: Improving the high near-miss incident rate 

• Floor layout: Limitations from existing infrastructure monuments 

Tasked with finding an automation solution to address business needs, resolve key challenges, and position the company for future growth, Manufacturing Engineer Stephen Hines researched flexible automation solutions that could easily be adapted and extended in the manufacturing facility.

The Solution

Danfoss automated the movement of finished goods from multiple assembly lines to a fixed paint line at the facility. This had been a potential bottleneck and was a critical element of achieving plant transformation.

Stephen considered a number of material-handling options to automate the movement between the two siloed islands of automation. He quickly eliminated conveyors — as the equipment would worsen the facility’s existing problem of limited floor space — and forklifts because they require more operators, adding to the labour shortage issue. After comparing AGVs and AMRs, he ruled out use of AGVs because the guide-by-tape smart carts would run into conflict with forklift operators and would require ongoing maintenance to modify routes. Stephen ultimately decided that Autonomous Mobile Robots (AMRs) best met the project requirements based on numerous criteria.

Assessing AMR solutions on the market, Danfoss chose the OTTO Motors' OTTO 1500 heavy-duty AMR for five specific reasons: 

1. No physical infrastructure required with minimal upkeep

2. Safest material handler with suite of visual indicators, leading-edge onboard sensors and forklift mimicking

3. Intuitive experience for operators and integration with existing software

4. Biggest payload on the market to move “a thousand pounds in one go”

5. Dedicated technical support with detailed resources and responsive personnel

“Once we got to see the Fleet Management software in action, it was apparent—right out of the gate—that OTTO is head and shoulders above the competition. We can make the AMRs function just like our forklift operators would—in under five minutes.” 

— Stephen Hines, Manufacturing Engineer, Danfoss Power Solutions

Stephen built a strong business case focused on productivity, cost savings and safety to substantiate the investment in the OTTO solution. With OTTO, plant productivity would improve considerably—increasing daily capacity and runtime as the AMRs could run 24/7. Additionally, he compared the cost of achieving the heightened productivity using human operators to an AMR, which demonstrated that OTTO AMRs represented a superior approach for improving response time and reducing delivery lead times. Lastly, Stephen knew that by making the facility safer for workers, Danfoss Power Solutions would recognize important complementary benefits from fewer contacts between humans and the material handling process.

To introduce the AMRs into the facility, Danfoss worked closely with the OTTO Motors team to ensure a successful implementation. In the stabilization period, Stephen developed KPIs for cycle time, scrap percentage and equipment uptime, which were tracked on a weekly and monthly basis. Once the handoff was complete, the Danfoss team leveraged OTTO's Fleet Manager software solution which provides extensive system logging, fleet monitoring, and performance management. This data is a key enabler of continued stabilization and optimization efforts and simplifies ongoing performance management.

“OTTO really brought to us the most reliable performance that we could see in the market. Today, people see AMRs as the connection between our assembly lines and our paint systems—we want to make that a standard of our material flow across the factory”

— Will Miller, Director of Operational Services, Danfoss Power Solutions

The Result

By implementing OTTO AMRs into the Ames, Iowa facility, Danfoss was able to improve production capacity and efficiency while achieving the following results: 

• 5 less material handlers to be hired

• No additional carts, forklifts or equipment needed

• 2.8 year ROI 

• 40% internal rate of return

• Reduced safety exposure by 70,000 hoist touches

“OTTO has given us the means to transform in the short term while creating a framework for future growth and scalability—now we can dream big.”

— Stephen Hines, Manufacturing Engineer, Danfoss Power Solutions