Leaner bots, faster orders: how Ocado innovates in e-commerce

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Diving brief:

  • Kroger’s e-commerce partner Ocado on Wednesday announced plans to roll out fulfillment robots five times lighter than its current model and a network-based robotic arm that will further automate the pick and pack process.
  • Ocado also unveiled updates to its fulfillment operations that will allow shoppers to get a wide assortment of products delivered faster, executives said.
  • Kroger CEO Rodney McMullen said in prepared remarks at Ocado’s media event on Wednesday that his company and Ocado are currently exploring ways to deploy these innovations in its online order processing system.

Overview of the dive:

Kroger has only just begun opening automated e-commerce warehouses, but its facilities and rollout plans may soon be updated, judging by the latest innovations unveiled Wednesday by technology partner Ocado.

In a presentation from Ocado’s hometown of London, executives showcased several new technology updates to its Ocado smart platform aimed at reducing costs and sending more same-day orders to shoppers. All updates will go live this year and can be fully integrated into partner company fulfillment centers by the end of next year, said Ocado Group CEO Tim Steiner.

The company’s newest execution robot is an “ultra-light” model that requires significantly less energy to operate, Steiner said. The robots, which are in pre-production mode and have more than half of their parts 3D printed, can operate in a wider range of facilities than from Ocado previous models, including micro-distribution centers.

Along with the lighter bots, there are lighter achievement grids that the company says it can build in more building types in weeks instead of the months Ocado’s current systems take to install.

“As we remove significant quantities of materials from our sites, we will be able to install the Ocado smart platform in a wide range of existing buildings, reducing the time and costs associated with constructing purpose-built facilities,” said Steiner said.

Ocado is also rolling out a pick and pack robot that will sit on top of its fulfillment grids, allowing the company to mix products and assemble orders in the same space. The move will save square footage and reduce labor costs inside fulfillment centers, Steiner said, by reducing the number of manned picking stations he needs. The robots, which could potentially help select up to 80% of available products using machine vision and advanced sensing, will assemble orders during business hours and, to make sure they stay busy, will organize the assortment during off-peak hours, Steiner said.

Along the same lines, Ocado has also developed a process that automates the loading of order bins onto delivery frames for dispatch, entrusting a “physically demanding” step to Ocado’s robots, said James Matthews , CEO of Ocado Technology.

Steiner said the company’s new robots will help reduce long-term labor costs by 40% over the long term. This could be important for Kroger, which has been questioned by Wall Street analysts over the high cost of its network. build on. The grocer currently operates automated warehouses in Florida and Ohio, and has more than a dozen additional customer fulfillment centers announced in markets across the country.

Courtesy of Ocado

Advanced robotics and efficiency metrics, powered by many proprietary technologies, have been Ocado’s calling card for years. But the company is facing growing pressure from fast-paced businesses and traditional grocers to focus more on same-day and on-demand orders. Ocado has trialled a “Zoom” service powered by automated micro-fulfillment centers (MFCs) in London and plans to build an MFC in South Florida, though it remains committed to its vision of centralized fulfillment. a wide assortment of products.

With this in mind, Ocado is introducing routing updates that will provide fast service from its range of facilities. This includes a “Swift Router” system that will pack orders requiring more immediate delivery into the same vans that contain its deliveries with longer lead times, then prioritize deliveries accordingly. Executives said this approach leverages the efficiency and wide product range of Ocado’s facilities for on-demand orders.

The update also includes a distribution framework that will maximize the assortment that its smaller facilities can offer. Under its “Ocado Orbit” system, smaller facilities hold a limited number of SKUs but are collectively part of a “virtual fulfillment center” that combines items from multiple facilities and offers shoppers around 12,000 products. Trucks will drive between the facilities, loading and unloading products as determined by the company’s artificial intelligence systems.

“Ocado Orbit enables smaller, closer-to-the-customer fulfillment centers to be able to deliver wide range, short lead times and value simultaneously,” the company noted in a statement.

Throughout Wednesday’s presentation, Steiner talked about the “trade-offs” consumers and retailers have to make in grocery e-commerce between speed and cost, size and efficiency, and other areas. . The company’s new innovations, he said, aim to eliminate trade-offs — a bold claim that will be tested in the years to come as digital shopping continues to evolve.

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