Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Lighter robots and hi-tech routing - Ocado innovates to deliver growth

Published 26/01/2022, 15:08
Updated 26/01/2022, 17:26
© Reuters. FILE PHOTO: An Ocado truck returns to the Ocado depot in Hatfield, southern England July 21, 2010.  REUTERS/Suzanne Plunkett

© Reuters. FILE PHOTO: An Ocado truck returns to the Ocado depot in Hatfield, southern England July 21, 2010. REUTERS/Suzanne Plunkett

By James Davey

LONDON (Reuters) -From lightweight robots to hi-tech van routing systems, British online supermarket Ocado (LON:OCDO) unveiled a suite of innovations on Wednesday it predicted would raise its returns and win new customers for its technology.

Ocado has already struck deals to provide its technology to supermarket groups in eight countries, including Kroger (NYSE:KR) in the United States, Aeon in Japan, Casino in France and Coles in Australia, driving its market value to 10.7 billion pounds ($14.5 billion).

The stock was up 5.4% at 1558 GMT.

The latest innovations include a robot that is 80% lighter than its predecessor and described by the company as "the world's lightest and most efficient grocery fulfilment bot," plus lighter warehouse grids for the bots to run on.

It said robotic arms had also been developed that work with the bots to automate the picking and packing of customer orders directly from the grid.

The firm expects the robotic arms to be capable of picking close to 50% of its product range by the end of next year and 80% in the long run.

Ocado has also automated the process of the loading of customer orders onto delivery frames ready for dispatch.

Other innovations include a routing system that enables the delivery of both short lead-time orders and larger, longer lead-time orders from the same van, and a virtual distribution centre that cuts the costs associated with in-bound stock.

"GAME-CHANGING"

CEO Tim Steiner, who co-founded Ocado two decades ago, said the new capabilities would allow the group and its partners to install platforms much faster and in simpler, highly optimised buildings, requiring lower capital expenditure.

He said partners would also be able to achieve greater product throughput from the same or smaller building footprint, reduce their labour costs by 30% in the medium term and 40% in the long term and address labour shortage challenges.

"We've shattered the trade-off between big warehouses and small warehouses, creating a way for small warehouses to operate close to the customer but at the same time sharing the economics of a large warehouse," Steiner told Reuters.

He said any warehouses that partners want to open from the end of 2023 will be able to take advantage of all of the new capabilities. All the innovations can also be retrofitted to existing partners' warehouses.

© Reuters. A robotic picking machine is seen inside the Ocado warehouse in Erith, London, Britain, October 13, 2021. REUTERS/Paul Childs

"For Ocado the game-changing capabilities... mean that we'll be able to grow our current opportunity as well as reach new types of markets and penetrate them faster than would have been possible previously," added Steiner.

($1 = 0.7400 pounds)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.