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Ocado Re:imagined - STIQs view

3D Automation Cart Software e-Grocery ecommerce Ocado Robotics Warehouse

This blog post outlines STIQs view of the new product releases in Ocado's January 2022 Re:imagined event and includes comments from STIQs presentation with Credit Suisse (equity research team) on January 31st, 2022.

Agree? Disagree? We invite your comments on this blog post!

 

On Wednesday January 26th, 2022, Ocado Group updated the world on some of its more recent developments. These broadly fell into hardware and software developments:

  • Hardware
    • 600 Series Bot
    • On Grid Robotic Pick
    • Automated Frame Load
  • Software
    • Swift Router
    • Orbit
    • Flex

600 Series Bot
Ocado 600 series

The new upgraded bot featured a 3D printed chassis, what STIQ believe to be wireless charging plate (top right hand corner), lighter batteries (the 600 series is apparently 5X lighter than previous versions) and more standard components.

STIQs view:

The 600 Series looks amazing without a shell. 3D printed parts will make it possible to move manufacturing and assembly with relative ease. Wireless charging (if confirmed) is a more expensive energy solution, but will be lighter and may also open up the potential for opportunity charging. Obviously it removes any risk for sparks and hence also presents a risk management opportunity. Another interesting aspect was the move to standard off-the-shelf components to improve pricing, maintenance and serviceability. The latter may also have been a way to design out any future supply chain disruption and hence risk reduction. Overall, the new design looks like it will allow Ocado to increase throughput and efficiencies in the cube storage hive. 
Q: If Ocado could improve their robot weight by a factor of 5X, were previous version vastly over-engineered?

Note: Apparently the 600 series includes 300 x 3D printed parts (source)

On Grid Robotic Pick 
On Grid Pick

Ocado suggested placing a picking robot on top of the storage hive. This makes sense as the crates are typically transported from the top down to floor level where the pick is executed by a picker. This would remove the transportation and increase throughput and efficiencies in pick labour. According to Ocado, the picking robot will be able to pick c.80% of the stock.

STIQs view

This solution immediately felt very intuitive and like a great move forward, but despite its simplicity in visible implementation it will be hugely complex to optimise the hive storage with a picking robot on top of the hive. In addition, as seen in the picture, Ocado will drop one storage column in favour of the picking robot. Furthermore, there were no information on how this robot would be accessed to be maintained or serviced or fixed when/if it breaks down in an awkward position. 
The picking robot is based on Ocado's investment in Kindred and Haddington Dynamics (the robot in the picture is a UR)

Automated Frame Load

This robot appeared to be based on Ocado's investment in Myrmex and is a simple replacement of robot for heavy manual lifts. Ocado mentioned this solution would be able to see if the loading frame was bent out of shape and be able to align for that.

STIQs view:

We wondered why it has taken until now to implement automated frame load, which is a fairly simple robotic/mechanical solution. Our view is that the answer is probably a PR play to display add-on "innovation". This solution is most likely slower than a human operator, but will definitely remove potential Health & Safety hazards as order totes may be very heavy at times and lifts can be awkward. The functionality that can detect wonky loading frames is interesting, but fairly standard.

On to the Software part of the presentation >>>

Swift Router

Ocado may have got feedback from the market that they need to compete with Quick Commerce or Immediacy Grocers, such as Getir, GoPuff, Jokr, etc. and Swift Router was apparently their response to this. In brief, Swift Router software would allow an OSP user to mix longer lead time orders with faster ones. For example, a van could be sitting in a loading bay waiting for a loading frame to deliver orders that were place a day earlier. When a 15minute (or 20-30min) order pops into the system it can be picked quickly and if the postcode fits with the van, placed on to the loading frame and added to the van for quick delivery.  

STIQs view:

This felt slightly counterintuitive. If you have a shop with 50k products, would you be willing to browse through multiple choices and order an item for fast delivery as opposed to going on to a Getir, GoPuff or similar with a hugely limited inventory choice of max 2-3k SKUs with fewer choices? Or, would there be two different interfaces, or is it only a way of improving delivery times? In fact, here at STIQ we had more questions than comments on this solution.

Orbit

Orbit is a hub-and-spoke solution without a hub where the spokes share inventory that has been delivered to one of the spokes. As in the image, the explanation was that different suppliers deliver to a single spoke and then that inventory is distributed across other spokes by using clever algorithms.

STIQs view:

Our impression was that this kind of lands Ocado in the middle mile landscape. So, not an MFC and not a CFC, but something in between with ambulatory inventory trucks driving between the spokes depending on demand. Furthermore, our view is also that Ocado invested in Oxbotica to explore autonomous middle mile delivery vehicles in between the spokes to drive further efficiencies. All in all, the commercial reasoning for this was a bit less clear, but it may give Ocado Solutions customers more choice in how they approach new cities or areas.

FLEX

Ocado Flex is the OSP headless architecture solution. 

STIQs view:

This felt like the most commercial solution release. As things stand (all Re-Imagine releases will not be available until the end of 2023), Ocado Technology customers have to enter a marriage with Ocado, even if they have already spun up large IT and/or Online teams. Buying into Ocado would mean that a grocer would most likely have to shutter any existing teams and investments in online grocery activities. Flex or headless architecture may solve some of these issues and allow grocers to maintain a level of control over front-end interfaces, etc. The question may be to what extent grocers have evolved their back end IT and not only their front end piece?  

Source

View the 26th February 2022 Re:Imagined event on Ocado's website https://www.ocadogroup.com/our-stories/ocado-reimagined 

+ Don't forget

... to download STIQs 2021 e-Grocery Infrastructure report that features Ocado and c.100 vendors across the online grocery fulfilment sector. This is a free report: https://www.styleintelligence.com/products/market-report-e-grocery-infrastructure-2021 

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