Daily Management Review

Ocado To Introduce ‘Mini Robotic Warehouse’ With Standard Productivity


Ocado’s new technology at warehouse could reduce the risks, hasten deployment, and offer further possibilities.

Source: flickr.com; (CC BY 2.0)
Source: flickr.com; (CC BY 2.0)
Ocado is an online grocer platform in Britain, which will be starting its first ever “‘mini’ robotic warehouse”. The new venture will be located in western England’s Bristol by 2021; this means the online grocer will be empowering its warehouse technology to roll out “more quickly” in a “bigger range of locations”.
Even though, Ocado makes up only “1.4% share of Britain’s grocery market”, the company’s technology has affected “8.1 billion pound” stock market valuation of the group whereby enabling it to strike deals with other supermarket franchises across the globe which includes Kroger from the U.S.
In the words of “Bernstein analyst Bruno Monteyne”:
“This is not about Bristol, but about what it says for its technology biz”.
According to Monteyne, launching “a larger warehouse” within thirteen months time would mean the project will complete in half the time than it typically takes to deploy a warehouse of that size. Moreover, choosing Bristle as the centre for Ocado’s “customer fulfillment center” would triple the number cities that Ocado could possibly address. As Monteyne thinks:
“It is about reducing execution risk, speeding up deployment and extending materially the applicable territories for the international deals”.
According to Reuters report:
“The Bristol CFC, which is being built in an existing 150,000 square feet warehouse, will be Ocado’s sixth and is expected to go live at the end of 2020 or early 2021. It will support around 815 jobs in the local area”.
Furthermore, the mini CFC’s capacity will be to process more than thirty thousand order in an week, while the CFC 5 site of Ocado, currently “under construction at Purfleet, east of London”, is likely to process nearly “85,000 orders” on a weekly basis. However, Ocado doesn’t see the smaller size of Bristol based warehouse to be an issue as it expects to see the productivity matching the level of its “standard facilities”.
In August, Ocado complete a joint venture with Marks & Spencer worth “1.5 billion”, as a result of which “Ocado Retail” came into existence. The customers in Bristol along with its neighbourhood will get to choose from “a wider range of options for delivery”. While Ocado informed:
“In the future, mini-sized CFCs can complement the standard-sized CFCs to build a fulfillment network including in areas not suitable for larger CFCs”.