Since its foundation back in 2000, online groceries deliverer Ocado has distinguished itself from competitors by having no high street presence – relying exclusively on its network of warehouses and picking centres to meet customers’ needs.
The firm has always seen itself as an IT business with a retailer attached – according to technology director Paul Clarke, who previously oversaw a project to build a Google-based business intelligence dashboard to meet specific internal needs.
But as more people shop online, Ocado has turned to its warehousing systems as ripe for a makeover. Currently, it relies on boxes travelling around its warehouses – often over great distances – with humans filling them as they go. However, it is rapidly running out of time and space to address all its orders in the timely manner consumers expect.
“Efficiency is the aim,” explained David Sharp, head of technology 10x, Ocado's internal development programme: “We have to create more capacity because, essentially, Ocado today has to ration how customers use it.”
In the never-ending quest for efficiency, Ocado now plans to do away with its traditional human-centric picking systems in favour of automated robots moving around a compact, stacked vertical structure, which it calls a hive.
The hive comprises a honeycomb structure, with robots moving boxes around and dropping them to the bottom of the warehouse for people to fill.
“Doing this lets you have a dense and efficient warehouse,” explained Sharp. “We are building the first in Andover, in the final stages of testing. At full capacity, it can handle 65,000 orders a week – which is equivalent to £350m sales a year.”
Ocado also has plans to build a larger version at Erith, in Kent. When complete, that will be able to handle 200,000 orders a week, bringing in £1.2bn per annum at full capacity – which comes close to doubling its current sales.
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