Ocado has developed a ‘Smart Platform’ (OSP) that harnesses various technologies, including AI, robotics and automation, to aid in more effective and efficient distribution of food, and to help to with purchasing and eating decisions by working towards consumer interest and behaviour (“The Ocado Smart Platform (OSP)” 2023; Marr 2022).
To help with efficient distribution, Ocado uses automated warehouses with robots that pick and pack groceries. Fleets of bots collaborate (in what is known as ‘The Hive’) to pick a 50-item order in under 5 minutes (“The Ocado Smart Platform (OSP)” 2023). They then carry this order to a station where orders are packed, and loaded ready for dispatch. Following this, Ocado employs ‘Last Mile Technologies’ that use AI to optimise the load of every vehicle for grocery deliveries, through accounting for traffic conditions, vehicle weight, emissions, and vehicle fuel level to ensure the quickest route to customers (Marr 2022).
Ocado also uses technologies to help with purchasing decisions, and to work towards consumer interest and behaviour through having a personalised online journey (“The Ocado Smart Platform (OSP)” 2023). For example, automated warehouses help predict what customers want and need and adjust orders from suppliers accordingly. Their AI, through insight into real time availability, helps to understand what products are in stock so that they can give customers the groceries they expect. Their grocery-specific smart features also are personalised to individual customers, enabling customers to find new choices through intelligent suggestions, help find their favourites, provide reminders for frequently purchased products at checkout, and anticipate when they are running low. Overall, OSP contributes to more choice, fresher food, and increased convenience and flexibility for customers to generate ‘delightful customer experiences’.
Another benefit of the OSP is also a reduction in food waste through AI powered demand forecasting and replenishment. For example, the OSP determines the food that customers want and need so that Ocado can then accordingly adjust orders from suppliers. This is at a large scale, with the platform assessing up to 20 million forecasts per day to reduce any overstock and waste (“The Ocado Smart Platform (OSP)” 2023). In addition, machine learning algorithms help to attain the optimal time for customer discounts to get rid of their inventory or help Ocado manage and monitor their donation effort of produce that is nearing expiry. Artificial intelligence and machine learning also help Ocado to reduce food waste by making sure that their products are both stored and delivered at temperatures that safeguard against the likelihood of their spoilage (Marr 2022). Together, machine learning, artificial intelligence, and data analytics help Ocado to reduce its food waste to losing only 1 in 6,000 produce items.
However, it is difficult to assess the potential ease of scale up for this tool. Tools from the private and the commercial sector often lack information and transparency on barriers and challenges, and concentrate instead on opportunities and successes. Therefore, conclusions on ease of scaling cannot be drawn from the available information, and further research is required to established this. |