REG - Ocado Group PLC - Ocado Re:Imagined

OcadoAnnouncement

26/01/2022 15:10

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RNS Number : 7473Z  Ocado Group PLC  26 January 2022

OCADO GROUP PLC

26th January 2022

 

Ocado Group plc

Ocado Re:Imagined - the next leap in innovation

Today, Ocado Group is  unveiling the next leap of game-changing technology
underpinning the unique and proprietary Ocado Smart Platform ("OSP").

The technological breakthroughs and capabilities announced today will
collectively mean that our OSP partners will be able to:

-       meet the full range of customer missions faster and with lower
operating costs

-       enable short lead time deliveries for a larger proportion of
sales

-       drive faster speed to market and faster ramp

This evolution of the Ocado Smart Platform is one of the most significant
steps forward in technology in Ocado's history and re-affirms OSP as the
fastest, most flexible, most sustainable and most cost effective suite of
solutions for operating online grocery businesses. Uniquely developed for the
demands of the grocery space by our dedicated technology and engineering
teams, these latest innovations to OSP are the result of cutting-edge research
and development, as well as the accrued experience and know-how in driving
unmatched efficiency across the entire online grocery delivery space over the
last 20 years of Ocado.

The latest ground-breaking innovations include: the world's lightest and most
efficient grocery fulfilment bot; dramatically lighter grids; robotic arms
that pick groceries directly from the grid, a solution that automates the most
physically demanding job in a Customer Fulfilment Centre; the world's first
virtual distribution centre; a capability for short lead time deliveries; and
a capability for powering retailers' own storefronts with the intelligence
behind the Ocado Smart Platform.

These innovations will allow Ocado Group and our OSP partners to install the
platform much faster and in simpler, highly optimised, more cost-effective
buildings, requiring lower capex, with a faster time to go-live. In addition,
partners will be able to achieve greater throughput from the same or smaller
footprint, lower labour costs, and address labour shortage challenges.

These advanced capabilities mean that Ocado Smart Platform partners will be
able to offer their customers an even better online grocery proposition across
choice, short lead times, and value, with the best economics, thanks to the
structural and systemic advantage that the reimagined OSP gives them.

For Ocado Group, Ocado Re:Imagined offers higher returns from lower capital
costs and operating expenses, an even greater Total Addressable Market
available to the business, and the expectation of an acceleration in the
sign-up of new partnerships in the years to come, in addition to further
orders from existing OSP partners.

 

A replay of the Ocado Re:Imagined event will be available on the Ocado Group
website
(https://protect-eu.mimecast.com/s/yW_7CPNPQHRQ1ZC08xOI?domain=ocadogroup.com)
www.ocadogroup.com (http://www.ocadogroup.com) .

 

A summary of our initiatives is as follows:

 

·      The 600 Series bot is the world's lightest and most efficient
grocery fulfilment bot, built using our expertise in additive manufacturing,
with more than half of its parts 3D printed. It is cheaper to build and
operate than its predecessor, ultra-energy efficient, and high performing. The
600 Series bot has continual software updates and on-demand parts which means
higher utilisation of each bot. This lighter bot unlocks a cascade of benefits
for optimised CFC design. This will enable the reimagined Ocado Smart Platform
to be installed into simpler, more cost-effective buildings, as well as in
micro fulfilment centres near the customer.

 

●     The 600 grid and optimised site design. The lightweight design of
600 Series bot allows us to build lighter grids, faster. These new grids can
be built in parallel, taking weeks, not months, to install and at a much lower
cost. Because the 600 Series bots are highly energy efficient and require a
lot less power to achieve the same throughput from the same footprint, new
sites will require less chill equipment, lowering energy consumption levels
and overall construction costs. The dramatic reduction in material used for
our lighter grids not only makes site design easier, it  also allows us to
install our new technology into simpler buildings, significantly reducing the
timelines and costs associated with the construction of purpose-built
facilities.

 

●     Automated Frameload. This process automates the loading of totes
with ready-for-delivery customer orders onto delivery frames ready for
dispatch, replacing the manual process currently in place. The automation of
this process leads to lower labour costs and higher productivity per employee.

 

●     On-grid Robotic Pick. This process automates the picking and
packing of customer orders directly from the grid. For this to work in
grocery, robotic arms need to be able to pick tens of thousands of products of
varying shapes, sizes, weights, and fragility and pack them densely in bags
with human precision and accuracy. Ocado Group has developed the
technologies  - machine vision, deep reinforcement learning and advanced
sensing - which are required to pick and pack grocery items in a highly
efficient and cost  effective way without any prior knowledge of what those
products are. The benefits of On-grid Robotic Pick include lower labour costs;
reduced footprint; higher throughput in the fulfilment centre; optimisation of
warehouse design leading to lower construction costs; and the ability to
automate stock consolidation during off-peak hours as a key enabler for Ocado
Orbit (see below) and consolidate stock better in off-peak periods.

 

●     Ocado Orbit: the world's first Virtual Distribution Centre. One of
the advantages of OSP is that it does not require a network of regional
distribution centres to deliver products to the fulfilment centre. Product is
brought by the manufacturer to the CFC directly. Manufacturers only find this
cost-effective, however, when they can deliver products in sufficiently large
quantities. Under the current model, this means that CFCs need to be a certain
minimum size to achieve the necessary economics for suppliers. Ocado Orbit
addresses this challenge by creating a system whereby multiple smaller
footprint warehouses share a "virtual distribution centre", which will use the
latest software in AI and Machine Learning, in a seamless supply ecosystem.
Each warehouse acts as a primary supply hub for a fraction of the stock but
all have access to the combined range, offering their customers the choice of
a large range. Ocado Orbit enables smaller fulfilment centres, closer to the
customer, to be able to offer a large range, short lead times, and value
simultaneously.

 

●     Ocado Swift Router is an innovation by Ocado Group that enables
delivery of last minute, short lead time orders as well as larger, longer
lead-time orders, all from the same van. This means that partners need no
longer make a trade-off between the benefits of short lead time orders and a
today-for-tomorrow service and customers can have choice, value and lead times
that work for them all together for the first time.

 

●     Ocado Flex means that partners can use their own webshop and app
solutions while taking advantage of the intelligence of OSP. As a result, they
no longer need to write-off historic investment in their webshop to be able to
benefit from OSP's market-leading customer proposition.

 

Financial Implications

We do not expect these initiatives to have a material impact on FY22 results.
However, partners ordering standard-sized CFCs today for delivery in H2 2023
will have the following features enabled: 600 Series bots; the 600 grid and
Optimised Site Design; Automated Frameload; On-grid Robotic Pick; Ocado Swift
Router; and Ocado Flex. Orders made prior to the launch of Ocado Re:Imagined
for delivery at the end of FY23 can be retrofitted to include many of these
enhancements. We expect that the improved economics offered by Ocado
Re:Imagined will drive incremental orders and accelerate the sign-up of new
partnerships in the years to come, while increasing the Total Addressable
Market available to the business.

 

Contacts

●             David Shriver, Director of Communications, Ocado
Group plc, on 01707 228 000

●             Martin Robinson at Tulchan Communications on 020
7353 4200

 

Person responsible for arranging the release of this announcement:

 

Neill Abrams

Company Secretary

Ocado Group plc

Buildings One & Two

Trident Place

Mosquito Way

Hatfield

Hertfordshire AL10 9UL

Fax: +44 (0)1707 227 997

email: company.secretary@ocado.com

 

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