Outsourcing automation: how Ocado plans to transform the logistics landscape

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Two new automated warehouses are just the beginning of Ocado's transformation into a provider of hardware platforms, explains CTO Paul Clarke, as the company introduces a wireless controller capable of managing 1,000 robots per access point.

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At Ocado’s two new warehouses, thousands of machines will autonomously navigate a maze of steel conveyor belts, rolling along their tracks at varying speeds and parking themselves in bays to let other mechanical workmates pass them by. Computerworld UK speaks with Ocado’s CTO, Paul Clarke, to explain the company’s lofty plans for selling its new automated logistics platform globally, and what this could mean for the wider world of retail.

Ocado first filed patents for its “modular, scalable, physical fulfilment solution” in early 2015. Just one year on, its Andover facility is operational and in the testing stage. The Erith warehouse in southeast London is set to open later.

“We realised we had to develop a completely new hardware solution for building these automated warehouses in a more scalable way,” Clarke tells Computerworld UK. “Particularly for markets where you need to start smaller and scale up, but not sacrifice any of the long-term efficiency and economies of scale we enjoy.”

To coordinate the machines speeding around the facilities, Ocado worked with product design company Cambridge Consultants to create a wireless controller capable of managing up to 1,000 robots at once.

Each of the controllers acts as a sort of base station, operating on the unlicensed 5GHz Wi-Fi band to ensure that communicating with the robots is extremely low latency – and allowing them to move with a great deal of precision.

The robots needed more precise communication than was available using existing Wi-Fi technologies, and so Ocado and Cambridge Consultants designed the new wireless controller. By running on un-crowded, license-free spectrum, the technology can be deployed quickly anywhere in the world. The devices can ‘speak’ to a lot of machines at any given time, and allocate bandwidth according to the needs of each.

Why push forward with the automated warehouse now? Clarke believes it is the “next logical step” for Ocado. The company, he says, has learned much since it began shipping groceries in 2002 – and these days businesses are knocking on Ocado’s door, asking to get them online in the same way the firm did for the web operations of British supermarket Morrison’s.

“The answer was no, we couldn’t do that with the platform that we had or operate ourselves in the UK, but now we absolutely can using the new platform that we’ve built,” Clarke says.

And it intends to sell this automation system globally, as part of the Ocado Smart Platform programme.

“We have arguably the most advanced automated solution for doing grocery fulfilment anywhere in the world,” Clarke says. “What we’re now doing is effectively leapfrogging ourselves because this is part of staying disruptive – as a disruptor in the retail sector good is never good enough.

“We’re doing it to drive our efficiency and competitiveness and doing that in the UK – but also it’s one half of the new platform that we’re going to use, around the world and for other grocery retailers.”

“We have been talking to a significant number of companies around the world,” Clarke says. “The level of interest is very significant, and we expect to find multiple deals, in multiple territories, in the medium term.”

The benefits, according to Clarke, are quite clear. By adopting Ocado’s technology, businesses can build their online presence quickly and to a large scale. They can also keep a tighter grip on delivering fresh produce as all of this data is monitored, and offer a wider range of products compared to the shelf space of even the largest supermarkets.

All these machines working in tandem will produce a lot of data to be crunched. SCADA systems will monitor and control the robots, and the data gleamed from that will want to be kept for more deep and long-term analytics.

It will help businesses to monitor their growing application of many thousands of robots – to keep close watch on the effects of new firmware releases and control software, for example – and so Ocado will be collecting and storing all of that data “in perpetuity”.

“Not just for ourselves, but in the future, for all of the Ocado Smart Platform customers as well,” Clarke says. “We’re talking about many, many petabytes of data here.”

Ocado builds most of its systems in-house. Because of this, the company can collect an enormous amount of data from almost every aspect of what it does. "We collect a huge amount from the front end, from the supply chain, data from the warehouses, and from the last mile," he says.

All the data that comes in is now stored on the cloud. Ocado is using Google for the data side, AWS for compute, and Salesforce for other applications. “We’re very cloud-centred as well as having our on-premise data centres,” Clarke says. “Our strategy is to put all this data into a huge database in the cloud, then to be able to run the smart and predictive analytics we’ve run on-premises for many years.”

What else is next for the online retailer? Well, Ocado sees potential outside of the supermarket. The scalability and precision mean that where machines need to be deployed, monitored and controlled, there may also be space for the company's controller.

“Some of these technologies going into this new platform and the warehouses we’re building definitely have applications far beyond groceries,” Clarke explains. “We’ve got enough on our plate at the moment, but that doesn’t mean to say we’re not thinking of those spinoffs and in many cases patenting them as well.

“We are exploring some of those ourselves and through Cambridge Consultants – and we are open to licensing opportunities for that technology.”

Clarke says the new warehouses will take machine-to-machine communications to “another level” - and that the company's new warehouses are an example of AI, the internet of things and robotics joining up together.

“One of the really interesting opportunities is the intersection between the internet of things, artificial intelligence, and robotics,” Clarke says. “When those three technological tsunamis collide, you’ll end up with smart, autonomous vehicles or machines that are plugged into the outside world via the internet of things.

“You could say that’s the intersection we’re seeing played out in the new warehouses, those three things coming together.

“There are lots of advances happening in robotics, in AI, whether it be deep learning or natural language processing, and the rest of the AI family of technology, and there are lots of advances happening in the internet of things.

“It’s coming together in a very exciting way.”

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