How Many Robots Does It Take to Fill a Grocery Order? Robot 5 Minutes... Human Two Hours...
How Many Robots Does It Take to Fill a Grocery Order?
It once took online grocer Ocado two hours to put
together a box of 50 food items. Now machines can do it in five minutes.
By Jing Cao November 6, 2017, 2:00 AM PST
The U.K.'s biggest online grocer hit a milestone this
year: Ocado Group Plc put together an order of 50 items, including produce,
meat and dairy, in five minutes.
Fulfilling a similar order at one of the company’s older
facilities takes an average of about two hours. The secret: a fleet of 1,000
robots that scurry about a warehouse snatching up products and delivering them
to human packers.
The breakthrough and ones like it could help propel the
grocery business into the modern era. The industry wants to make buying food
online as simple and commonplace as purchasing clothes or consumer electronics.
But fulfilling fresh food orders quickly, reliably and profitably is devilishly
hard. Even Amazon.com Inc., which recently acquired Whole Foods Market, hasn’t
cracked the code and recently halted its Amazon Fresh service in several U.S.
states.
Ocado, founded 17 years ago in the London exurb of Hatfield,
says automation is the only way to handle individualized grocery orders in
large volumes. The robots are the latest addition to Ocado's automation
arsenal; the company also sells software and hardware to other retailers.
So far, Ocado has no firm bites for its robots, but Chief
Technology Officer Paul Clarke says the Amazon-Whole Foods deal
"definitely increased the sense of urgency in the discussions with
prospective customers. It's underscored for them that this world is changing
and that they need to move online as quickly as they can. They're interested in
having some of that business without taking 17 years to innovate
themselves." For grocers unwilling or unable to invest in robots, Ocado
offers software that helps them set up an in-store picking system—like the one
Wal-Mart uses—with the hope that they'll eventually buy the whole package.
Today, most grocers fulfill online food orders manually—a
labor-intensive endeavor. "Having somebody walking through aisles in a
warehouse picking up things one at a time in a cart, it's suboptimal,"
says Dan Kara, research director of robotics at ABI Research.
Ocado embraced automation from the beginning. Founded by
three former Goldman Sachs merchant bankers, the company first relied on a kind
of trolley that moved among the shelves, making stops for employees to hop off
and grab the items they needed. Its engineers were concurrently building
automation technology; within a couple of years, Ocado moved to a
conveyor-based system and has continued to improve its software and add more
machines, such as cranes that move bins of food onto shelves.
Ocado's state-of-the-art facility opened about a year ago
and has automated the most labor-intensive part of fulfillment: fetching items,
a task known as picking. About 200 people also work there handling tasks
machines currently can’t, including loading and unloading trucks. Once at full
capacity, the new facility will be just as productive as an earlier, larger
warehouse that needs three times as many employees.
The fulfillment center is divided into sections by
temperature: ambient, chilled and frozen. The first two have a similar setup:
squat, rectangular robots, developed with manufacturer Tharsus, sit atop a
rectangular grid, with layers and layers of crates beneath holding the
50,000-plus products Ocado sells. The robots move at 4 meters a second (about 9
miles an hour), controlled by software that knows what items are needed at any
given time.
Each robot lowers a hook, grabs and swallows a crate then
carries it to a human, who either replenishes it if it’s empty or packs the
item into a box. That way, the packer just stands in one place and waits for
the necessary items to come to him or her. (The current robots can't operate in
sub-zero environments, so freezer items are still picked and packed manually,
but Ocado and others are working on ones that can handle the cold.)
Automation means Ocado can sell a larger variety of
products, from meal-kits to high-end frozen food. It also helped the company
cut waste; last year, Ocado says it threw out less than 1 percent of its
inventory, compared with an average of less than 5 percent for the U.K. food
retail and manufacturing sector. The software also can predict demand, so Ocado
can bring in products and immediately ship them out while they're fresh. After
years of reporting losses thanks to heavy investments in automation, Ocado
became profitable in 2014. The stock peaked the same year but has since fallen
more than 50 percent to 284 pounds ($371), partly owing to rising competition
from the likes of Amazon and Ocado’s struggle to sell its technology beyond a
few customers.
Despite the robots and smart software, Ocado still relies
on thousands of people to pack boxes, load trucks and then deliver the food.
While this provides jobs, having a thousand-plus people focused on rote tasks
comes with its own issues. In the warehousing industry, packers sometimes burn
out and look for better-paying work. They make mistakes, putting items in the
wrong boxes. And they get hurt doing hard manual labor.
Ocado is already looking to automate other parts of the
fulfillment process. It’s experimenting with autonomous vehicles to make
curbside drop-offs. Drones are another possibility.
Replacing human packers will be much harder because that
requires a robot that can duplicate the dexterity of the human hand, the
ability to grab a bunch of kale, say, without damaging it. A Silicon Valley
startup called Grabit has one possible solution: a robot that uses static electricity
to manipulate objects. Nike is testing the machines to assemble shoes, but at
$100,000 apiece, the robots are still too pricey for the grocery industry.
Ocado is working with a group of universities to test a robot arm that can pick
fruits and vegetables without bruising or injuring them (see video above).
The march to automating online groceries has begun, and
analysts say there's no stopping it. In time, Kara says, robots are "going
to be much more functional and much cheaper, and they will become ubiquitous."
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