Ocado Group PLC says new bots can slash labour costs by 40%

Ocado Group PLC (LSE:OCDO) gave customers and investors a glimpse into its future today, with updated robotics and hi-tech van routing systems to play a key part.  

Speaking in a presentation today, chief executive Tim Steiner unveiled several new innovations that would allow the company to reduce costs and improve customer delivery times.  

The new 600 Series Bot, an upgrade on the 500 Series Bot already seen at a site in Bristol, will be faster, cheaper, and lighter than its predecessor in retrieving goods on its grid, ready to be picked for delivery, said Steiner. 

It has also developed a robotic arm, automating the “most labour-intensive jobs in warehouses,” according to Steiner, with the expectation that the arms will be capable of picking 50% of its product range by the end of 2023.  

Steiner added that these new developments will “reduce labour costs by 30% in the medium term and 40% in the long term.”  

Ocado added it has also developed a way to include short and long lead time orders on the same van to ensure all customer demands are met.

The company said it will achieve this through its automated despatching system, which will pack longer lead team orders over night ready to go in the morning, giving room in the day to pick last minute orders up until the final second before it needs to leave the hub. 

It pointed out that this is much more cost effective and provides greater options for the consumers who want an on-demand service in comparison to the ‘gig’ economy of delivery, which it said provides neither of these benefits.  

Shares in London listed Ocado were up 5.46%, changing hands at 1463p in afternoon trading.