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Inside a 21-acre warehouse on the outskirts of the capital, a small army is preparing for Christmas. The building, in Hatfield, is home to Ocado.
Set up nine years ago, the firm controls 25 per cent of the online grocery market and is growing at a rate of 35 per cent a year. Within Zone 1, it delivers to one in 12 homes and its busiest areas are Southwark, Wandsworth, Archway and Hampstead.
However, what lies within its warehouse has been something of a trade secret. Instead of relying on large numbers of staff, Ocado has what it says is the world's most advanced picking system.
At its heart is 10 miles of conveyer belt carrying specially-designed crates — each containing three open plastic bags into which items are placed. The robotic, software-guided system allows the 400 staff to send out 88,000 orders a week. The warehouse is split into aisles, each with six people and each turning over about £30 million per year — the same as an average supermarket.
As crates travel round the warehouse on the conveyor belt, they are automatically sent past shelves holding the goods they require using a barcode system. At the end of the process the crates are lifted into wire cages by human workers and then loaded into vans.
“We knew there was lots of stuff in other industries that was very smart, like the car industry, but nobody had brought it to grocery shopping,” said Jason Gissing, who set up Ocado with friends Tim Steiner and Jonathan Faiman in a single-room office in Victoria in 2000.
The key to the operation is the software controlling almost everything in the warehouse and the 150 programmers who work on it. On-screen messages are in Polish and English as 60 per cent of the workforce is from Poland. Ocado's operations controller Paul Stewart said: “We are constantly looking at how to improve and tweak the software, and it is incredibly clever.
“For instance, we work out what order to put things in the bags so fragile food isn't crushed. The system also automatically works out the route for each van, and even what order crates are loaded onto it. This means heavy boxes are always at the back, and chilled and ambient foods are kept on separate sides of the van.”
More radical plans are under discussion. “We have this conversation internally quite often about being a postbox,” said Mr Gissing. “It would be great if customers could get the book they want, or the jeans they want when their groceries are dropped off.”
Although the warehouse is experiencing its busiest time of year, Mr Gissing, who lives in Notting Hill with his wife and four children, is wary. “I really, really don't like Christmas,” he said. “Potentially we can ruin it for people, and that makes me very nervous.” In an attempt to avert disasters, Ocado is deploying emergency vans to respond to distress calls from shoppers.
Mr Gissing said: “We are actually only at half capacity here, and we firmly believe that in two to three years, we will be double this size.”
Reader views (4)
what is wrong with these people???? Ocado is the best thing that has ever happened to us!
- Filippa, London, 24/11/2009 20:56
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Everytime I order from them the goods even cereal, which is meant to last months has a best before of a few weeks. I suspect they get their stuff cheap from Waitrose as its close to its sell by date?
My Mum used to nanny one of the owners children and some of the stories...her room had no curtains and she was told to make do. HuH! All that money and still cannot treat people right.
- Cj, london, uk, 24/11/2009 01:55
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Gave up on them because I never could get a delivery booked at a 'popular' time. Do you think Christmas is a 'popular' time? Now let me think. Good luck to them.
- Fred, London, 23/11/2009 10:26
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The smart move was supplying their groceries from Waitrose, providing an instant cachet for their service. I find, however, that goods that need to be kept flat are often put in on their sides with the goods leaking into the shopping bag and not only being ruined but contaminating other products in the bag. Perhaps these should be packed by hand.
- Squiz, Islington, 23/11/2009 08:42
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