Grocery technology pioneer Ocado, has been able to slash food wastage rates to just 1 in 6,000 items by using data analytics, machine learning and artificial intelligence to manage its produce.
“Here in the U.K. the size of the problem is: 86 million chickens, 438 million loaves of bread, 3 million slices of cheese, 1.3 million apples, 520 million pints of milk, over 2 billion potatoes per year,” says Suzanne Westlake, head of CSR at Ocado. “We would always rather see food in someone’s belly than in the bin.”
Clamping down on food waste
Using machine learning-powered forecasting and optimisation, Ocado’s end-to-end ecommerce, logistics and fulfilment platform can work out the food that customers actually need and ensure that excess produce isn’t ordered from suppliers.
James Matthews, CEO of Ocado Technology, says: “In our webshop, an advanced AI helps us to understand our customers’ shopping habits. An ensemble of advanced forecasting engines accurately predicts demand for each of our 54,000+ different products so we don’t order surplus from suppliers.
“We generate over 20 million forecasts each day. We are looking for the sweet spot that maximises freshness and availability for our customers, while minimising waste and stock cover. This also allows us to predict sales and discount the right products at the right time to make sure all the stock that we do have is being sold.”
In its warehouses, Ocado has deployed a range of AI-driven systems and robotics to ensure that food arrives to customers on time and is fresh so that it doesn’t end up being thrown out. Matthews continues: “Our order fulfilment technology known as The Hive, and the unique bot swarm which operates upon it, allow us to make sure food can come in and be picked, packed and on its way out again to customers within five hours.
"In fact, the thousands of bots collaborate on the grid to pick a single customer order of around 50 items in just five minutes. Our bots whizz around the grid at a closing speed of up to 4 meters per second. The faster you can pick, pack and deliver, the less likely you are to see melted ice cream, for example.
Tracking its delivery fleet
Food wastage can also be caused when products are incorrectly stored within the warehouse or delivery vans, although Ocado has implemented simulation and predictive modelling to solve this.
“This helps us to make sure items which come in are kept in the precise temperature-controlled environments that they should be in, effectively eliminating waste through being stored at an incorrect temperature, in the warehouse or en-route to the customer.”
Elsewhere, machine learning optimisation tools enable the optimal and real-time routing of thousands of vans each day. Matthews says: “We make 9.5 million routing calculations per second. Every time a customer places or updates an order, all possible routing and delivery options are calculated in the time it takes for the page to refresh.
“Routing plans adapt in real-time, responding to a myriad of factors including changing road conditions, traffic, fuel levels, etc. This makes the last-mile a highly efficient, seamless journey. The result is extremely low levels of food wasted in transit.”
As part of its freshness guarantee, Ocado won’t sell fresh produce that only has a few days before it expires and will donate it to people in need. “Instead, it will get automatically flagged and redistributed to local food banks or animal parks,” says Westlake.
“We work with a wide variety of over 30 carefully selected Food Partners, hyper-local food banks, food redistribution charities, and Wildlife Parks to take our food waste down to practically zero, and help feed people who really need it. In the last 3 years we have redistributed almost 4,000 tonnes of food.”
Looking ahead, Ocado will continue to amplify its social good efforts. Westlake concludes: “We’re continuing our community support and are working with Honesty Shops, which is run by food bank Ediblelinks.
“For many it is an alternative to food bank with no stigma attached, which helps alleviate and also prevents crisis situations. These allow local community members access to food and other associated items such as nappies and baby milk formula which they may not be able to purchase otherwise from retailers on the high street.”