Ocado Group + Celonis World Tour Spotlight

Context: Reinventing online grocery

From robotics to big data, machine learning, and AI – Ocado Group puts technology to work in everything they do.

The UK retailer is a household name in the world of online grocery and e-commerce technology, trimming their operations for efficiency by running fully automated fulfillment centers.

Hundreds of smart bots navigate these warehouses the size of several football fields, following AI-backed patterns to select and pick the right grocery items and complete customer orders in a matter of seconds. 

At the heart of their operations is their Ocado Smart Platform (OSP) — an end-to-end commerce, fulfillment, and logistics platform that combines robotics, AI, and machine learning to streamline the process from order placed to goods delivered.

Ocado is providing both platform and warehouse technology to supermarket groups across the world, partnering with brands like Kroger in the United States, Aeon in Japan, Casino in France and Coles in Australia. 

Challenge: Thousands of products, billions of data points

“Everyone thinks that online grocery would be easy ,” said Matt Smith, Head of Analytics, Ocado Group during his keynote interview at the Celonis World Tour 2023 in London.

His job is to help their partners succeed in using Ocado’s platform and drive a “profitable online grocery business.” Which means: maximizing productivity, cutting costs, and slashing food waste. 

Online grocery comes with a laundry list of challenges, as experienced by Ocado’s own supermarket brand. In the UK, Ocado’s home turf, grocery shoppers typically order 45 items per order, said Smith – and aren’t shy of last-minute changes.

All these items come in different shapes and sizes, carry different barcodes, and have different shelf lives and temperature regimes.

“Just trying to assemble those orders, and deliver them in the one-hour slot the customer has chosen, has its own complications,” said Smith.

But complexity strikes in the backend, too – when it comes to analyzing and taking action on the intel generated with every order placed.

“Just one single warehouse generates 75 billion data events every single day.”

Given the rapidly growing number of Ocado’s fulfillment centers around the world, streamlining processes for their partners doesn’t get any easier.

“We’ve opened three warehouses in three different territories in the last week alone,” said Smith. “As we scale, our challenge is to keep up with that, help our partners spot and fix those issues and become more efficient.”

Celonis checked all the boxes in Ocado’s search for a platform that could scale at the speed of their business.

Since the fall of last year, the company has used process mining to help drive their partner's success, optimize processes, and unlock cash value — with a projected hundredfold return on investment.

Start quickly, scale infinitely: Ocado finds savings in onions and garlic

Start in a focused area to quickly realize value and scale from there — that’s the advice many companies who have made process mining work for them give. And Ocado took a leaf from their playbook: Their success story started with onions and garlic. 

Connecting Celonis to their largest warehouse in the UK, they discovered immediate value opportunities, said Smith. “One of the things we found was that certain products we were selling took a lot more time to process than others.” Triple the time to be exact.

The reason? These products (mainly onions and garlic) came in a net with a barcode on a tag – leading to Ocado’s smart bots not being able to scan them two thirds of the time, and the on-site team needing to scan them manually. 

By optimizing the barcodes for the top 5 of their SKUs in their UK warehouses alone, Ocado saved £100,000 in annual labor costs. A quick win that shows that fixing micro-inefficiencies at scale can make a big difference to the business.

“We checked every one of our warehouses in the world for similar patterns and were able to play this back to our partners who made their own fixes as well,“ recounts Smith.

And he adds:

“Celonis is the right tool if you want to view your process end-to-end. There‘s no other platform we can do this with."

Solution: Unlocking value at scale for every Ocado partner

Celonis process intelligence — combining process mining, AI, automation, and machine learning — compliments Ocado’s high-tech portfolio, enabling the company to fast-track and scale their optimization efforts for all grocery partners:

“When we spot an issue here in the UK or with one partner, we can very quickly look at all of our partners around the world with Celonis and help them fix it“, said the Head of Analytics.

Take Procurement for instance, where partners were overriding Ocado‘s AI-driven recommendations for purchase orders. The overrides resulted in partners holding excess inventory, generating more waste and unnecessary costs.

Armed with insights like these, Ocado can quickly take action at scale: be it by proactively guiding their partners, or by optimizing their own warehouses. “Celonis doesn't let us do anything we couldn’t do ourselves, but it lets us do it at scale and so much faster.“ 

Ocado Group’s C-Suite has bought into process mining as well, along with the rest of the business. Not only because of the quick wins they’ve seen but the ease of use.

“We’ve never managed to implement a new software system at Ocado so smoothly,” Smith said. 

Doubling-down on insights Celonis provides to scale value is now at the top of Ocado’s agenda:

“So far, we’ve framed value of at least 100 times the investment we’ve made in Celonis."

Vision: Putting Celonis at the center of everything they do

Given this strong outlook on ROI, Smith and his team have ambitious plans with Celonis. In their quest to continuously improve their Ocado Smart Platform, they’re hoping to deploy Celonis end-to-end across the platform, optimizing commerce, fulfillment, and logistics. 

This is why Process Sphere, one of Celonis’ latest innovations revealed at last year’s Celonis user conference Celosphere, gets them excited.

“Currently, we look at our warehouse processes in isolation — stock-in, inventory management, and stock-out.”

Getting a 360-degree view through Process Sphere to understand how these processes are interconnected, would help them to “look at these upstream and downstream interactions much more easily,” said Smith. “We believe this will be game-changing for us.” 

And as Ocado Group is scaling their warehouse presence, Smith sees an opportunity to use Celonis as a playbook for new-joiners to accelerate partner success.

“We want to codify the 20 years of knowledge we have so that anybody who joins the company can support our partners, using the information available in Celonis.”

Following Ocado Group’s tradition to make powerful new technologies part of their DNA, the retailer envisions putting Celonis at the center of everything they do:

“Ultimately, we’d like to put Celonis everywhere in the group end-to-end, (optimizing) business processes as well as our platform.”

Intrigued? Find out why Celonis is the market leader in process mining.