OPINIONTechnology

Ocado, Myrmex Offcials Discuss An Important but Mysterious Deal

Investment in material handling firm was no pickup move
Photograph courtesy of Ocado

basket economics

While the news that a high-tech online grocery merchant was investing in a material-handling counterpart whose signature product is a novel system for curbside pickup might seem like a natural fit for a ready solution at the end of the online journey, representatives of the companies involved reveal that interpretation isn’t quite what they have in mind.

Precisely what Ocado will do with its investment in Myrmex Robotics will have to remain something of a mystery for the time being, says Alex Harvey, engineering director for automation and embedded systems for Ocado, the U.K.-based e-grocer. In a more general sense, Myrmex brings additional capabilities to an audacious goal requiring lots of expertise—developing an end-to-end touchless infrastructure to make efficient online grocery a reality.

“We’re really excited to have joined partnerships and to be working on this product development with all of the capability that [Myrmex] brings, and leveraging the solution that you’ve seen already, this kind of automated click-and-collect, but actually, the solution that we are developing is not a click and collect solution,” Harvey said in an interview with WGB.

The veil of secrecy, he explains, is partially about Ocado maintaining an edge in development vs. competitors, but also, about how its Ocado Smart Platform presents its solutions to partnering retailers, which include a much-watched exclusive partnership with Kroger Co. in the U.S. Kroger’s first warehouses incorporating Ocado technologies and software—a solution the retailer is betting big on providing an economically superior solution to the online grocery boom—are expected to be up running sometime in early 2021.

“Ocado’s mission is to arm up our international retailers with the best tech that they can have to compete as effectively as possible in their individual grocery markets,” Harvey says, “And so we don’t really like to talk about the capabilities that we’re going to be providing them to operate very effectively in their markets before we have the solution ready to go.”

What Harvey will reveal is that Ocado and Myrmex will work together on a product that will work toward solving “problems” of online retailing encountered by partner merchants that can be solved with better efficiency and automation—at the warehouse level.

“In the land of warehousing, capital efficiency and productivity are the key metrics that drive the business, and so for us, anything that helps us speed up our vision to be able to receive goods from a dock door and do all the processes in between—decant and dispatch without human touch,” he explains. “There are still a few business processes, which are not yet under automation, and the capability that we’ve seen in Myrmex—both in terms of the engineers and the skills that they have, and the products which they’ve already been able to bring to market like their click-and-collection solution—demonstrates all the capabilities in terms of smart asset handling systems, vision systems, robotics—dealing with all the challenges of the real world…We see this really great synergistic coupling between the engineering, scientific and innovative capabilities that Myrmex has demonstrated over the years with some of the, as-yet-un-automated business processes that we have in the warehouse, which will continue our journey to transform productivity and time efficiency.”

Myrmex, a Santa Clara, Calif.-based company with roots in Athens, Greece, touts solutions based on moving goods through a combination of robotics and proprietary racks and bins, with any number of applications in retail. A central theme between them is marshaling picked goods autonomously and efficiently, leading to development of a range of potential solutions that could automate retrieval of online orders but also, reinvent processes like store shelf replenishment by delivering a new take on time-worn practices like loading, pushing and unloading utility carts or “u-boats” used by store clerks. In a massive e-commerce grocery warehouse—or a smaller one intended to provide more immediate fulfillment, like Ocado’s nascent Zoom offering—this could offer solutions around replenishing the bins Ocado’s swarming army of of robots so efficiently position and pick from the grid.

But this is only speculation. Ocado a year ago invested in Karakuri, a machine that automates fresh meal assembly, also with eyes on its developing Zoom offering.

Partnerships in a Petri Dish

From the point of view of Mymex CEO George Katiniotis, the partnership with Ocado fulfills an ambition to align with a company it has long admired, while raising the profile of its own solutions it still intends to market to other retailers, including some in the U.S. with which the company is advanced discussions, he said.

“The first discussion we had when we founded Mymex was about Ocado. We admire Ocado, and we’re very proud that Ocado has selected us,” Katiniotis said. “It’s a testament to our automation and robotics capabilities. And now with the support of Ocado, we will accelerate commercialization of our product lines.”

To the extent further enhancing a system dedicated to taking labor and costs out of the cost- and labor-intensive business of online grocery, in a moment where demand for a such a service is nearly a necessity given the pandemic, is a message to retailers that “they need to get into the race,” Harvey believes.

“Clearly, as we’ve seen in the last nine months or so, with a global pandemic, the online grocery industry has massively scaled in terms of market share and volume, and anything we can develop that reduces human contact with the groceries that we pick and pack for our customers, and reduces the potential of workforce who may get [ill] … is the only way to effectively and efficiently scale and provide the service in a really assured manner.”

The combination also highlights the value of partnerships in accomplishing the complex and ambitious gains in technology that promise to continue an ongoing revolution of shopping and evolution of retail. Harvey—who says he got into grocery technology after a stint doing aerospace engineering—offered that he sees this particular area as playing a critical role in broader societal and scientific change as well.

“When I went to university, at no point did I think grocery logistics is the place to go and work,” he admits. “It’s an activity that most people don't think twice about—but the analogy we like use is that it’s like an iceberg. The tip is all you see on the surface, but underneath there is this phenomenal, massive activity. And for the economy, the amount of specialist knowledge and capability that goes into building this platform end to end—the machine learning, AI and data science, the logistics, the warehouse and the e-commerce site; the challenge to pick and pack the range that we offer (60,000 different items that go from very large and rigid all the way through to very small, damageable fruit-and-veg) and trying to pack it densely and in such a way that maintains the quality and the speed—will be important. And so actually, grocery logistics provides one of the most exciting sandpits, or Petri dishes, for the development of advanced robotic systems.”

“One of my mottoes is one plus one equals three,” Katiniotis adds. “Working with Ocado we can accomplish more together than either of us could alone.”

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