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The set up of our shortened supply chain is one of the key things that makes Ocado unique. This supply chain is a vast network of systems and suppliers from all around the world, involved in transforming customer orders into deliveries. Clearly, this is no easy task - there’s a huge deal of complexity involved. Ocado.com alone has tens of thousands of products coming from hundreds and hundreds of suppliers from all around the world. All of these moving parts need to work together seamlessly to make sure that deliveries are on time, in the right place, in the right quantities, to make sure that customers are getting their fresh produce exactly when and how they want it.

The shortened Ocado supply chain vs conventional supply chains

Visualising the whole process from start to finish in someone’s head is impossible! But having an end-to-end view of the entire chain is essential - it’s really important to us not to order too much and create waste, or too little and have stock shortages.

So, how do we do this?

Well tested, integrated systems to deliver an efficient supply chain already exist and are doing a great job, as you may have appreciated from the many Ocado branded vans running around the country. However, new challenges are offered by our international grocery retail partners requiring more flexible solutions that adapt to the differences in retailers’ business models, laws and retail markets across the globe. Even the local markets continuously change, and our supply chain solutions need to evolve with them - such as you would see, for example, with the appetite for smaller, faster shops with services like Ocado Zoom.

We create detailed computer simulations of our complex supply chain operations to visualise all these variables.

Just one example of a type of visualisation of our Supply Chain network

Different agreements with suppliers, new storage solutions, ordering different quantities, changing the range of products are all plausible adjustments, but how can we make sure they will achieve the desired effect of optimal demand to supply ratio?

Food photo created by valeria_aksakova - www.freepik.com

We want to make sure we’re ordering exactly what we need from our suppliers, no more and no less

Certainly, the experience and capabilities of the brilliant minds working here do help, but computer simulations are a fundamental tool which we use to help us make the best decisions possible.

The business strategy of building a simulation before, during and after the elaboration of a new concept is a long and consolidated idea in Ocado Technology that, for example, contributed to the development of new generation warehouses.

A simulation serves as a safe environment for prototyping, validating and experimenting with ideas. Code that is tested successfully in simulation is moved to production where it continues to be tested and optimised using the simulation.

So, what do we simulate exactly?

As with physical markets, it all starts with customer demand.
What things are people going to want to buy?
We want to be able to configure what are our expectations:

How many orders will we receive?
How many items will each order contain?
How many are short life items?

Are customers having a party or on a health-kick?

Next, we simulate our forecasts

We then examine the demand and convert it into orders.

Finally, we simulate the warehouse preparing those orders to send them to our happy customers.

The simulation outputs a number of statistics such as how many things have been sold, and how much stock do we store in the warehouse

The results are then used to make informed decisions!

In summary, supply chain simulation:

Predicts the performance of key metrics for hypothetical scenarios: how many extra containers full of stock would we need to store if we increased our range by 5%?
Gives visibility on data that otherwise would be concealed to our eye
Facilitates testing of ideas without needing to implement a whole system
Saves work by determining what solutions should be advanced and by reusing simulation code in final production systems.

This is all enabled by:

Advanced mathematical models.
Clean reusable code.
Continuous validation cycles.
Integration with existing systems (whenever appropriate and in scope).

If this piques your interest, do take a look at some open Simulation positions we have in our new London office for Java engineers, or the Simulation positions we have in Hatfield, or more widely at the myriad of opportunities we have available: https://www.ocadogroup.com/careers

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