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Improving vehicle routing with Ocado Group

17 November 2021

Line of vans from above in a car park

Academics from Cardiff University, embedded in a team alongside specialists from Ocado Technology, have pioneered research advancements in vehicle routing at Ocado Group as part of a KTP project.

Part funded by a Knowledge Transfer Partnership grant from Innovate UK and the Engineering and Physical Sciences Research Council (EPSRC), the project aimed to enhance the current vehicle routing optimisation system used by Ocado by applying complex algorithms and advanced optimisation techniques, building on Ocado Technology’s already sophisticated data science capabilities.

Vehicle Routing Problem (VRP) is the core of scientific research on the distribution and transportation of goods. Thanks to advancements in new algorithms handling the VRP, we can obtain improved routing solutions even for large-sized instances. This is especially important for Ocado since they and their retail partners operate in such a condensed transport network.

Dr Emrah Demir Reader in Management Science, The PARC Associate Professor of Manufacturing and Logistics, Deputy Head of Section (Learning & Teaching)

The project, which ran for 2 years, successfully modified Ocado’s simulation environment enabling it to simulate multiple depots at once. Dr Demir adds that there were also outputs greater than originally estimated. “The additional benefits were fewer delivery vans in use, lower fuel costs and emissions, which lead to an increase in profitability for the businesses. Additionally, this project will provide cost savings to Ocado’s international clients.”

Tim Bickley, Lead Data Scientist, agreed stating that, “the learnings from this KTP will help Ocado Technology make a significant step forward in the sophistication of our vehicle routing system, ultimately allowing our retail partners around the world to operate their online grocery operations more efficiently”.

He continued, “being able to collaborate with talented academics, as we have done with this KTP, has been a fantastic opportunity for us all. Together, we’re not only pushing the boundaries of what we know, we’re also applying the knowledge gained to develop real-world solutions that will transform the efficiency of online grocery delivery”.

The KTP, which has successfully enhanced Ocado’s core routing algorithm enabling it to run on larger problems, wasn’t without its challenges. The COVID-19 pandemic started relatively early on in the project. They quickly adapted to this, with collaboration between Ocado, the associate and the Cardiff academic team moving online.

The longstanding partnership between Ocado and Cardiff Business School has only been strengthened since the KTP project, according to Dr Vasco Sanchez Rodrigues, Ocado partnership lead with the School, “since we started contributing to Ocado back in 2016, we have demonstrated the value Cardiff University is capable of bringing to grocery retail operations and supply chains, and this project is no different”.

Ocado concur that the collaboration has given them “access to the expertise and insights of a fantastic academic team around how we can apply cutting-edge research to our use case. The academic team worked with the associate to direct the research, ensuring that we reached a solution that both worked for us and provided both great academic and real-world output.          .”

Mark Lynch, Knowledge Transfer Adviser, commented that cutting edge advanced technology projects such as this “showcase the benefits typically delivered by Innovate UK’s KTP programme. Matching progressive, ambitious businesses like Ocado Group, with the world class applied research expertise to be found at Cardiff Business School, helps solve the tough technical challenges best-in-class organisations face - resulting in significant commercial benefits. Central to project delivery, KTP Associate Dr Minh Vu Duc spearheaded progress, gaining structured technical and professional support and guidance. The project opens the door to continued future innovation, through collaborative research”.

Dr Minh Vu Duc, KTP Associate benefited from being under the joint supervision of the industry and academic teams and praised the partnership, “the close collaboration resulted in new solutions and approaches that can be translated into significant revenue gains each year as a result of better transportation plans, fewer vehicles, and more customers served.”

Future research will include exploring scaling up to arbitrarily large problems via a decomposition strategy and moving the OSP routing system to one which supports multiple delivery sites for a single optimiser, enabling them to deploy the algorithmic improvements developed during this KTP into production.

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