Our partners Auditel delve into the world of automation
In February 2019, Ocado’s automated warehouse in Andover, Hampshire, where robots picked grocery orders, burned to the ground over three consecutive days.
As more than 300 firefighters tackled the blaze, there was disruption to the 30,000 weekly orders picked at the warehouse resulting in a 14% drop in Ocado’s share price.
This is likely to be bad news for UK PLC because this warehouse and its robotics automation were an example of the UK leading the world in physical robotics technologies with Ocado selling its automation successfully abroad. Whilst the effect of this catastrophic fire on future sales has yet to materialise, it is no doubt reflected in the huge drop in Ocado’s share price.
The UK has traditionally been very poor at investing and adopting physical robotics. Japan has 213 robots, Germany 170, Sweden 154 and the UK just 33 robots per 10,000 manufacturing employees. Robotics is used in the UK in a wider number of sectors than the countries mentioned but is predominantly still used in one single manufacturing sector, automotive.
The lack of investment in robots in the UK manufacturing industry is likely to be a key cause of lower productivity than elsewhere in Europe. China is currently using robotics investment to drive productivity improvements, with a target to double productivity during the period 2016-2020. But, despite UK government attempts to boost industrial investment in robotics (in 2018 Theresa May pledged £2bn in funding for robotics and biotech), progress in UK adoption is slow.
Retail, unlike manufacturing, has been embracing new technologies and investing. The adoption and invention of warehousing automation by Ocado was in line with the high adoption rates of software robotics technologies by the retail sector in the UK. The invention of software robotics by UK companies such as BluePrism (a leading Robotic Process Automation vendor which originated in the UK) and its use behind the scenes in back office operations by UK retailers, has remained largely an untold and unreported success story.
There are several software robotics technologies being implemented successfully by companies in the service sector in the UK today even though they usually do not qualify for government or grant funding. Most notably Robotic Process Automation software, which is bought off the shelf and then programmed for each business use. The benefits of Robotic Process Automation are to remove re-keying and back office processing of routine and repetitive tasks. This is currently in use in UK law firms; energy companies; retailers; financial services companies and in the recruitment industry.
In addition, ‘Chat Bots’ are software robots built for businesses to communicate with customers and answer commonly asked questions, usually via text. For example, Lidl’s robot sommelier, built in Facebook, tells customers which wine to pair with food. These technologies operate processes at lower cost than human beings and when designed correctly enhance customer experience, build brand equity and are preferred by customers.
In conclusion, the UK is behind in investing in industrial robotics but is probably ahead of many parts of the world in its adoption and development of software robotics. To turn UK PLC into a part of the world which embraces all robotics technologies and is a world leader on productivity will require investment, use of the funding pledged by UK Government and businesses making a positive step to embrace new technologies. Post Brexit, hopefully UK organisations will pick up investment (investment fell two years ago when Brexit was voted through and has not picked up since). Learning what technologies are out there and awareness of their potential is an important first step.
Founded in 1994, Auditel was established to help organisations make effective and informed procurement decisions within a rapidly evolving market. Since then, we’ve built a strong network of over 100 procurement specialists and are continually innovating our service - becoming a leading procurement and supply chain management consultancy.