Speeding up the Supply Chain

Ocado has taken the on-line supermarket shopping concept to its logical conclusion. There are no stores involved; customers do their shopping on the Internet website simply by highlighting and selecting an item through their home computer. On completion shoppers pay at the virtual check out and then select a convenient delivery slot. Working in partnership with Waitrose, Ocado offer a full range of groceries, frozen, chilled, fresh or ambient; all of which is supplied directly from the company's national distribution centre in Hatfield.

For fresh produce, the big advantage is that this cuts at least 24 hours on average out of the normal supply chain, from the growers to the end user customers. As well as streamlining the process, the cost overheads have been reduced significantly, allowing better value for money. Conventional stores have been replaced by a fleet of purpose built home delivery vans, operating from a national network of delivery depots.

Based on the popular Mercedes-Benz Sprinter, the home delivery vans are configured to carry a refrigerated 'pod' which is pre-loaded with customer orders by the warehouse. Drivers simply load the pod together with its delivery schedule and route which is planned with the help of an on-board navigation system.

It's a successful model, as underlined by the extraordinary growth of the business since it was founded in 2000. As the business has expanded, relay depots have been set up, in Weybridge, Aylesford, Rugby and Manchester. Specially adapted trailers and 'Axor' tractor units are used to transport six loaded 'pods' to the depots and bring back the empties. With the emphasis on transportation, it is not surprising that the company operates a rigorous fuel management strategy.

The company has installed fuel storage facilities at its Hatfield base enabling it to take full advantage of bulk fuel prices. For road diesel, the facility is equipped with a Merridale Auditor FS dispenser and integral monitoring system supplied by MIS Fuel Monitoring Ltd of Wolverhampton. The Auditor records all fuelling transactions and transmits details to the fleet administration department which uses Merridale FuelFX software for analysis and management reports.

A separate pump, a Merridale FJ unit is used to dispense red diesel, which is used by the power generators fitted to the 'Pod' transporters. Better suited for auxiliary equipment applications, the Merridale Auditor FJ is a standalone unit which incorporates an internal printer for local reports.

Ocado's entire fleet of Axor tractor units, operate out of the Hatfield headquarters, together with a percentage of the delivery vans. Every vehicle is allocated a smart key, which enables drivers to access the fuel pump. The system maintains a complete record of all fuelling transactions together with current stock status. The data is downloaded to the office software which then provides weekly reports, detailing vehicle mileages and mpg economy performance.

"By measuring mpg figures we are able to build a profile of vehicle performance and from this we can soon detect any anomalies," explains Transport Manager, David Benzie.

"The Merridale software is very user friendly and versatile. Information from the system feeds up to finance and higher level key performance measurements. We can calculate how many miles have been done in a year, per vehicle or overall."