As the logistics industry undergoes unprecedented change, the Otto Group yesterday said it is entering into a long-term strategic partnership with Covariant to build a foundation for future growth. The Otto Group said it will use Covariant's artificial intelligence-powered robots to automate a wide range of manual fulfillment activities that require hand-eye coordination and object manipulation.
“Logistics faces the challenge of being as cost-efficient as possible,” said Kay Schiebur, member of the executive board for services at the Otto Group, in a press release. “The use of a generalist AI allows us to rethink processes that were not possible before and provides an answer to the massive shortage of workers.”
“In times when handling is often outsourced to cheaper locations, we are especially happy to continue to be close to our customers and strengthen the European, and especially German business location,” he added. “The use of AI will be a key success factor in logistics in the future,”
The Otto Group invests in the future
“In times of a challenging market environment, it is essential that future investments do not fall by the wayside,” Schiebur said. “We invest here and now in our future viability to strengthen our position as a market leader in Europe.”
Founded in 1949, Otto GmbH claimed that it is the largest online retailer of European origin, with about 43,000 employees in 30 corporate groups. The Hamburg, Germany-based business includes platforms, brand concepts, retailers, services, and financial services, and its primary presence is in Germany, Europe, and the U.S.
In the 2021 to February 2022 fiscal year, the Otto Group reported €16.1 billion ($17.6 billion U.S.) in revenue and had online sales of around €12.1 billion ($13.2 billion). The company said its partnership with Covariant will enhance services for its customers and enable it to take a step “towards a digitalized and AI-driven future.”
The Otto Group said it plans to deploy Covariant robots to increase operational efficiency, build resilience against workforce challenges, and improve the overall quality of work within its fulfillment centers. It said it expects the investment to create new work profiles and attractive jobs while improving productivity and ensuring more reliable delivery times, especially during periods of high or fluctuating demand.
Covariant Brain to power robot rollout
Covariant claimed that it “delivers the widest portfolio of robotic picking, placing, and sorting solutions available in today’s market.” Each of these systems runs on the Covariant Brain, a deep learning platform that the company said “enables robots to see, think, and act.”
Under the strategic partnership, the goal is to install hundreds of Covariant AI-powered robots across all of the Otto Group's fulfillment centers. The companies said they are starting with deploying robots at facilities in Haldensleben and Altenkunstadt, Germany, this year.
The Otto Group will use these robots to autonomously handle the dynamic and unexpected fulfilment scenarios that have previously limited picking automation. They included the challenge of successfully processing ever-changing products without having to pre-program data, said Covariant.
In addition, Covariant said all its robots – regardless of facility location – can learn together as a fleet to ensure that lessons and operational improvements automatically propagate across the entire Otto Group network.
“This is a huge step forward for the automation of Europe’s e-commerce market, as it represents one of the largest investments in a foundation model for robotics to date,” said Peter Chen, CEO of Covariant. “We're honoured that Kay and team recognize the importance of developing a universal AI for robot learning, and we look forward to delivering the operational improvements that will help maintain Otto Group’s market-leading position for years to come.”
About Covariant
Research scientists who developed modern deep learning techniques founded Covariant in 2017. Emeryville, Calif.-based embodied intelligence inc., doing business as Covariant, said it delivers AI-powered automation “to address the change and scale of today’s modern warehouse.”
With offices in North America and Europe, Covariant said it has customers in 15 countries. Nearly 300 robots are powered by the Covariant Brain, a universal platform that enables robots to interact with and learn from their dynamic environments, said the company.
Covariant offers robotic picking applications, including order sortation, item induction, goods-to person order picking, kitting, and depalletization. It said its robots can autonomously pick virtually any SKU or item on Day 1 in industries spanning apparel, health and beauty, pharmaceuticals, logistics, and general merchandise.
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