Creating competitive tech capabilities
Smart robot coordination with physical AI
Creating competitive tech capabilities
Smart robot coordination
with physical AI
What if a warehouse could think for itself – recognizing bottlenecks before they occur and redirecting robots before congestion emerges? The Otto Group aims to make this possible with physical AI and the 'Robotic Coordination Layer', a proprietary development with smart connectivity that for the first time controls all of the Group's robot fleets in real time. One of the most ambitious automation projects in European retail is gaining momentum.
Logistics is under pressure: Market volatility, increasing complexity and uncertainties in global supply chains – combined with rising customer demands. Conventional automation is unable to cope with these factors. The Otto Group's response is physical AI – artificial intelligence that not only processes data, but also acts, learns and makes decisions in the physical world. This is precisely what makes it the key technology for the future of logistics.
The underlying technological platform is the 'Robotic Coordination Layer': an in-house developed AI-powered control system that creates smart connectivity and for the first time coordinates all of the Group's robot fleets in real time. It enables forward-looking decisions and will make the Group's logistics centers controllable as a unit.
A cross-functional technology ecosystem
To implement the system, the Otto Group is bringing together competencies that are unique in this combination in Europe: Nvidia, the world's leading accelerated computing company, provides the AI infrastructure and simulation environments. Reply, IT specialist and global Nvidia service partner, developed the digital twin, an exact virtual representation of the logistics hubs.
The Otto Group's Supply Chain Management is in charge of the strategic perspective for this supply chain innovation. Hermes Fulfilment, the warehouse and returns logistics provider, adds operational expertise. Otto Group One.O, the Group's own consulting and tech partner, is developing the software layer of the Robotic Coordination Layer and is responsible for its governance. The intellectual property remains entirely with the Otto Group.
We are using state-of-the-art technology to create a new, centralized logistics infrastructure. This will strengthen the future viability of the Otto Group.
“The future of logistics will not hinge on who chooses the most modern technology. Instead, the decisive factor will be who ensures the greatest vertical integration within their business model and uses this to harness a genuine competitive edge. And this is exactly what we are doing: we are combining the most powerful technologies with decades of retail and logistics expertise to develop a solution that is entirely ours. This is not an efficiency project. This is key infrastructure for the future viability of the Otto Group,” says Kay Schiebur, Member of the Executive Board Services at the Otto Group.
Pilot location Löhne:
simulations with the digital twin deliver initial results
The pilot site in Löhne, North Rhine-Westphalia, Germany, is up first. A complete digital map of the Hermes Fulfilment's large-parts logistics center – with its ten halls and 100,000 square meters in total – was produced in under a week. The goal: a digital twin in the Nvidia Omniverse that maps the movements of all robots in real time and enables simulations.
This will permit virtual optimization of the layouts before changes are made in the real warehouse. Bottlenecks become visible before they occur. Various scenarios – for the Christmas business and other situations – are calculated in advance to optimize the deployment of employees and robots.
The vision:
a sentient warehouse
The long-term vision is to establish self-controlling, thinking logistics centers under human supervision. Artificial intelligence takes over the data-based coordination of material flows under the supervision of employees. Robots will relieve people of physically strenuous or repetitive tasks so that they can take on more demanding roles.
Technologically, this will be made possible by the ‘Intra Logistic Artificial Brain’ (iLAB), an AI layer that is based in turn on the Robotic Coordination Layer.
“The iLAB is the brain behind the vision: an AI layer that anticipates as well as coordinates; that continuously optimizes processes instead of just managing them. What we are enabling here represents a quantum leap in intralogistics: a sentient warehouse that places people at the center,“ says Dr. Stefan Borsutzky, Co-CEO of Otto Group One.O.
The project is part of the medium-term investment of €350 million in IT, technology and artificial intelligence announced for 2025. A clear signal: physical AI is no longer a vision of the future for the Otto Group, but a strategic priority – and the start of a new industry standard in European retail.
