# Day Model Example

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# Baseline

This is an example model built for the business of sub-hour direct-to-consumer grocery delivery.

It assumes that prior to automation:

- customer orders were fulfilled manually
- a single order picking process was used; from standard shelves installed in a dark store
- 3,000 ft2 (279 m2) room was holding enough inventory of 2,000 ambient SKU assortment
- room of 14 ft (4.3 m) clear height to ceiling

**Day demand on average was:**

- 642 customer orders to be fulfilled
- total of 3,852 order lines and 4,622 items

**Daily operations required:**

- three shifts with a peak of outbound orders during the second shift
- at peak, 8 associates were fulfilling customer orders to reach the required picking throughput of 720 order lines per hour (LPH)
- maximum picking productivity of a picker was 100 LPH
- a day required 97 labor hours, at $22 total all-in cost of an associate’s labor hour
- a day all-in labor expenses were $2,141

# Instock ASRS

**Instock ASRS solution:**

- utilizes 1,800 ft2 (167 m2) of floor space in the same room, leaving the remaining 1,200 ft2 (111 m2) for packing, staging, receiving and other support processes
- provides 2,300 plastic bins of storage capacity
- allows expansion of assortment to 3,000 SKUs keeping the same days-on-hands of inventory.

**With associates powered by automation:**

- total daily cost of automation of $437 is defined by the cost of throughput capacity
- throughput capacity is defined by peak hours (robots are underutilized in non-peak hours)
- gain in picker’s productivity is 6x, and covering peak hours requires only two associates
- shifts are adjusted: one shift of two associates and two shifts of a single associate

# Efficiency gains

Compared to the baseline, daily efficiency from Instock as-as-service solution is **$1,073 (or 50% of baseline labor costs)** plus an increased assortment **from 2,000 to 3,000 SKUs**.

|   | Baseline | InstockASRS |
|---|----------|--------------|
| Max throughput per single operator | 100 LPH  | 600 LPH      |
| Labor                         | 97 h     | 29 h        |
| Labor cost                    | $2,141  | $631       |
| Cost of automation             | $0      | $437       |
| SKU portfolio                 | 2,000   | 3,000      |

Besides obvious economic advantages, the automation use case brings improved picking accuracy, associates satisfaction, inventory transparency, and green energy efficiency.