Day Model Example

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

Warehouse footprint without ASRS

Day demand on average was:

  • 642 customer orders to be fulfilled
  • total of 3,852 order lines and 4,622 items
Input data for operating day

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
Day of operations with manual labor

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.

Warehouse footprint with ASRS

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
Day of operations with associates powered by automation

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.

get Instock. #