October 28, 2004, 12:00 AM

Battling Congestion

(Page 3 of 3)

Furbush likens FreshDirect to Starbucks` early "take it slow and get it right " approach and says his company has plenty of time to target other markets. To assist with business development and help the company refine its technology and supply chain operations, FreshDirect in September hired Steve Michaelson, former senior vice president with Weis Markets Inc. and Wegmans Food Markets Inc., as president.

"We will eventually grow in other dimensions, but we`re very systematic and for now we are concentrating on gaining new customers in our current zone." Furbush says. "In terms of both challenges and rewards, there is no food market like New York. For us it`s the best place to be right now."

Mark Brohan is principal of Milwaukee-based The Brohan Group, providing professional editorial and publishing services.

The technology demands of staying fresh and fast

How to use technology to better manage supply chain and fulfillment operations is constant food for thought at FreshDirect. "We are always looking at new ways to do things to drive down costs and expedite order processing," says FreshDirect president Steve Michaelson. "It`s just a part of how we do business."

At FreshDirect`s 300,000-square-foot distribution center in Long Island City, NY, where the company operates 12 different temperature settings from sub-zero to 38 degrees to keep food fresh, the company recently installed specially built printers from Zebra Technologies Corp. made to handle an extra-tough workload.

Other printers couldn`t stand the temperature extremes and slowed FreshDirect`s high-speed order processing system, which fills as many as 1,000 orders per hour. The new Zebra printers, however, are linked to FreshDirect`s enterprise resource planning system and programmed to print ready-to-stick labels with the individual product name and description, regulatory information and its own barcode, which expedites order processing. "The constant temperature and the ranges we use in specific departments are a key component of our supply chain, and how we deliver on our promise of delivering fresh food at great prices," Michaelson says.

In many respects FreshDirect likens its supply chain and fulfillment technology to the same model that made Dell into a web-retailing powerhouse: using e-commerce and integrated systems to build and deliver highly personalized orders.

All of FreshDirect`s front-end Internet order systems are integrated into its SAP ERP and order management platform. The automation of information is also minutely orchestrated with a batch manufacturing system and employee work stations so that orders can be taken as late into a current work day as possible and still shipped in time for next-day delivery.

"FreshDirect uses technology not to create a convenient delivery model, but to change the competitive dynamics in the food retail business," says company co-founder and chairman Jason Ackerman.

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