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Modeling Becomes Essential Part of Facility Planning and Upgrades Process

    Online News published in DMReview.com
January 27, 2006

Automation Associates, Inc. (AAI), a provider of simulation solutions for the global supply chain, announced that Fresh Direct, LLC has selected AAI's simulation modeling software and services to help build and improve operations efficiency within its 300,000 square foot facility in Long Island City, New York. Fresh Direct will utilize simulation modeling to analyze and update its order fulfillment system.

In the online grocery business, effective facility planning is critical in the storage and distribution of a wide variety of fresh and stocked foods. Efficiency levels in refrigeration and dry storage, food preparation, packing and delivery influence capital expense decisions and staffing plans, affecting bottom-line profitability. Fresh Direct originally employed AAI in 2000 to develop a detailed simulation model of order picking, processing, packing and shipping systems and equipment to validate its facility and operations model, enabling Fresh Direct to present a "proven" concept to potential investors and acquire initial funding prior to launching operations. Due to this earlier success with simulation, Fresh Direct has again partnered with AAI to update the facility model and evaluate and improve operations; the new model will test the validity of several proposals to upgrade equipment and processes, as well as increased throughput capability.

"It made sense for us to turn to a proven technique after experiencing first-hand the benefits of simulation when building a streamlined operations facility," explained Jason Ackerman, vice chairman and chief financial officer of Fresh Direct. "We have since made simulation an essential part of our planning process, and we're confident that AAI's expertise will help us get to our current goal of predictable expansion requirements."

AAI's current project enables Fresh Direct to determine ultimate capacity of its current facility and establish metrics that will signal need for a second location. With its simulation software, AAI will assist Fresh Direct with detailed performance analysis for the facility design, including all internal product movement, sortation, packing and shipping equipment and activities.
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