DC Velocity - February 2009

greenlogistics GREEN BEST PRACTICES

As for programs aimed at making the overall supply chain more eco-friendly, the survey respondents were more apt to be exploring ways to modify their existing systems or facilities than engaging in drastic network overhauls. When questioned about their efforts to green up their supply chains, 22 percent of the survey respondents whose companies had green initiatives under way said they were retrofitting DCs to make them more energy efficient. That was followed by redesigning the network ( 17 percent) and near-sourcing ( 11 percent). At the bottom of the list were relocating warehouses and plants ( 7 percent), opening new warehouses ( 6 percent), and opening new plants ( 1 percent).

Good citizens

What’s motivating companies to undertake these initiatives? Of those respondents whose employers had green programs in place, the majority— 43 percent—said it was because their company wanted to be a good corporate citizen. Another third— 35 percent—said the motivation was to save money, while 9 percent indicated that they wanted to save the planet. A mere 4 percent said they had embarked on green initiatives in order to comply with existing or upcoming government regulations.

But as a practical matter, it’s likely that many of the

the right lights

For a shining example of how DCs can cut their energy bills, you need look no farther than Fellowes Inc. Last year, the office products maker replaced the lighting fixtures at two distribution centers with energy-efficient fluorescent lights—a project that paid for itself in a matter of months. “There’s a strong ROI in replacing light fixtures,” says Michael Kozak, an industrial engineer at Fellowes. “Our DCs run 24 hours a day, five days a week, so we’ve reduced our energy consumption by a significant amount.”

Perhaps best known for its Bankers Box storage boxes, the Itasca, Ill.-based Fellowes makes and distributes office products like storage systems, computer accessories, and paper shredders. Much of its merchandise is manufactured overseas in countries like China and shipped to its three U.S. distribution centers—located in Itasca, Hanover Park, Ill., and Las Vegas—for distribution to customers throughout the United States.

At the suggestion of one of its suppliers, Fellowes began considering swapping out its old fixtures for fluorescent lighting a year ago. This past summer, the effort came to fruition when the company replaced the 400-watt metal halide fixtures in its Las Vegas and Hanover Park DCs with six T8 fluorescent lamps.

Kozak says that the T8 lamps put out more light per unit of energy than the metal halide fixtures did. In addition, the fluorescent lights increase the light levels inside the DCs

the greening of America’s DCs

Among companies looking to green up their logistics operations, the DC is a popular place to start. At the top of the list: reducing the amount of waste sent to landfills.

Landfill waste reduction The use of recyclable material and packaging Retrofitting the building for energy efficiency Reduction in packaging material The use of recyclable containers or pallets New energy-efficient equipment Daylighting Water conservation The use of alternative/renewable energy Fuel-cell powered lift trucks

Note: Survey takers were allowed to select multiple responses

55% 52% 47% 40% 40% 38% 34% 24% 17% 13%

respondent companies actually had multiple motives for going green. One of the respondents may well have been speaking for many when he or she wrote that his/her company had undertaken a sustainability project “to achieve both business and environmental goals.”

while giving off significantly less heat than their incandescent or metal halide counterparts. “In the summer when it gets hot,” says Kozak, “we don’t have this contributing to the heat in the facility, which is important in a place like Las Vegas.”

The conversion to fluorescents brought about an immediate reduction in the facilities’ energy bills, but the savings didn’t end there. Kozak reports that the company has also received rebates from its power companies in Illinois and Nevada based on reductions in its energy usage. “It helps the power company because it does not have to build another power plant,” he explains. “For us, it was a significant amount of money.” He adds that Fellowes has also benefited from provisions of the federal tax code that allow businesses to depreciate the cost of energy-saving improvements in one year rather than over a multi-year period.

For Fellowes, the result has been a speedy return on its investment, says Kozak. “The total project had a nine-month payback, including the savings from energy consumption and rebates from energy providers plus some tax benefits from the federal government.”

In fact, Kozak reports that the company is so pleased with the results that it plans to retrofit its main DC in Itasca with fluorescent lights this year. He adds that the company is hoping the project will provide not just cost savings but also a boost in morale. “Employees [in the retrofitted DCs] say it’s a much more pleasant place to work,” Kozak explains.