pany’s utility costs and shrink its carbon footprint.
That’s good for company budgets, the environment,
and the corporate image. The only problem is figuring out how to get it done.
With the ability to instantly analyze thousands of
moving pieces in a complex logistics operation, WMS
software can provide the answer. For example, the
software might be able to uncover opportunities to
save energy by cycling conveyor belts off during idle
times or using occupancy sensors to switch off lights
in empty rack aisles.
“You can use a WMS both to run a warehouse
most efficiently and to get maximum productivity,”
says Jason Mathers, senior manager for supply chain
logistics at the Environmental Defense Fund (EDF),
an advocacy group that partners with companies to
find ways to reduce their environmental impact. “The
goal is (to figure out) how to run a variable volume
through a distribution center,” Mathers says. “These
are very dynamic environments. You want to be able
to scale up how you use equipment to meet peak
demand, but you don’t want your system optimized
for peak flow when it’s the slow time of year.”
When it comes to energy-saving strategies, Mathers
speaks from experience. Through its Climate Corps
program, EDF matches business school students
with companies on 10-week fellowships to find
energy savings that benefit both the environment
and the bottom line. Companies that have enlisted
these specialists to identify savings opportunities
in their warehouses include Adidas AG, Coinstar,
Mondelez International Inc., Target Brands Inc., and
Recreational Equipment Inc. (REI).
The results can be jaw-dropping. For instance, in
2013, Office Depot Inc. brought a Climate Corps
intern into its retail and supply chain operations in
Boca Raton, Fla., and identified potential long-term
savings opportunities of $6 million in its building systems and operations alone, thanks to annual electric
savings of 32,000,000 k Wh and an annual reduction
in carbon dioxide emissions of 16,000 metric tons.
Not all companies will uncover savings of this mag-
nitude, of course, but that’s not to say they shouldn’t
give it a try. They might be surprised by how much
waste they can root out. “There are energy-efficiency
opportunities just waiting to be found,” says Mathers.
So how do you go about identifying those opportunities—and where does your WMS fit in? What
follows are four ways to leverage the power of software to cut both warehouse costs and your carbon
footprint:
1 Buy electricity at off-peak rates. A large warehouse can cut its electric bill by participating in a demand
response program with its local utility, Mathers says.
As any power company can tell you, the cost of
producing electricity varies widely across days or even
hours, such as when a producer has to fire up additional generators to meet peak demand or when low
rainfall causes a hydroelectric dam’s production to
drop. The price we pay for electricity, however, does
not fluctuate in most places (except in regions that
have deployed smart meter technology).
To compensate, some utilities will actually pay large
customers—such as warehouses—to shut down key
pieces of equipment during periods of peak demand.
A DC that can use its WMS to ramp down operations
at key times and reschedule them for nonpeak periods
can reap a big return.
“The cost of generating one more kilowatt of electricity at 4 p.m. on a hot day in Texas is quite significant,” Mathers says. “So this is one way for companies
to reduce their power bill and their carbon footprint.”
2 Rein in forklift costs. Seasonal and cyclical factors can have a big effect on warehouse energy costs.
Rising oil prices can boost the cost of operating trucks
and forklifts, and the extremes of winter cold or
summer heat can punch a hole in any heating or air
conditioning budget.
“The pressure to save money in warehouses goes up
with variables like fuel costs,” says Thomas Kozenski,
vice president of industry strategy for JDA Software
Group Inc. “Because people have budgets, if gas
prices suddenly go bananas, they’ve got a problem.
And they will do something—anything—to cut those
costs.”
One way to slash fuel costs is to use the WMS to
