into the green

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 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 ninemonth 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.

Making a distribution operation more eco-friendly doesn't necessarily require investing millions of dollars in solar panels or new material handling equipment. For specialty food maker Stonewall Kitchen, it was a simple matter of changing the way it disposed of discarded packing material from inbound shipments. Rather than sending it to a landfill, the company launched a program to separate out materials suitable for recycling and then selling them. That single step netted the company $50,000 in 2008.

Based in York, Maine, Stonewall Kitchen makes specialty and gourmet foods, including jams, jellies, and baking mixes. The privately held company, which recorded sales of more than $50 million last year, manufactures its products at a plant in York. After manufacture, it stores the products at the plant for about 48 hours to conduct quality testing before moving them to a 120,000-square-foot distribution center in Rochester, N.H., about 20 miles west of York.

Although the company had done some recycling in the past, it didn't launch a fullblown initiative until 2007. Supervisor Charlie Baker, who spearheaded the effort, says that a waste audit by the company's regional trash hauler prompted him to get serious about recycling. "It felt like we were doing the wrong thing throwing it in the Dumpster," says Baker.

The company started its recycling program in 2007 with cardboard, and then added aluminum and plastic in 2008. In 2007, the gourmet food maker recycled 165 of its 295 tons of waste—or 56 percent.

For Stonewall, the program has proved profitable on several fronts. To begin with, it is able to sell the discarded materials to its regional trash hauler, which also picks up the recyclables and hauls them away. Until this past October, when the market for recycled commodities tanked, the company was earning $125 a ton for recycled cardboard, says Baker. In the last quarter of 2008, the price for a ton of cardboard plunged to $15. Still, the recycling program netted the company $7,000 in 2007 and $30,000 in 2008.

Not only does Stonewall Kitchen receive cash for its recyclable material, but it also avoids waste hauling charges and the $90-a-ton tipping fees it would otherwise pay to dump the material in a landfill. In 2008, the company would have incurred about $14,000 in tipping fees along with another $5,600 for hauling that trash away. Taken together, the payments and savings netted the company $50,000 this past year.

Baker notes that while the environmental stewardship aspects of the program appeal to the company's managers, it's the cost savings that have really grabbed their attention. When he presented the recycling program's results to top management in October, the company decided to form a special "green team" of employees to find other environmental initiatives. "We're looking at changing lighting systems and other ways to save money," says Baker.