For a variety of reasons—rising fuel costs, concerns about global warming, a national goal of energy independence, emerging regulations—energy conservation initiatives are getting plenty of attention in the logistics and distribution world. And the focus isn't just on trucks, planes, and trains; warehouses and distribution centers are coming under scrutiny as well. The reasons aren't hard to understand. A rambling, poorly insulated structure with high ceilings and an inefficient lighting system is likely to leak energy like a sieve. And if its occupants leave dock doors open or unused conveyors and equipment running, so much the worse.
Stanching the losses doesn't have to mean razing the facility and building a new, energy-efficient one in its place, however. Many times, DCs can cut their energy bills simply by adjusting their operations to use energy more efficiently and investing in some well-chosen retrofits.
As for what kind of retrofits, the biggest opportunities for distribution facilities will likely be in motors, heating and cooling, and lighting, says David Voynow, a marketing manager for logistics, cranes and hoists, and material handling for Schneider Electric, an international energy management specialist. Cutting power consumption in these areas could be as simple as adding insulation or as complex as installing sophisticated energy management systems or "cool roofs." Granted, all of these options carry some upfront costs. But an investment in energy-saving equipment or technology is likely to pay for itself many times over in the years to come.
LEED by example
So where to begin? One good place is the U.S. Green Building Council (USGBC), a non-profit organization that promotes sustainable building practices. Although best known for its LEED (Leadership in Energy and Environmental Design) certification program for new building design and construction, the council offers a parallel certification for existing buildings. Called "LEED for Existing Buildings: Operations and Maintenance Certification," the program, which was revised earlier this year, recognizes businesses for physical or operational improvements that conserve "energy, water, and natural resources; improve the indoor environment; and uncover operating inefficiencies."
Although the time, cost, and effort required may deter companies from pursuing LEED certification, facility managers can still use the program's rating system and checklists as reference guides. For example, USGBC offers on its Web site an operations and maintenance projects checklist that covers everything from water efficiency to energy and atmosphere to indoor environmental quality to innovations in operations. (USGBC also offers workshops, online courses, and webinars on LEED.)
It's important to note that LEED for Existing Buildings is a broad-based certification program that's perhaps tailored more to office buildings than industrial sites. "LEED is just not built around DCs," warns Dean Monnin, a senior project manager in the Columbus, Ohio, office of international real estate developer Jones Lang LaSalle. But that can work to a DC's advantage, he adds. For example, a DC might have an easier time achieving a base certification than an office building might because large portions of the facility aren't air conditioned and water usage may be relatively low for a building its size.
Un-Limited savings potential
While water conservation, solid waste management, and indoor air quality initiatives all offer solid savings potential, efforts to reduce energy consumption typically offer the fastest return.
Consider the case of Limited Brands Inc. The parent company of Victoria's Secret, Bath & Body Works, and four other retail chains, Limited Brands says it expects to save $775,000 a year by installing energy-efficient lighting in its five distribution centers in Columbus, Ohio. That represents a 50-percent reduction in the DCs' lighting energy consumption, according to GE Consumer & Industrial, the supplier of the retrofit lighting system.
The installation included new T5 and T8 lamps and T8 ballasts that offer significantly longer life than the older lamps—they are rated for 24,000 hours—plus motion sensors in low-traffic areas that turn lights on only when there is activity in an area. The new lighting offers the added advantage of increasing light levels in many parts of the DCs, which combined, occupy 3.5 million square feet.
The savings include a $650,000 reduction in lighting costs over one year and another $125,000 in reduced maintenance costs due to the new lamps' longer life.
Although not every lighting replacement project will bring these kinds of returns, even relatively new facilities can benefit from swapping out their lighting fixtures, according to Mary Beth Gotti, manager of GE Consumer & Industrial's Lighting and Electrical Institute. Lighting technology has improved markedly in the past few years, she says. "If your system is more than five years old, I know you can do better."
Gotti notes that high-bay lighting of the type used in DCs has been one of the hottest topics at the Cleveland-based institute, which offers workshops, demonstrations, and conferences on lighting technology.
Cool!
Smaller projects can also offer significant savings. Honda of South Carolina Manufacturing, a maker of all-terrain vehicles and personal watercraft, was able to slash cooling costs by buying ceiling fans. The manufacturer installed 19 Big Ass Fans ceiling units, which operate on small 1- or 2-horsepower motors, in its Timmonsville, S.C., production facilities. The improved air circulation has allowed the company to sharply reduce the use of air conditioners with 40-horsepower motors. The result was an energy savings of about $1,500 a month and an 18-month return on the investment, according to Big Ass Fans.
Jeff O'Neil, a maintenance engineer and supervisor at the Honda factory, reports that the improvements have been particularly noticeable in the watercraft plant, which features a more open layout than the ATV facility. Once the fans began operating, he switched the air conditioners over to automatic mode so they would run only when needed. As it turned out, not all of the air conditioners were needed, O'Neil says. "We had two units that never really turned on all summer."
Jeff McCathern, assistant manager of the facilities department at the plants, reports that because of the fans' cooling effects, the company was also able to increase the temperature in the plants by two degrees, further reducing its reliance on air conditioning. "[The fans] help in the winter as well," he adds. "They move heat [generated by] the lighting down to the floor."
Start with the basics
Although there are many avenues to increasing an operation's energy efficiency, Voynow recommends that DC managers begin with the relatively easy fixes. "Our philosophy is to first fix the basics," he says. That means addressing issues like lighting and building insulation.
From there, he suggests addressing a more complex issue: correcting the DC's "power factor," which is essentially the percentage of the total power coming into a building that's actually put to work (the higher the power factor, the better). Power factor correction, which involves the use of specialized capacitors at appropriate points in the DC, can provide "almost instantaneous payback," he says.
But whatever type of energy-conservation measures a DC chooses, Voynow says, the key to success is follow-up—constant monitoring, maintenance, and refinement. That includes employee training and awareness—emphasizing no-brainer items like turning off lights and closing bay doors. "If you don't have an ongoing program, you will be right back where you started," he warns. "The thought process has to be part of the management suite, part of a holistic approach, not a one-time program."
