Harvest Green Savings
When retailers think of operations they can turn green, improved efficiencies in air conditioning, lighting and fuel consumption immediately come to mind. Among the less obvious opportunities for eco-friendly processes are fleet management and reverse logistics.
Rising oil prices have turned attention to route-optimization of private fleets and a commitment to ship more products with fewer miles. The environmental benefits of transportation efficiencies have been largely viewed as secondary rather than primary objectives. However, the reduction of greenhouse-gas emissions and improving the efficiency of ground-freight transportation is a critical concern for the U. S. Environmental Protection Agency’s (EPA) SmartWay Transport Partnership. A focal point of the SmartWay program is a reduction of unnecessary idling by truck and locomotive carriers.
Last month, Milwaukee, Wis.-based RedPrairie, which has announced a green initiative to provide solutions that support more environmentally sustainable supply chains, became the first supply chain technology provider to be accepted as an affiliate member of the EPA’s SmartWay program.
RedPrairie’s fleet-visibility solution provides real-time tracking of asset utilization and efficiencies, including a dashboard tool that records idling time and C02 emissions.
“Our fleet-visibility customers are typically able to reduce idling by 30%,” noted Jim Hoefflin, executive VP and chief marketing officer of RedPrairie, adding that a number of state and local governments enforce laws restricting the amount of time a carrier’s main engine can be left idling.
In cities such as Denver and Aspen, Colo., idling for more than 10 minutes or five minutes (respectively) within a given hour can result in up to a $1,000 fine or one-year imprisonment. In Sacramento, Calif., fines can go up to $25,000 per violation of that city’s five-minute idle rule. (For a comprehensive listing of truck-idling regulations, refer to the American Transportation Research Institute at www.atri-online.org.)
Zero net waste: While idling engines can be blatantly noxious, empty trailers are also wasteful and present another opportunity for route optimization. Trucks returning after making deliveries to stores and distribution centers should be utilized to haul returns as well as waste materials that could be recycled.
Curtis Greve, executive VP of Pittsburgh-based Genco, told Chain Store Age the goal of retailers should be to have “zero net waste leaving stores.”
“The philosophy used to be that it made more sense to throw away a low-margin item than to process it as a return—now, with the focus on sustainability, the cost of that decision is higher,” Greve suggested.
In addition to returned products, the returns centers (RCs) that Genco manages for Sears recycle plastic wrap, garment wrap and used car batteries received from the stores. “The incremental cost of sending those items back through the supply chain is nothing compared to what it would cost to throw them away or dispose of them at each store,” explained Greve.
At the 300,000-sq.-ft. RC in Columbus, Ohio, that Genco manages for Dell, all of the product is re-manufactured or recycled. The RC processes 40,000 to 45,000 product units a day including materials such as plastic, cardboard and foam. None of the returned product goes into a landfill.
“Our partners in the U.K. are recycling refrigerators and freezers,” said Greve. “The RCs drain all the gases and liquids and then the appliances go into a big ‘cyclone’ machine that beats them into quarter-size pieces of metal, which through a series of magnifications and air blowers are sorted by metal type into little pellets and sold on the metals open market.”
Within a couple of years, he expects Genco’s domestic RCs to offer similar recycling services for appliances, which could translate into a valuable competitive advantage for retailers.
Winn-Dixie team honored for turnaround
JACKSONVILLE, Fla. The team that lead Winn-Dixie Stores’ successful turnaround initiative is being honored by the Turnaround Management Association for the best ‘Mega Company Turnaround’ for 2007. Comprised of financial experts from The Blackstone Group, Skadden, Arps, Slate, Meagher & Flom and Smith Hulsey & Busey, the team helped Winn-Dixie regain the market share and profits it started to lose in the mid 1990s and early 2000s to competitors Publix and Wal-Mart.
Winn-Dixie filed for Chapter 11 bankruptcy in early 2005 after reporting year-to-date losses of $552.8 million or $3.93 per share of common stock and a decline of 4.9% in identical-store sales in its second fiscal quarter over the same period in 2004.
Despite the difficulty of achieving a succesful turnaround, Winn-Dixie began its reorganization effort, while still continuing to operate its core business and preserving jobs. According to the Turnaround Management Association, it created new common stock for five classes of unsecured creditors, with recoveries ranging from about 96% to 53%. The company emerged from bankruptcy on Nov. 21, 2006.
For its fiscal year ended June 27, Winn-Dixie reported adjusted EBITDA of $85.9 million compared to a loss of $27.8 million last year and an identical-store sales increase of 1.6%
Sears ends deal with maternity retailer
PHILADELPHIA Sears and Mothers Work, the world’s leading maternity apparel retailer, will not be renewing their agreement, Mothers Work announced today. Under their current agreement, Mothers Works operates the maternity apparel department in 502 Sears stores through the sale of its Two Hearts Maternity branded merchandise.
Mothers Work said it expects its partnership with Sears to end on June 20, 2008, when it current deal with the company is expected to expire.
Rebecca Matthias, president and ceo of Mothers Work, noted, “While we are disappointed about the end of our relationship with Sears, we feel the decision not to proceed with a renewal is in the best interest of our stockholders since we were unable to reach terms on a renewal which would be favorable for Mothers Work and our stockholders. “