Programmed for Savings
Specialty bedding retailer Mattress Firm has reduced its utility costs by more than $1 million by using an automated energy management system to control its HVAC and lighting.
The Houston-based chain first installed the technology, Lightstat Energy Management System (from Lightstat, Pleasant Valley, Conn.) in 2009, in a 51-store pilot in three markets: Houston, San Antonio and Cincinnati. The system, fully programmable from a centralized Web server, allows corporate facilities to control multiple locations across a large geographic region. Such control can help retailers better manage rising utility costs.
“When lighting and HVAC are controlled locally at the facility level, we have no control to affect those (utility) costs,” explained Sammy Butera national manager construction & facilities, Mattress Firm, which has 700 locations nationwide. “The HVAC systems, for example, were frequently left turned down as low as the thermostat would allow even after the sales associate left in the evening. We decided to control as many functions as we could with an affordable system that could afford us a 12-month payback.”
Mattress Firm tested the Lightstat system for one month, using it to control heating, ventilation and air-conditioning (HVAC), interior lighting and exterior signage. It subsequently compared the test stores’ utility bills against their bills in the year-ago period. The savings were significant enough for the retailer to move forward.
As to why Mattress Firm selected the Lightstat system, Butera said the chain was confident that it would provide the most control with the most cost-efficient installation. Although the system works through software licensed by Lightstat, it is housed on Mattress Firm’s own server.
The system’s ease of use was another factor.
“We recognized that the Lightstat team were the right partners to move forward with, and we’ve been extremely happy with the service and knowledge they have afforded us,” Butera added.
Mattress Firm installed the Lightstat system in 245 stores between May and September 2010.
“We completed another retrofit in 2011, bringing our current store count on Lightstat to 530 locations,” Butera said. “We make case-by-case decisions on whether to retrofit acquisitions.”
The system is also specified for new construction.
As to the biggest advantage of the system, Butera pointed to the cost savings.
“We experienced 19% to 30% savings on our utility costs, saving the company approximately $1 million in the first full year of operation,” he said. “The savings will increase as more stores come online.”
The ability to controls lights and HVAC from a central corporate facility is also an important benefit.
“We simply login from any PC and then click on a store location, which allows us to view the status of each HVAC unit, the current temperature in the store and the air temperature at the unit itself,” Butera explained.
The system also alerts Butera to any mechanical failures in the system by sending an email to his Blackberry.
“In addition, we can view and change schedules for on and off times for lights and building signs with the click of a button,” he said. “Temperature settings for heat and cooling can be easily changed as well. E-stats can be controlled or programmed individually or in groups or markets.”
Other important benefits include low cost of installation and operation.
By industry estimates, concrete-slab moisture-related floor-covering failures cost retailers, building owners and contractors more than $1 billion every year. But it’s not just new spaces that present a challenge in this regard. With infill the name of the game in retail development, retailers that open stores in existing spaces also need to be on full alert to the potential for flooring problems.
According to Lee Eliseian, president of Concord, Calif.-based Independent Floor Testing & Inspection, infill locations, while attractive on many levels, can potentially present issues that could lead to short-term flooring problems or even long-term flooring failure.
“The obvious advantage to moving into an existing space is that occupancy cost tends to be lower, but sometimes the rent and construction savings can be more than offset by flooring problems due to age, neglect or substandard construction,” Eliseian said. “Any retailer moving into an existing space should take measures to ensure the substrate is in good shape.”
The biggest culprit is concrete-slab moisture, which can wreak havoc on moisture-sensitive flooring finishes. The trick is uncovering the adverse condition in time to mitigate it.
“There are so many unknowns with existing spaces,” Eliseian explained. “The building’s concrete slab could be five years old, or it could be 30 years old. You may not know what it was used for previously, whether it’s been contaminated or how it was constructed.”
To compensate for unknowns, Eliseian recommends surveying the floor in advance of move-in for moisture-related problems, general conditions and new-product compatibility.
“Any time you have early warning about what potential problems may lie ahead, you are better equipped to deal with them in a more cost-effective way,” he said. Moreover, up-front knowledge may deliver negotiating leverage with a landlord, who when presented with documented problems may pay all or part of the tab for the repairs.
The last thing you want to do is uncover flooring problems after a store has opened, Eliseian noted, because not only has leverage with the landlord been lost but it is far more costly and disruptive to repair.
Supply Chain Trends
As cost savings continue to be the name of the game in retail, supply chain has come under even closer scrutiny as a major expense to be controlled. Chain Store Age talked with George Prest, COO of the Material Handling Industry of America (MHIA), about what lies ahead for the supply chain and global trade, as well as the association’s inaugural trade show MODEX, to be held in early 2012.
What one trend do think will most shape the supply chain in 2012?
There are several supply chain trends we are hearing about from Material Handling Industry of America members and end users. Sustainability is still a hot topic, as well as leveraging labor resources and training. Ergonomics and safety is also big, as well as forklift fleet management and third-party logistics selection.
However, it seems that automation is on top of most agendas right now, whether you’re talking automation equipment or related software, as companies strive to improve the efficiency of their supply chain operations. Within automation, we are hearing a lot about flexible automation, voice, order picking, order fulfillment, mobile computing and visibility solutions.
Will the Panama Canal expansion have an impact on the supply chain dynamic in the United States?
Yes. We see the Panama Canal expansion as a real supply chain game changer. The expansion is certain to have a major impact on the flow of imports into the United States. However, it will also have a major impact on the flow of goods once they get to the U.S., creating new supply chain efficiencies — especially for retailers.
According to Jones Lang LaSalle, 25% of imports currently coming through the West Coast could shift to East Coast ports as a direct result of the canal expansion. By lengthening, widening and deepening the locks, the canal will accommodate much larger ships. In fact, the largest ships today carry just 5,000 twenty-foot equivalent units (TEUs).
When the expansion opens in 2014, that number will jump to as high as 13,000. Most hopes for the canal’s future are for cost savings, which are estimated at $400 per TEU compared with intermodal rates from the West Coast.
JLL cites the Panama Canal as one of the five most compelling change agents in the supply chain going forward. Inland ports are expected to also benefit from the import shift. Of particular note are Atlanta, Chicago and Columbus.
The Ports of Savannah, Charleston, Jacksonville, Miami, Baltimore and Philadelphia have announced projects to enlarge and deepen channels to make way for the larger ships. Hampton Roads and New York/New Jersey ports are already in position to benefit from the shift.
We also expect that more distribution centers will be needed, in the Southeast especially, as a result of this shift. Distribution networks may already be undergoing a significant shift from super distribution centers to a hub-and-spoke model of smaller DCs. The driving force is the high cost of energy and the low efficiency of less-than-truckload shipments typical of the large DC model.
Tell us about your upcoming conference, MODEX 2012.
The inaugural MODEX expo, to be held in Atlanta, Feb. 6 to 9, 2012, is the industry’s newest event to offer end-to-end supply chain solutions for manufacturing and distribution professionals. The event was designed to build out from the material-handling core of MHIA’s successful ProMat event to also showcase solutions for the broader supply chain that may, or may not, be confined to the four walls of a facility.
What kinds of topics will be covered at the conference?
The MODEX 2012 Conference will feature leading-edge topics in manufacturing, distribution and the supply chain, exploring such subjects as the impact of the Panama Canal expansion to sustainability, security and visibility. One of the MODEX keynoters is Alberto Alemán Zubieta of the Panama Canal Authority.
MODEX will also feature keynotes by CSCMP’s Rick Blasgen on the state of logistics and supply chain management, and Georgia Tech’s Donald Ratliff on how supply chain and logistics performance impacts trade.
You can find detailed information on the entire MODEX 2012 expo at MODEXShow.com.