Roads Paved With Green
Last year’s buzz is this year’s action item. All the talk about embracing green initiatives started everyone thinking, but a convergence of events is pushing companies into adoption. Rising fuel costs and the economic slump are key drivers, but saving the environment has grown beyond a politically correct concept to become a prevailing mind-set. It’s not just the right thing to do, it’s the necessary thing to do.
Go Green, Save Green: Sustainable Supply Chain Improvements, a recent Web conference hosted by the Material Handling Industry of America (MHIA), Charlotte, N.C., highlighted opportunities where retailers could reduce energy consumption and costs in two critical areas—inside a distribution center (DC) and in transportation.
“The greatest potential for improvements,” suggested Kenneth Raehrdanz, distribution and warehousing industry manager for Dematic Corp., “is in the more than 600,000 warehouses and DCs already in existence in the U.S. Retrofitting existing systems offers the biggest opportunities to turn warehouses into ‘greenhouses.’”
Quipping that he was doing his part to be green by turning out his office lights during the conference, Raehrdanz said there are green savings to be found inside DCs in storing, staging and lighting; in conveying and sorting processes; and in the physical layout of the warehouse.
For instance, energy usage can be reduced significantly by turning off the lights when there is no activity in an area, which is easily accomplished through the installation of motion-activated lighting systems, and by stopping conveyors when product is not being moved. Alternatively, conveyors might be slowed to create savings without sacrificing throughput.
“In the area of warehouse-control software, you can use mechanization and optimization strategies to work smarter and compress throughput to one shift,” noted Raehrdanz.
By installing a “run-on-demand” solution, the DC can shut down or put a system into sleep mode rather than moving product at top speed every shift. In one case study, Raehrdanz said energy consumption was reduced more than 20% by shifting to the run-on-demand model. A side benefit of this model was less wear on the equipment, essentially extending the life of a capital investment.
In the area of storing and staging, particularly in cold-storage or freezer areas, Raehrdanz reported that converting to high-density storage has cut energy consumption in half for some DCs. Additionally, the use of natural light and brightly colored paint schemes that reflect light have also contributed to improved efficiencies.
Picking processes may contribute to improvements as well. For instance, light-directed, radio-frequency or voice-directed systems are more efficient and more environmentally friendly than paper-based operations. Finally, semi- or fully automated system designs typically enable the warehouse footprint to be smaller, which in and of itself reduces energy consumption because fewer lights are required and fork trucks typically travel shorter distances.
On the transportation side, Erv Bluemner, VP of transportation product strategy for RedPrairie Corp., Waukesha, Wis., reminded listeners that “any reductions in fuel consumption create real opportunities to improve the bottom line.”
For instance, excessive engine-idle time burns as much as one gallon of fuel per hour.
Fuel-saving strategies that were discussed included installing systems to monitor idle time, implementing route-optimization tools and establishing governors on engines to ensure that they run in the desired “sweet spot.”
Bluemner noted that software tools can be leveraged to gain transportation efficiencies, such as creating shipment profiles that can be translated into route consolidation and a reduction in empty back-haul miles.
“Using consolidation algorithms we can align loads for more efficient routing,” he said. “Specifically with back-haul miles, postponement strategies can identify shipments that might be delayed a day to piggyback onto another route and save mileage.”
Bluemner recommended reviewing existing fleets to update aging equipment with EPA-compliant engine modifications. Improvements may also be realized by taking steps as simple as basic engine maintenance, installing a different grade of tires, or adding devices to reduce wind resistance on tractors.
Wal-Mart to sell earth-friendly CDs
SANTA MONICA, Calif. As part of Wal-Mart’s “Earth Month” the company is selling more than 20 Universal Music Group titles that come with special earth-friendly inserts. The inserts are made with special seed paper and, according to the companies, can actually bloom into wildflowers.
The inserts, in addition to being good for the environment, also offer consumers three free digital downloads from Universal Music. Universal also said that a number of its new CDs will be packaged in third-party certified, renewable recycled board and recyclable paper.
ODP urges rejection of Levan nominees
DELRAY BEACH, Fla. Office Depot is continuing to urge its shareholders to reject dissident nominees and elect the company’s nominees to its board of directors at its annual shareholders meeting this April.
In a proxy statement sent to investors, Office Depot said that Alan Levan’s proposed nominees would do little to help improve shareholder value. According to the statement, Levan’s company, Levitt Corp. has seen its share price fall about 93% over the past three years and that its subsidiary, Levitt and Sons, is in bankruptcy. Office Depot also noted that BankAtlantic, of which Levan is chairman and ceo and one of his nominees, is president of real estate, construction and development, share price has dropped approximately 75% over the past three years.
Office Depot also cited news reports that commented on Levan’s failing business ventures, as well as others that said that his nominees are not qualified to serve on Office Depot’s board of directors.
The company pointed out nominee Mark Begelman’s experience with Mars Music, a company he founded in 1997 that went bankrupt in 2002. According to Office Depot, many news reports attributed this failure to a flawed business strategy.
According to Office Depot, when Levan’s other nominee, Martin Hanaka served as chairman of Sports Authority from 1998 to 2003, the company saw its price fall by about 13%.
Office Depot stressed that its directors best understand the company and are well-suited to help the company grow.
“We strongly believe that removing two of the most experienced retailing executives from our board, including our current ceo who is driving the implementation of our strategic turnaround plan, would be highly disruptive, could delay the implementation of internal and external initiatives and could damage prospects for a successful turnaround,” Office Depot said in the proxy statement.