When GREEN Moves Front & Center for Distribution Centers

By Gary Forger
Senior Vice President, Professional Development
Material Handling Industry of America

There’s no question that green (or sustainability, if you prefer) has taken on a new importance in business during the past year. What was once considered to be a “nice to have” attribute is rapidly becoming a corporate edict on a grand scale. And it’s becoming important throughout the supply chain.

In fact, companies as diverse as New Zealand’s dairy products supplier Fonterra and worldwide retailer Wal-Mart are part of the corporate green movement. Like others, both are actively working to reduce the carbon footprint of their supply chains.

The opportunity here is huge. As much as 75% of a company’s carbon footprint comes from transportation and logistics, according to eyefortransport, a provider of logistics and transportation information and services.

In survey results (www.eyefortransport.com/greensupplychain07) filed in July 2007, 59% of respondents say that green issues are either important or very important. Another 20% rate green issues as fairly important. Only 6% say green is not important. More than 270 transportation and logistics professionals in a range of industries responded to the survey, reports eyefortransport.

Looking forward, 69% expect that green will become more important over the next three years. “Amazingly, 9% of respondents identified green issues to become the No. 1 priority for their transport and logistics processes over the next three years,” declares eyefortransport.

Nevertheless, green efforts can be bedeviling. “The greening of transportation and logistics is still a vague and unsettling thought for many,” reports eyefortransport. “However, it is now clear that those who are working on environmental efforts have found the ROI in green transportation and logistics. Based on the responses to the survey, it is evident that lean and green means gold if done in an informed and strategic fashion.”

Hallmark is one company that has been capitalizing on that ROI for many years. In a presentation last year, a company spokesman said energy saving programs have reduced costs by $1 million annually since 1995. Hallmark has also reduced solid waste 70% since 1990. Similarly, hazardous waste has been reduced 90% during the same time.

As Hallmark makes abundantly clear, not every green effort needs to be on the scale that Wal-Mart and Fonterra have chosen. There is plenty of opportunity right in the average distribution center.

Cutting CO2 emissions is one of the top priorities in green. It is estimated that buildings in general are responsible for nearly 40% of CO2 emissions in the U.S. This level is due to energy use, water consumption and other operational issues, reports Today’s Facility Manager blog. “CO2, a greenhouse gas that is a major contributor to climate change, has increased 18% since 1990 due to the rise in energy consumption,” reports the blog.

In early 2007, the U.S. Green Building Council (USGBC) testified before a Senate committee on trends in green. Peter Templeton, USGBC’s vice president of education and research, said that green buildings use 20-50% less energy and reduce CO2 emissions 40% compared to conventional buildings.

The USGBC is the leading national organization dedicated to sustainable building design and construction of all types. One of its best known programs is a rating system known as LEED (Leadership in Energy and Environmental Design). It is a tool for rating the green value of buildings of all types and sizes. LEED certification can be earned at four levels – basic, silver, gold and platinum (see sidebar for details).

Growth in LEED certified buildings is significant. In 2006, the number of LEED-certified projects increased 70%. The Council says that more than 3 billion square feet of construction space is involved with the LEED system today.

“If you’re starting to design or build a new building project or development today and you don’t certify it as green, it will be functionally obsolete the day it opens and economically for its entire lifetime,” said Jerry Yudelson a green building consultant and former board member of the USGBC. Interestingly enough, he made that comment at the Green Cities ’07 conference in Sydney, Australia.

Here in the U.S., JohnsonDiversey, a supplier of commercial cleaning and hygiene products, is one company that clearly agrees with Yudelson.
The company’s new 550,000 square foot DC in Wisconsin is reportedly the largest LEED-certified distribution center in the U.S. The USGBC has awarded the DC a gold level LEED certification for new construction.

The JohnsonDiversey DC features a 32-foot ceiling, storage for 47,000 pallet loads and has 55 loading docks. And the range of green components at the DC is nothing less than impressive.

The building is entirely powered by renewal energy, wind or biomass, making it the only warehouse of its size in the U.S. to make this claim. As a result, the DC will reduce its annual CO2 emissions by 3.2 million pounds. That’s enough energy to light 230 typical homes for a year.

Fans, not air conditioning, cool the facility. The roof is white and insulated to R-27. Various types of equipment cut water consumption 51%. An energy efficient lighting system and a white-painted interior improve lighting quality and reduce energy consumption.

“We designed this to be a green facility from the very start,” explained Stu Carron, director of global facilities and real estate at JohnsonDiversey, to DC Velocity in its December 2007 feature on the facility. “We just weren’t going to build a non-green building. You can do so much better when it comes to energy efficiency, water use, and productivity in the building when you build green from the outset,” added Carron.

And their efforts have not gone unrecognized even beyond LEED and various publications. In addition, the DC was awarded the Green Development Award for 2007 by the National Association of Industrial and Office Properties.

Needless to say, JohnsonDiversey is not alone in its quest. Other companies working with LEED to certify their DCs include Patagonia, REI, ProLogis, Half-Moon Outfitters, and Frito-Lay, to name just a few. You can even catch a 6-minute tour of Patagonia’s LEED-certified DC on YouTube. Go to www.youtube.com/watch?v=nr9WU4-NAc4.

Clearly, we are just at the beginning of green in the supply chain. And getting there is not an overnight trek. Perhaps Dave Abeloe, Patagonia’s DC director put it best. “Green initiatives are part of Patagonia’s philosophy. Doing the right things in business that sustain, not deplete, our environment are at the core of our company.”

Click here to learn more about LEED.

To learn more about the business case for going freen, plan now to attend the keynote address at NA 2008. You can find more information and register to attend at www.NAshow.com.

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