Operations and Management: Conserving Energy in the DC

You may have already cut your distribution center (DC) costs by switching to less-expensive packaging or installing a more efficient conveyor system. But you may have overlooked trying to reduce your energy bills.

According to The Guide to Energy Management Opportunities in Warehousing from the Warehouse and Education Research Council (WERC), energy and utilities typically account for 4%-9% of warehouse expenses. The following tips can help you keep those costs to a minimum.

  • Don’t skimp on insulation. Many older buildings were not properly insulated when they were built because energy costs weren’t as worrisome compared with today. So adding insulation to your roof and walls will keep your DC warmer in the winter and cooler in the summer.

    When Burlington, VT-based outdoor tools cataloger Gardener’s Supply Co. reroofed its distribution center nearly five years ago, director of operations Irwin Langer made sure to add more insulation at the same time — not only to act as a buffer against the harsh Vermont winters but also to keep air-conditioning costs down in the summer.

    What’s more, by installing insulation around your loading dock doors, you can prevent heat (or air-conditioned air) from escaping as employees ship and receive goods. You need not spend tens of thousands of dollars: Dock door sealers come in a variety of shapes and sizes, from low-tech compressable foam to the more advanced air curtains or vinyl strip barriers.

  • Make the most of natural (and existing artificial) light. If it’s at all feasible, considering installing skylights in your DC so that you can supplement artificial lighting with free natural light. When it built its distribution facility five years ago, Reno, NV-based outdoor gear manufacturer/marketer Patagonia included skylights for that reason: to conserve energy and save money.

    Also, the WERC recommends that you keep your facility floors clean and apply a high-gloss sealer to them. The shiny surface will appear to magnify whatever natural light is available (and the artificial lighting too, perhaps enabling you to eliminate some lights).

  • Install lights with motion detectors. To control lighting in unfrequented areas of the warehouse, install motion sensors. In Patagonia’s reserve stock area, high-pressure sodium lamps (which at capacity operate at 400 watts) burn at 200 watts until the motion sensors detect movement. “We are 50% more efficient” in lighting, declares distribution center director Dave Abeloe.

    The motion detectors are just one part of Patagonia’s elaborate energy-management computer system, which also includes timer-based lighting controls. The $300,000 system allows Patagonia to be nearly 30% more efficient than the standard DC in terms of total energy consumption, Abeloe says. The cataloger realized a return on its investment in just three years.

  • Work with local energy suppliers. Local energy suppliers often provide incentives for customers that work with them to install energy-efficient products. For instance, Brattleboro, VT-based organic foods cataloger Northeast Cooperatives received $110,000 from local utility Efficiency Vermont for installing more-efficient refrigeration and lighting systems in its DC. As if that weren’t reward enough, Northeast Cooperatives is now saving $140,000 a year in energy costs.

    “Our original Freon refrigeration unit used the most environmentally friendly technology that was available to us at the time, but it was located outside and used a great deal of power,” says Northeast Cooperatives CEO George Southworth. “With technical assistance from Efficiency Vermont, we were able to install an indoor, ammonia-based refrigeration unit that is more cost effective, easier to run, and requires less maintenance.”

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