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Many large corporations have adopted Sustainability programs - Wal Mart, Proctor & Gamble, Exelon, Duke Power to name a few. They do this not just to appeal to the environmentally aware portion of the population, but because they have found that becoming more sustainable saves money.
As a business to business distributor, you have a similar opportunity. Let's start by defining sustainability, then we will look at some of the actionable opportunities that exist for industrial distributors. Sustainability is conducting a business in a way that respects the current and future environment - i.e. offering products that use less packaging, delivering products with less transportation, and looking at internal processes with the aim of reducing waste and pollution.
Here are some key areas that most distributors can look at in an effort to be more sustainable and reduce cost:
- Energy reduction - this has proven to be the largest area of cost savings potential for many companies. In the long run, energy costs are going to continue to rise. For a distributor, making sure that your warehouse is properly insulated, doors and windows are tightly sealed, office and warehouse areas are illuminated only when people are present, are excellent opportunities to reduce heat and electricity waste and save money. Many firms have found it cost effective to have a professionally conducted energy audit to identify opportunities.
- Renewable energy sources - companies as large as FedEx and as small as Devon Bank have installed solar panels on the roofs of warehouses or windmills next to their building to produce some or all of their energy. The excess energy produced is being sold back to their local utility. There are tax savings and other financial incentives associated with many of these projects.
- Transportation - Trucks are the primary transportation method for moving products for distributors. Freight consolidation, better route planning, and maintaining your own vehicles,. can yield cost savings, while helping your business become more sustainable. What are the opportunities to reduce travel for your sales team, have you considered encouraging sales people to drive hybrid or electric vehicles? How often do you effectively substitute a face-to-face meeting with a video conference? This can have a dramatic impact on your carbon footprint.
- Primary and secondary package design - there are opportunities here to work with your suppliers and customers in reducing excessive packaging, increase the recycling of packaging, and the re-use some packaging materials. What is your company doing to collect discarded packaging, corrugated, pallets, and other shipping products for recycling instead of adding them to a landfill?
Getting started on a new program is never easy. One suggestion that we have is to collect the following information both in units and dollars. This will give you an idea of just what the cost savings opportunity might be.
- Electricity consumed
- Natural Gas Consumed
- Fuel Oil Consumed
- Miles/Kilometers driven
- Miles/Kilometers flown
- Water used
- Waste Water discharged
- Materials recycled
- Solid Waste disposal
The May/June 2011 issue of Industrial Supply Magazine featured a story about Acme Construction Supply. Acme built a new sustainable facility that has received LEED Silver certification. LEED certification requires the building owner to select features such as energy reduction, water conservation, and the use of environmentally friendly materials. If enough points are generated using a U. S. Green Building Council checklist, the building is certified.
Lift trucks are an important asset for most distributors. Modern Material Handling's August 2011 issue featured news about hybrid lift trucks and lift trucks powered by lithium ion batteries. Hybrid lift trucks use a combination of batteries and diesel power. Lithium ion batteries have been used in a walkie-type truck for the European market. Their small size provides design and service advantages.
These are just a few examples of actions being taken to make distributors more sustainable in the future and to reduce costs at the same time.