September 26, 2015 Adidas Cuts Energy Use in Its Global Distribution Centers

Volume 18 | Issue 5

…Savings Come From Changes Big and Small…adidas Group is, by All Measures, a Distribution Powerhouse.

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In 2014, the company generated sales of € 14.5 billion and produced more than 660 million product units. These products were received, packaged and shipped in adidas Group’s 15+ million square feet of owned or leased distribution space globally.

The company’s Energy and Environment Team knew that its distribution centers could be more energy efficient. The team had made investments in LEDs, building automation and efficient ventilation, but the largest energy user in these facilities is often the Material Handling Equipment (MHE). The team’s goals were to improve existing MHE efficiency and to set smart guidelines for new construction.

Enter Eric Shrago of Columbia University. Shrago was a 2014 EDF Climate Corps fellow, spending his summer as an energy management resource to adidas Group through Environmental Defense Fund’s unique fellowship program. He led the investigation into the Energy and Environment Team’s two key goals by using adidas Group’s Spartanburg, South Carolina distribution center as a model.

The Spartanburg facility has 2 million square feet of distribution space that sorts and ships hundreds of thousands of items of apparel, shoes and sports equipment daily. Twelve miles of conveyor belts and two large sorters are powered by 1,600 motors. The site is considered “semi-automated” and spends roughly half of its electricity bill on its MHE.

The Energy Investigation Begins
Shrago focused on several major target areas:

Motor Efficiency: Shrago first looked at the efficiency of the motors that drive the conveyor belts. He found that there would be energy savings from upgrading the motors, but at Spartanburg’s relatively low electricity rate of $0.08/kWh, the energy savings did not justify a proactive retrofit. That said, when a motor died, there was a compelling business case to replace it with a “premium efficiency” motor, which would pay for itself in approximately two years.

Belts & Rollers: The Spartanburg facility mostly has “roller belts,” a relatively efficient belt type. However, the most efficient conveyor is the “Motor Driven Roller” (MDR). These systems have no belt, and each roller only runs when triggered by a sensor. While there is a cost premium for MDR up-front, there is considerable electricity and maintenance savings over the life of the equipment.

Runtime: Shrago found that, in general, the MHE was running more than necessary and that several belts ran nonstop. If these belts only cycled on as needed, Shrago estimated that runtime could fall by half and deliver a proportionate energy savings. There would also be additional maintenance savings from reduced motor runtime.

Warehouse Management System: Perhaps Shrago’s key finding – and one that resonated with distribution center managers at other sites – was the hidden energy savings available in the MHE’s complex Warehouse Management System (WHS). For example, Shrago watched as the WMS software counted down, which should have shut off a section of conveyor due to inactivity. Instead, the clock reset and the belts continued running. Shrago observed this cycle play out several times. He found that a secondary software condition was preventing several conveyor sections from turning off when inactive. Reprogramming the WMS would save the Spartanburg facility tens of thousands of dollars annually.

Success is in the Details
Shrago’s investigation also identified other leading practices that could transfer to existing and future distribution centers.

Interchangeable Workstations: Workstations like Seeding, Packing and Value-Add should be functionally interchangeable, rather than individualized for a specific task. This enables a smaller facility footprint and a more resilient operation.

Weight Sensors: Sorters are typically designed so that the belts at the base run constantly. When a wave of product cascades through the sorter, the belts are on and ready to take the cartons away. At the end of a product wave there is often a period of inactivity. Adding weight sensors to the belts to detect the product flow could result in a 30-50 percent savings.

Employee-activated Controls: “Green cords” are pull cords that start a belt, allowing an employee to turn on a section of conveyor for a set time. This is useful in areas with sporadic demand.

Employee-led Night Audits: Since most facilities operate at a reduced pace during the night, distribution centers benefit from sending staff into the operation after hours with a critical eye towards unnecessary energy uses.

Moving Forward
Retrofitting MHE systems is complex and facility downtime is very expensive; there is a clear business case for designing and installing efficient equipment and controls during construction.

adidas Group’s key message is this: Reducing first costs during construction won’t optimize efficiency over the long term. Model and compare lifecycle cost of MHE systems and hold vendors to high standards as partners in energy management.

adidas Group talks a lot about lifecycle cost. Operating costs like energy and maintenance are typically multiples of the initial equipment cost over the life of an operation. It is smart business to carefully consider these cost implications when designing systems.

Here is how adidas Group is thinking about new distribution center construction:

• Design systems that are right-sized for the job, have inherently high energy efficiency, and only run when needed;
• Make workstations interchangeable;
• Enable granular controls – even if they cost more initially – so segments of the operation can easily power up and down;
• Install sensors on all belts. Link these to the WMS and carefully consider conditions for shutdown;
• Prefer Motor Driven Rollers (MDR) unless belts are absolutely required by the operation;
• Specify premium efficiency motors with soft starters, except for specific zones where lower runtimes do not warrant the upcharge;
• Designate a professional responsible for energy management at each facility. Key tasks – monitor the cost per item shipped, hold regular efficiency check-ins with maintenance and engineering staff, refine and adjust WMS settings based on trends and operational needs and check MHE systems for efficiency.

A Scalable Solution
Warehouses and distribution centers are a key link in the global supply chain: Virtually every vendor that that sells to the public has products flowing through such facilities.

adidas Group has reduced energy and costs in its Spartanburg distribution center. As the company rolls out the lessons learned to its other distribution centers worldwide, that number will continue to grow.

Victoria Mills is managing director of Environmental Defense Fund (EDF)’s Corporate Partnerships program and directs EDF Climate Corps. EDF, a leading international nonprofit organization, creates transformational solutions to the most serious environmental problems. EDF links science, economics, law and innovative private-sector partnerships.

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