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Food and beverage chains cut waste out of supply chain

As supply chains go green, the food and beverage industry is looking for ways to take waste out of the supply chain.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 8/1/2008

If going green in the supply chain is a journey, then the food and beverage industry is checking departure schedules and deciding whether to get on the train.

“Lots of talk, very little action,” is a sentiment that was consistently expressed by the analysts, consultants and vendors we talked to about green trends in food and beverage, especially when it comes to green materials handling. “It doesn't matter what business you're in,” says Jeff Karrenbauer, president of Insight Inc. (703-366-3061, www.insightoutsmart.com), a company that does supply chain analysis and design for leading enterprises. “What you'll find is a few industry leaders that are questioning just what it means to have a green supply chain, but the actual projects are few and far between.”

That said, the dialogue is underway. “We now see a green section on about 50% of the RFPs we're asked to quote on, especially from large companies,” says Chad Collins, vice president of marketing and strategy for HighJump Software, (800-328-3271, www.highjumpsoftware.com), one of the warehouse management system (WMS) providers with a significant presence in the food and beverage industry. “We're promoting the same benefits of space utilization and efficiency that we have always promoted. But with the interest in green initiatives, those benefits are being used to justify new projects.”

Given that companies are just now addressing what it means to be green in their materials handling operations, we talked to eight suppliers who regularly sell to food and beverage customers and asked them to focus on one of the central tenets of going green—the reduction of waste, whether that is wasted energy, wasted labor or wasted resources—and suggest ways materials handling can help that industry make better use of what they have while reducing their carbon footprint.

Reduce miles traveled with network design and reduce empty trailers with a transportation management system (TMS): The food and beverage industry is in the midst of consolidation. That creates an opportunity to design a new and greener supply chain based on the location of plants and distribution centers. “Network design tools can be used to model the carbon footprint movement per unit of various supply chain designs,” says David Johnston, senior vice president of supply chain for JDA Software Group (800-438-5301, www.jda.com). “And a transportation management tool can be used to determine whether it's more beneficial to use rail than a truck.”

Another option: Use an on-demand collaborative transportation management solution to reduce the number of empty trailers, says Pete Stiles, vice president of marketing for LeanLogistics (616-738-6400, www.leanlogistics.com). “In a collaborative model, you have millions of trailer movements going through the system, which creates more round-trip opportunities for shippers,” says Stiles.

Implement a warehouse management system (WMS): For years, the selling point for a WMS has been reduced inventory and reduced labor costs, says HighJump's Collins. Those benefits are now getting bonus points for contributing to the overall effort of greening a distribution center. “A WMS allows you to better utilize the space in your facility, and to better utilize your assets, including your labor force and your equipment,” says Collins. “Those efficiencies complement a company's broader effort to green their supply chains.”

Save space and reduce lift truck movements with dense storage: The food and beverage industry has traditionally used public warehousing to handle seasonal spikes in business. “A manufacturer could lease an empty warehouse, throw in some lift trucks, store pallets on the floor and truck inventory back and forth,” says Dennis Hartman, CEO of Twinlode Corp., (800-535-6719, www.twinlode.com). “That's no longer cost-effective to do.”

One solution: Re-rack an existing distribution center with high density, drive-through pallet racks, including racks that can handle two pallets per bay instead of one. The combination of high density and double handling can triple the number of pallets that can be stored in an existing space while reducing the number of lift trucks required to get the job done, Hartman says.

Save space with a mini-load case storage system: Wholesale grocery warehouses are among the most labor intensive in any industry. Warehouse management systems, bar code scanning and voice recognition have streamlined the picking process, but floor storage still takes up a lot of space. The alternative, says Art Eldred, corporate business development manager for the food industry for Dematic (877-725-7500, www.dematic.com), is an automated mini-load case storage system with dynamic slotting. The dense storage and automation enabled by the mini-load not only reduces the overall footprint of a DC, it requires less travel time for order pickers.

Cut energy consumption with automated storage: One factor unique to the food and beverage industry is the need for refrigerated and freezer space. Automated storage and retrieval systems (AS/RS) not only reduce the overall footprint required for storage, they can also reduce energy costs associated with cooling. “Taller, more-efficient warehouses save up to 30% in cooling costs for refrigerated warehouses and automated warehouses require less lighting, which also reduces energy consumption,” contends Juergen Conrad, director of sales for Westfalia Technologies (800-673-2522, www.westfaliausa.com).

By installing an AS/RS in a new distribution center, Organic Valley Family of Farms (www.organicvalley.coop), the country's largest cooperative of organic farmers, decreased the amount of space originally intended for storage by 40% and reduced energy costs by 40% over a conventional warehouse.

Extend automation and reduce manpower with layer picking: Big box retailers and grocery stores are increasingly demanding mixed pallets with multiple layers of SKUs. Manual palletizing often results in damaged product that must be recycled and remanufactured not to mention worker compensation claims. Instead, implement a layer-picking lift truck attachment that enables one operator to move the same number of cartons as five workers on the floor. “The unit leaves no carbon footprint because there is no additional energy required to operate the attachment,” says Phil Read, vice president of sales for Tygard Machine and Manufacturing (724-746-4500, www.tygardclaw.com). “Meanwhile, companies have reduced their worker compensation claims by up to 70%.”

Extend battery and tire life, reduce lift truck traffic with automatic guided vehicles (AGVs): One well-known beer company replaced lift trucks at the docks with AGVs designed to automatically load trucks. While labor savings was the over-riding factor, a byproduct of that implementation is longer battery and tire life. “By moving to fast-charging technology, we can monitor battery usage to get the most out of the battery,” says Bruce Buscher, vice president of sales and marketing for Jervis B. Webb, a subsidiary of Daifuku (248-553-1000, www.jervisbwebb.com). “We're also finding that we can get by with a less expensive, recyclable battery.” What's more, Buscher says, an AGV is easier on tires than a fork truck. That results in fewer tires in the landfill.

Going underground saves energy for Kraft

It looks a little like a place Batman might create if he were designing a warehouse: 400,000 square feet of refrigerated warehouse space below the ground in a limestone mine in Springfield, Mo.

Touted as Kraft Foods' largest refrigerated warehouse, the space was designed with energy efficiency and sustainability in mind. Built by Springfield Underground (417-874-1400, www.springfieldunderground.com) and operated for Kraft by Exel (800-272-1052, www.exel.com), the facility boasts a solid limestone roof and ceiling, limestone structural columns and walls that are 35% limestone. Material recycled from quarry operations was used to provide building fill material. The combination provides natural insulation and a constant year-round temperature of 60°F.

“We're extremely excited about this new facility, which we estimate will use 65% less electricity than a comparable surface warehouse,” says David Klavsons, Kraft's vice president of logistics. “The energy savings roughly equates to the annual power requirements of 700 homes.”

The energy savings come in a variety of ways:

  • With a low natural temperature, maintaining a refrigerated 36°F to 38°F requires one-third the energy of a comparable above-ground facility.
  • Those savings are enhanced by high-efficiency refrigeration equipment with reduced horsepower requirements.
  • High-efficiency lighting reduces monthly energy consumption by an average of 28% to 48%.
  • Each of the facility's 30 lift trucks has one battery and a charging station that automatically services and equalizes batteries to minimize acid or lead waste.

Klavsons further estimates that by consolidating distribution into one location and reducing stops by Kraft and customer trucks, the food company will save 180,000 gallons of fuel and reduce carbon dioxide emissions by approximately 4 million pounds per year.

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