Quality Bicycle Products shifts gears toward green

Quality Bicycle Products

Bloomington, Minn.
Facility size: 200,000 square feet
Employees: 200, including 50 part-time or seasonal
Shifts: 5 days, variable shifts
SKUs: 27,000
Order volume: 5,000 cases per day during peak periods

At many companies, going green is part of the business conversation. At Quality Bicycle Products, a 27-year-old privately held distributor of bicycle parts to independent dealers, its part of the company’s DNA.

Short of walking, after all, there are few modes of transportation that produce fewer carbon emissions than biking. “Green is one of our company values,” explains Paul Zeigle, internal logistics manager for the $200 million + a year wholesaler located in Bloomington, Minn. “A commitment to the environment is important to our owners and it’s important to our employees, many of whom are cyclists.”

In fact, the high cost of energy and current focus on the environment appear to be driving QPB’s business today. “We’re not only seeing an increase in sales this year, we’re seeing demand for non-standard parts that fit older bicycles,” says Zeigle. “We think people are getting their old bikes out of storage and rediscovering cycling.”

QPB’s growing business and commitment to the environment came together two years ago when the company built a 100,000 square foot addition that doubled the size of its distribution center.

Before beginning construction, the QPB team asked: Can we build a LEED-certified distribution center that reflects our commitment to the environment, implement efficient materials handling processes, and have it make economic sense at the same time?

The short answer was yes. How the company achieved those goals is a case study in the opportunities and challenges to implementing a green distribution center.

Re-evaluating ROI
One of the first questions QPB asked as part of the process was whether it made more sense to start fresh with a new space or to demolish a building on a piece of property next door that had come up for sale.

Since one of the principles of going green is to reduce, reuse whenever possible, and to recycle when all else fails, the company decided to buy the property next door, believing that would have less impact on the environment. In fact, the company recycled about 70% of the materials from the demolished building, using it as fill in the parking lot while reusing ceiling beams in the new construction.

Once the decision was made to build on that lot, the next challenge was to evaluate the options available to reach LEED-certification through a lens that also made sense for the business. To do that, QPB set a new return on investment target for the building. “Our usual target was a two-year payback,” says Zeigle. “For this project, we decided that we could accept a 15-year payback for the building itself because it was a longer-term investment.”

A 15-year ROI, as well as the limitations of the property, determined which projects could go forward and which weren’t feasible. “We focused on things that were easy to implement and made economic sense,” says Zeigle. “They weren’t always the most exciting options, but they made business sense.”

For instance, installing a living “green” roof would have been exciting, but it had a 100-year ROI. By the same token, QPB investigated ground source heat pumps for heating and cooling the facility, but the soil on the property wasn’t appropriate for the technology.

Other solutions, however, did fit the bill:

• A 40-kilowatt array of solar panels on the roof provides some electricity for the facility; and on the weekends, when the DC is off-line, any power generated is purchased by the local power company.

• Windows were installed on exterior walls and the roof wherever possible to provide day-lighting. That reduced energy consumption.

• The facility makes use of high-efficiency lighting and a high-efficiency HVAC system.

• Offices were installed above the receiving area to take advantage of the unused vertical space in the facility. The carpeting in the offices was made from 90% recycled materials.

Thinking green extended outside as well:

• Since QPB provides incentives to employees who carpool, bicycle to work or use mass transit, the company was able to turn some of the land typically required for parking into water storage areas. Instead of turf, QPB planted native grasses that didn’t require a sprinkler system to irrigate a lawn.

• Constructed from concrete slabs, the building was left unpainted. Instead, a local artist was hired to put in a copper sculpture around the building.

“Any time we could question a traditional construction method, we did,” says Zeigel. That didn’t always endear QPB to its contractors, “but we were willing to spend extra and wait to get the payback if it was the right thing to do.”

Ironically, the final spending decision was whether to invest money for LEED certification. “We did consider simply doing these things and not applying for LEED since there is a cost associated with the certification process,” says Zeigel. “In the end, we were one of the first LEED Gold additions in the state, and our owner felt it was valuable to share our story and use it as a model for other companies.”

Planning for the future
It’s no accident that the emphasis in the new building was on the structure itself, and not on the materials handling systems. QPB did not intend to simply be green for green’s sake, and applying a 15-year ROI to order fulfillment processes wasn’t practical. “When it comes to designing a system or installing equipment, we’re in an aggressive growth mode,” says Zeigle. “We need systems that can adapt and change to our customers’ needs. We need a quicker payback.”

The one exception was the installation of a high bay, very narrow aisle rack system to reduce the footprint required for storage.

Once the building was up and running, however, QPB brought in an outside consulting company to review the company’s processes in light of where the company was then and where it might be in 10 years.

Green was an option, but it wasn’t the primary focus of the evaluation. “We did want to know if we were using our resources effectively, like printing paper that we didn’t need to print, but what we really wanted was to look at the non-value-added steps in our processes and to develop a road map for the future,” says Zeigle.

The result of the study? QPB found that by rerouting its conveyors, it could reduce the size of the system by 30%; that savings enabled QPB to install high-efficiency motors and still get a two-year ROI. “That was the best example of applying environmental factors to industrial design,” says Zeigle. “By shortening the conveyors and cutting steps out of our processes, our product moves more efficiently through our building.”

And since the plan included a 10-year horizon, QPB is now considering how to continue its growth while minimizing its impact. “We considered redesigning our current facility so that we could continue to serve the whole country from this location,” says Zeigle. “Instead, we’re looking at transportation and fuel costs and looking at a second distribution center that would put us closer to our customers in the west.”

Staying lean and green
Going forward, QPB is committed to remaining green through continuous improvement, which includes an employee group focused on the environment. That effort is already paying dividends.

Last year, for instance, QPB noticed that it was paying to dispose of plastic strapping, poly bags and shrink wrap. After some research, the company found a plastic recycler that would drop off a trailer to collect and haul away the waste for recycling. What’s more, instead of paying to dispose of the trash, the company now earns about $2,000 per year for the waste material.

QPB also installed motion sensors in the VNA area. Now, the aisles are dark unless an operator is working in that area, thus saving energy.

The company also recently instituted a gain-sharing program that awards credits to customers who agree to use ground freight instead of free second-day air.

Now that the facility is up and running, QPB considers the new distribution center a green success. “We had specific goals around energy, water consumption and waste and we have reached them,” says Zeigle. “In 2007, we reduced our consumption of natural gas by 9%, our water consumption went down by 17%, and we reduced the volume of waste by 40% while creating a small revenue stream.”

At the same time, QPB says the quest to become more efficient is ongoing. “Through our continual improvement process, we will constantly re-evaluate what we’re doing,” says Zeigle. “We want to continually look at our processes and ask: Are we doing the right thing?” 

System suppliers
LEED architect: LHB Engineers and Architects
Long-range systems planning and design: Fortna
Systems integration: Quality Bicycle Products
WMS: HighJump Software
Conveyor and crossbelt sortation: TGW Systems
Horizontal carousels: Sencorp/White
Lift trucks: Raymond
Racking: SpaceRak
RF scanning system: Motorola

This article previously appeared in the September 2008 issue of Modern Materials Handling