HOW TO MAKE YOUR WAREHOUSE EVERGREEN

An organization that is committed to evergreen activities is bound to see growth and profits and can also earn points with the public and regulators for utilizing environmental practices that are positive.

Making your warehouse evergreen does not require that you start over from scratch but it does mean that you are likely faced with some major changes that have to be made. The good news is that while you will have to invest in some changes the majority of the changes will actually be cost saving in the long run.

As more and more companies are focusing their practices on sustainability and environmental responsibility, more and more companies and end users are looking to their distributors to see if they are using sustainable practices in their warehouses.

Evergreen practices are not necessarily built on a environmentally friendly platform but are environmentally friendly practices by the nature of the activities.

Evergreen warehouse’s make practical business sense. A business stands to reduce costs by 3%-5% by adopting evergreen practices.

“HEC – a University in Paris – did a study on sustainable procurement. 133 large multinational companies were surveyed.  93 percent of the procurement professionals surveyed considered sustainable procurement “a critical or important objective for their companies.” Further, 91 percent of companies were formally integrating corporate social responsibility into their supplier selection process.

Based on these findings, one would expect that 3PLs that provide warehousing services would face pressure to prove that they provide sustainable distribution. And to a certain extent they do. One industry contact, for example, told me they are seeing an increasing number of RFPs looking for 3PLs capable of providing warehousing services with zero landfill impacts.”

The interest in evergreen operations is greatly increasing. So how is your warehouse doing? Here are some things to consider about your warehouse to determine what you can be doing differently to improve.

The HEC study mentioned about offered the following as considerations for improving the status of your evergreen attempts:

Geographical location- Is the warehouse located near public transportation? How far is it from a large transport hub? 

Sustainable Sites – How big is your parking lot? Sounds crazy but a really big parking lot causes something called a “heat island”. 

Water Efficiency – Has irrigation for landscaping purposes been minimized? Is water being used efficiently inside the building?

Energy and Atmosphere – Is the warehouse using energy efficient equipment? Minimizing energy demand? Using sustainable energy?

Materials And Resources – Were renewable materials use to build a facility? In an existing building, is the warehouse purchasing cardboard with recycled content for packaging?  Is it purchasing materials for ongoing operations, like light bulbs, that are energy efficient?

Indoor Environmental Quality – Is this a comfortable environment for employees to work in?

PACKAGING MATERIALS

One of the key ways to amp up your evergreen status is to use packaging materials that are recyclable, reusable and that can be repurposed.

Look up and down the supply chain. What are your vendors using? Can your end users do something other than trash your packaging?

There are packaging solutions that are available that can be used through-out the supply chain life cycle. Some packaging can easily go from supplier to production to end user and back again.

Is your packaging flexible? Can you adjust the packaging up and down to reduce waste? Are you still using things like fillers in your cartons?  How much of your packaging is wasted every year? These are all valid concerns that you should be assessing.

DESIGN A VENDOR COMPLIANCE PLAN

Get Vendors on Board

While you are making improvements to your own evergreen activities you should get your vendors on board as well. A vendor compliance programs is a very effective way to enhance evergreen strategies.

You can expect some really positive outcomes by implementing a compliance program for your vendors. Studies have shown that a solid compliance program will increase warehouse operations making them far more streamlined. 

Vendor compliance programs also will reduce the amount of product handling that is necessary.You can also expect transportation improvements on both time and effective movement.

A well-known consultant had to following to say about vendor compliance programs “Integrating common product identification and tracking processes all the way upstream to offshore or domestic vendors helps to ensure proper visibility and seamless movement of product through the supply chain.”

Using clear and specific labeling requirements and packaging instructions can help each individual item a part of the process of improving the warehouse efficiency which of course points towards a more evergreen environment in the warehouse.

Like most optimization efforts the small things add up and make a large difference over time. Offering incentives to vendors instead of punishment tools will improve compliance.

SCHEDULE SIMULTANEOUS SHIPMENTS

Shorten Trips

Streamline offloading by arranging shipments to leave and arrive at the same time. This keeps from having to have to waste manpower. There will be less setups and breakdowns at loading and unloading areas. It also consolidates the time and labor that is necessary to unload and load shipments.

Arrange with vendors to schedule delivery times precisely.  Using metrics to establish clearly defined timeliness can greatly help to improve overall performance and increase the productivity of the warehouse while not “wasting” time or manpower hours unnecessarily.

You can also combine shipments. If you have an order that is going to two separate vendors that are located in the same area why not combine the orders? Ask your vendors, retailers to get on board with saving on the shipping costs and the amount of on the road time that drivers have to spend burning up fuel.

Offer incentives if you can get business associates on board. The cost savings will be tremendous and the activity will be kinder to the environment.

USE CROSS-DOCKING PRACTICES

Get Rid of the Middle Man

Cross-docking may require a significant investment but you will likely be able to recoup the costs relatively quickly. While cross docking may not be the best choice for smaller operations it can be a really good beneficial idea for larger operations that are on line with being more a distribution center than just a storage warehouse. 

With this process products are loaded from transport container to another without ever actually entering the warehouse storage. Products are sorted in a staging area before they are loaded onto the next transport. This works very well for large distribution centers that are located strategically for moving products from one transportation route to another.

This process reduces the space needed for storage which in turn reduces the footprint of the warehouse, which reduces the amount of energy used in the warehouse, the amount of labor and so on and so forth. 

It is a process that greatly reduces overall costs but it is a highly complex system to arrange, monitor and implement. There is a learning curve that is involved and it does require knowledgeable staff members and the proper training.

Transportation and storage costs are some of the highest costs of doing business so if you can reduce one or the other or both than you will increase revenue nicely.

OVERALL

There are other tried and true methods of improving warehouse function, efficacy and productivity that will greatly improve the entire supply chain from vendor to end user. Like every other organization function improvement does not happen overnight. It is a process that can take some time but with the right planning and implementation the process will be seem less.

Like every aspect of the supply chain it is imperative that transparency, cooperation and collaboration takes front row seats. Having everyone in the supply chain on board with the changes that need to be made will make the process go smoother and it will greatly improve the outcomes.

Periodic audits will be necessary the first year or so (every 2 months or even every 30 days)to ensure that everyone is in compliance with the new way to do business. After the first year, annual audits should be conducted. Paying attention to how your changes are coming along will ensure that everything stays on track.