Warehouse owners and managers around the world are taking steps to reduce their consumption and become more sustainable in a number of different ways. However, very often they cast away easier and less costly “low-hanging fruit” options and decide to go with more costly programs that may address just one type of consumption, such as energy, water, or fuel.
For instance, a major shipping and logistics company, in an attempt to become more sustainable and cut its annual electricity bill by nearly one-half—a savings of about $40,000 per year—invested in an elaborate solar panel installation at its approximately 38,000-square-foot warehouse in Loyang, Singapore. The elaborate photovoltaic grid system converts sunlight into alternating current electricity to help power daytime operations at the facility. The entire project cost about $200,000, with an expected six-year payback period, and took more than 14 weeks to complete. The solar system will require nominal maintenance and should last about 25 years.
Of course, this is an excellent step in helping this facility become more sustainable, reduce its own energy consumption, and eventually reduce its operating costs once the system is paid for, and it will also help Singapore reduce the amount of nonrenewable energy it must purchase. Currently, 80 percent of Singapore’s energy needs come through gas pipelines from nearby countries, with the rest coming mostly from oil.
However, and quite possibly, this company could have taken a number of steps with little or a small initial investment to reduce consumption of not only electricity but also fuel, water, and other metrics, saving the $200,000 it spent on the solar panels and still producing significant annual savings that can last for years to come. Further, these steps would not be limited to depending on sunlight to deliver cost savings. These steps would allow the warehouse to reduce consumption and its related costs during all hours of operation, day and night.
ISSA, the worldwide cleaning association, is helping janitorial distributors do just this, and many are finding that just by improving efficiencies* related to consumption and reducing waste, they can cut their operating costs significantly and be more profitable. The program ISSA has created is called the Distributor Efficiency Analytics and Learning Program, more commonly referred to as the DEAL program.
The DEAL Program and Savings
Before going into further details about the DEAL program, we should mention that ISSA is a not-for-profit organization and no part of its revenues or earnings are to benefit or promote any member or group. Essentially, what ISSA and similar organizations are doing is providing tools for their members in order to help them become more profitable, reduce overhead, remain competitive, and, as in this case, address sustainability concerns, which will likely impact all members and other organizations in the years to come.
ISSA believes that members adopting the DEAL program can save a combined estimated $40 million annually, a savings that could translate into increasing sales by an estimated $400 million annually based on the profits and expenses of typical ISSA members. It all comes down to the math:
- The association has approximately 2,400 distributor members.
- These distributor members have approximately 5,000 warehouses and offices.
- The sizes of these facilities range from 10,000 square feet to 100,000 square feet.
- The square foot operating costs of these warehouses and offices run approximately $2.50 per square foot, which amounts to $25,000 to $250,000 annually.
- According to performance data compiled by the U.S. Environmental Protection Agency (EPA), facilities such as these can reduce operating costs from 10 percent to more than 30 percent when sustainability initiatives are implemented.
- This reflects a potential savings for a 10,000-square-foot warehouse of $2,500 to $7,500 annually; for a 100,000-square-foot facility, the savings could be as high as $75,000 annually.
In addition, it is estimated that ISSA distributor members have approximately 25,000 work-related vehicles. Because one of the goals of the DEAL program is to reduce the fuel consumption of these vehicles, not only will there be cost savings, but the reduction in greenhouse gases can be significant as well.
The DEAL Program at Work
According to ISSA, the DEAL program consists of three key elements: education, benchmarking, and an awards program to recognize distributor members that have made significant improvements.
Education: ISSA provides each member involved with the program access to a data portal, which is an online dashboard system that can be used on any computer. The data portal provides instruction on low- and no-cost improvements that warehouse operators can make to help implement sustainability initiatives that lower operating costs. It is also recommended that warehouse operators form a program team, who will be trained on how to use the portal along with the steps necessary to implement the program.
Benchmarking: The next and one of the most important steps is benchmarking. This provides the warehouse operators with two types of information: data regarding past consumption and data showing current consumption. Both pieces of information are essential to the success of this program. The data portal keeps track of this information along with integrating information provided by ENERGY STAR® and SmartWay®. ENERGY STAR helps organizations select products that use energy more efficiently, reducing consumption, and SmartWay is designed to assist organizations that deliver freight in using new procedures and technologies that reduce fuel consumption for their trucks. Both programs are designed to reduce consumption by 10 percent to 30 percent, along with related greenhouse gases.
Awards: While there is nothing scientific about honoring people or organizations, appreciation confirms that someone’s work is valuable and typically results in inspiring others to work even harder to be recognized and honored. This is why the DEAL program has included this component. It distinguishes those distributor members that have been able to reduce consumption, become more sustainability focused, and reduce operating costs. In fact, the organization believes that this actually may be the most important component of the program and a reason the DEAL program will be adopted by more ISSA members.
It was not that many years ago that pursuing sustainability within an organization meant spending money to get results, just as the Singapore warehouse we discussed earlier did. However, and quite fortunately, we are finding sustainability is possible at little or no cost and can still result in considerable cost savings for an organization. We could say that this is the best DEAL yet.
Stephen P. Ashkin is president of The Ashkin Group, and the professional cleaning industry’s leading advocate for promoting sustainability. He is also CEO of Sustainability Dashboard Tools, which offers a cloud-based dashboard that allows organizations to measure, report and improve their sustainability efforts. He is the coauthor of both The Business of Green Cleaning and Green Cleaning for Dummies
*The term “efficiency” is often misunderstood when it comes to the consumption of natural resources. It is not the same as “conservation.” For instance, water conservation refers to reducing water consumption during a temporary drought, while water efficiency refers to reducing water consumption in the long-term, no matter if water is plentiful or if there is a water shortage.