Sustainability and the green supply chain: Crescent/Stonco and energy efficiency

image
By Bob Trebilcock, Executive Editor
July 12, 2010 - MMH Editorial

After covering the materials handling industry for about 25 years, the most exciting developments to me have been the convergence of other disciplines with our industry. First there was automatic data collection, with barcode scanning, voice and now RFID. That was followed by an increased emphasis on software-based solutions and now web-based solutions. And over the last year, I’ve begun to see the convergence of what we do in the DC with broader corporate initiatives, including sustainability, or green supply chain. At NA this year, there were solar panel and energy efficient lighting displays tucked in between the lift trucks and conveyors. 

Crescent/Stonco, a provider of industrial lighting solutions, is tapping into that convergence with something the company calls the Stonco Warehouse Energy Program. “We’re finding there are a number of DC owners that want to reduce their total energy consumption or manage the total energy in their facility,’ says Bill McShane, director of sales. That’s because lighting and heating can account for up to 70% of the electricity use in a facility, according to McShane. The challenge is that DC managers are in the business of moving materials, not turning down the thermostat or flipping off light switches, so to speak. What’s more, capital budgets are frozen: Brother, can you spare a Cap Ex dime could be the mantra at most companies. 

That’s where the Stonco program comes into play. The company and its partners will redesign your heating and lighting systems and lease them back to you through a banking partner with money to lend. There’s a unique concept. Think of it as a 3PL for energy management. The goal is to reduce energy consumption by as much as 50% by installing new energy efficient lighting and HVAC systems; earn a one-time Federal tax deduction (and possibly state and local deductions as well) of from $1.20 to $1.80 per square foot as a result of the Energy Policy Act of 2005 – a program that has been extended until 2013; and finance 100% of the project through a banking partner.

Here’s how it works: The program is an alliance of four partners: Stonco Lighting provides the lighting, Cambridge Heating provides the HVAC, De Lage Landen the financing and Energy Tax Savers, a green tax firm, helps participants achieve Federal tax incentives aimed at making energy efficient investments as economically viable as possible.

“There are no upfront fees and the total payment for utilities and because we design specifc lighting products to go into these facilities, you get a system that’s designed properly for optimization,” says McShane. “If we can reduce your utilities by 50%, the lease payment and your utilities bills will be less than they’re paying now just for the lighting and heating.”

Those systems include not just the light fixtures and bulbs or the heating unit, but sensors and controls to only illuminate or heat and cool sections of the warehouse when there is activity. Lease terms can last from 12 to 60 months, and at the end of the lease, the warehouse owns the system.

Why now? For the same reason that many companies are leasing their lift trucks, outsourcing their distribution to third party logistics providers and even contemplating the leasing of automated materials handling systems. “If capital budgets are frozen, there’s no way to upgrade a DC,” says McShane. “Through a lease, you can improve your building, tout your green bonafides and do it without dipping into capital reserves.”

McShane adds: “People are looking for the catch, and there isn’t one. We can quantify the savings.”



About the Author

Bob Trebilcock
Executive Editor

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. More recently, Trebilcock became editorial director of Supply Chain Management Review. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Even though China’s costs have risen and the U.S. has now surpassed Mexico as the preferred locale for relocating offshored manufacturing, advantages can be fleeting and the challenges great

Memphis-based FedEx reported solid fiscal second quarter earnings results today. Quarterly net income of $616 million was up 23 percent annually, and revenue, at $11.9 billion, was up 5 percent. Operating income at $1.01 billion was up 22 percent.

UPS said this week that it has added significant space to some of its North America-based distribution facilities, which the company increases the total size of its supply chain solutions network size by roughly 1.2 million square-feet. The company’s total global supply chain solutions network is comprised of 596 facilities and about 32.8 million square-feet. UPS offers various services at these facilities, including: warehousing and fulfillment inventory, transportation and returns management; custom kitting and packaging; and store-ready displays.

A week ago, the average price per gallon of diesel gasoline saw its steepest decline in more than two years, when it fell 7 cents to $3.535. This week took that decline a step further, with the Department of Energy’s Energy Information Administration (EIA) reporting that the average price this week fell 11.6 cents to $3.419 per gallon.

With an eye on further expansion of its e-commerce business and related reverse logistics processes, transportation and logistics bellwether FedEx last night announced it has inked an agreement to acquire Pittsburgh-based GENCO, a third-party logistics (3PL) services provider specializing in product lifecycle and reverse logistics.

About the Author

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. Contact Bob Trebilcock.

Comments

Post a comment
Commenting is not available in this channel entry.