Recent studies have shown that among the challenges frustrating warehouse and distribution centre managers this year, rising energy is one of the most often cited.
Of course, there is no quick and easy way to curb increases in the cost of energy, but now is an excellent time to start thinking about practical ways to reduce energy usage across your business..
We hope the tips and ideas in this article will help you make inroads into warehouse energy labour cost reduction. Some you will find reasonably affordable and fast to implement, while others require significant investment and planning, but if nothing else, they should provide you with some food for thought.
By taking steps to reduce your warehouse energy costs, you can enjoy the added benefit of improving the sustainability of your business, which, as we mentioned in our previous blog post on the topic of distribution network design, can, in turn, help you to raise your CSR profile and contribute to a better future for our planet.
However, in this article, we’ll focus exclusively on the cost factor, drawing your attention to some questions you might ask yourself (and your team) about your facility’s energy usage.
It’s a good idea to begin by gathering knowledge about the areas of high energy consumption in your warehouse or distribution centre. You’ll find no better way to gain that knowledge than with an energy audit to highlight where you can benefit from improvements.
But don’t worry too much if that’s not practical for your enterprise. You can always move straight on to consider the following questions, targeting factors that typically impact warehouse energy costs.
Does your company use incandescent, halogen, or HID lighting in its warehouses? If so, you’re missing out on substantial energy savings from more energy-efficient options such as LED or induction lights.
Of course, switching to more efficient lighting requires significant investment, especially if you choose induction lights, which are particularly expensive to procure.
However, the payback can be substantial because LED and induction lights offer significant energy consumption reductions and last much longer than their outdated alternatives. LED warehouse lights can last up to 50,000 hours (about 5 and a half years), with induction lights often effective for twice that duration.
While reviewing the energy use of lighting in your warehouse, consider whether there are ways to reduce energy consumption through better lighting control. That can be a much faster method of reducing lighting costs than changing the type of lighting used and will require less investment to put into effect. It also offers benefits regardless of whether you are already using energy-efficient light sources.
It’s common for warehouse spaces to sit under artificial lighting even when or where it’s not strictly necessary. There are several possible ways to eliminate this form of energy wastage.
One of the most effective approaches is to install motion sensors and timers for areas of the warehouse not in continuous use, ensuring that energy is only used for lighting when required.
Another option, which might cost slightly more to implement and may only be viable to a limited degree, is to add skylights to increase the amount of natural light entering the warehouse and perhaps to seek changes in the warehouse layout that could similarly allow more daylight into the facility.
Again, before writing such measures off as too expensive, it’s worth considering how much they can reduce the requirement for artificial lighting because once these changes are made, they will return on your investment for the entire remaining life of the warehouse, which could be a long time, and equate to substantial savings.
When you evaluate the warehouse layout from a lighting perspective, it’s worth looking at every aspect of the layout, including the efficiency of racking and shelving.
For example, could some areas of your warehouse be adapted via racking optimisation to store higher inventory volumes? If so, other areas might house less inventory (perhaps slow-moving SKUs only) or be assigned as bulk storage, requiring less use of artificial light and other costly energy resources.
Here at Logistics Bureau, we’ve been helping warehouse operators with layout optimisation for decades. We’d be pleased to work alongside your team or appointed energy consulting partner to determine changes in your layout for maximum operational and energy efficiency.
For your heating, air conditioning, and ventilation systems to operate at maximum efficiency, it’s vital to have all equipment maintained according to the manufacturers’ recommended regimens, and to adhere to their service schedules.
If you’re not confident that this is the case or are taking over a warehouse with used HVAC equipment, it’s a good idea to talk to the manufacturers or vendors of those systems to have the equipment assessed.
It may be sufficient to have everything serviced and then adhere to recommended schedules from that point on. In some cases, though, replacing the older equipment with more modern, energy-efficient alternatives could prove more economical.
HVAC manufacturers have made great strides in efficiency in recent years, so installation of the most up-to-date equipment might offer a path to substantial reductions in energy consumption.
You should also look into the zoning of heat and air conditioning solutions if these features are absent from your existing systems. As with warehouse lighting, it’s much more efficient to heat or cool only the areas that need it, according to occupancy or temperature requirements, than to try and control the temperature at one level throughout the facility.
Regardless of how effective and efficient your warehouse heating and cooling systems may be, adequate insulation is necessary. Otherwise, you will consume excessive energy in keeping the internal temperature comfortable for your staff and perhaps essential for your products’ preservation.
With proper insulation, the warmth generated by your heating equipment and the coolness provided by air-con units is contained effectively within the confines of the warehouse.
In short, insulating your warehouse will inhibit the effects of external temperature variations and trap the warm or cool air generated by your HVAC equipment. That means those systems will run—and consume fuel—for fewer daily hours to maintain the internal temperatures you require.
Since even the latest types of heating and cooling units are costly to run, especially on an industrial scale, the savings gained from an insulated building should be considerable.
Even if your warehouse has been insulated, it’s worth checking what insulation material is in place. If the facility is insulated with fibreglass or mineral wool sheets, replacing that with more effective loose fill or even spray foam insulation could be another investment with a worthwhile payback.
Thus far, we have discussed warehouse energy cost reduction from the perspective of the warehouse environment, including the lighting, heating, and air conditioning systems. But what about the MHE and other equipment that plays a vital operational role in the warehouse?
Forklifts, conveyors, pallet trucks, packaging machinery, and other powered equipment consume energy, drawing either on the warehouse electricity supply or on some form of fuel that your company must purchase at ever-increasing prices.
Therefore, in assessing your options for energy cost reduction, it makes sense to look at all your warehouse equipment to establish if it provides the maximum energy efficiency. If not, the next step is to determine the feasibility of investing in new equipment that consumes less energy and evaluate the various options that might be available.
If you already operate with energy-efficient equipment, don’t underestimate the importance of regular servicing and preventative maintenance to ensure that efficiency does not degrade over time.
Energy efficiency in the warehouse is influenced not only by the equipment and systems in use but also by the people who control and use them. A staff training program centred on energy-consciousness can help minimise costs.
Such a program can be simple and inexpensive to implement. It need only be sufficient to educate your workforce in basic energy-saving practices like turning off lights and equipment when not in use and reporting any issues that might be a source of excess energy consumption.
It’s often surprising what initiatives can arise from a healthy session of warehouse team brainstorming. After working through the questions we’ve recommended thus far in this article, it’s a great idea to seek your team’s opinions regarding any other practical measures that might reduce energy consumption.
From low-budget fixes such as the simple use of white paint wherever possible to increase natural light levels and removing a bulb or two from every multi-bulb lighting fixture, to more sophisticated measures like installing wind turbines and solar panels or implementing sophisticated energy management systems—in our work with clients, we’ve heard many great ideas generated (and adopted) as a result of team brainstorming.
Lastly, remember to investigate any possibilities offered by government organisations or energy suppliers, such as grants or incentive programs to help reduce the cost of energy-saving warehouse upgrades.