Distributors that are on the path to sustainability are realizing a long list of benefits that come from operating as a good corporate citizen in their communities.
An overall lift in environmental awareness on the part of consumers is pushing organizations to think and act more sustainably. Whether they’re utilizing energy-efficient fixtures in their warehouses, helping to eradicate empty transportation miles, or donating unused inventory to nonprofit organizations, distribution companies are in a prime position to lessen their carbon footprints.
Subject to individual interpretation, sustainability roughly represents the ability to sustain something at a certain level for as long as possible to not deplete the world’s natural resources and effectively maintain ecological balance. For distributors, the concept can come down to a simple charge: thinking and acting like good corporate citizens.
As president of The Ashkin Group in Channel Islands Harbor, California, Stephen Ashkin helps organizations implement effective sustainability programs. He’s worked with a number of distributors and says most are laggards on the sustainability curve. That’s mainly because they’re narrowly focused on serving their customers. “This creates a culture whereby customers make a demand and the distributor delivers,” says Ashkin.
Because of this dynamic, sustainability initiatives can fall by the wayside in favor of more important, customer-centric projects. This opens the door for the distributor that puts time and effort into sustainability, and that joins the roughly 93% of S&P 500 firms that are making strides in this area (up from just 20% in 2016). “Those corporations understand that some of the environmental impacts are happening in their supply chains,” says Ashkin. “Inevitably, they’re going to start requiring more sustainability efforts on the part of their distributors; it’s just going to happen.”
Reducing Carbon Footprint, One Step at a Time
Like many other industrial companies, Curbell Plastics, Inc., a Western New York-based distributor and fabricator of performance plastics, used to send all of its operational waste to the landfill. According to Mark Shriver, director of safety and environmental affairs, the company was using processes it had relied on without really considering where the waste would wind up or what would happen to it.
That changed in 2006, when Curbell’s owner and chairman set the company on a course toward becoming a sustainable business. As a second-generation owner, he wanted Curbell to be around for the long haul and recognized the value of sustainable best practices in supporting this effort.
Shriver says solid waste was of particular concern. The company’s two largest facilities in Orchard Park, New York, were sending multiple 8-yard dumpsters of refuse per week to the landfill — as many as 10. “After our initial assessments, we identified what we were tossing out, found recyclers, and began to separate product on the production floor,” he says. “We also found ways to repurpose some of our waste and started taking that remaining dumpster to a waste-to-energy incineration facility.”
The results were lower costs, a monetary return for what once was garbage, an improved brand image and “zero landfill” status. “We started donating soda cans to St. Mary’s School for the Deaf, and we worked with Habitat for Humanity, Goodwill Industries, The Teacher’s Desk and other groups to repurpose anything that we couldn’t use anymore,” says Shriver. “Everything gets repurposed.”
The company also solicits employee suggestions that have helped Curbell reduce waste on several fronts, including the phasing out of individually-wrapped parts in plastic bags. Working with its supplier, the distributor removed bags from the process. The results were less waste, reduced labor (because employees no longer had to remove the part from the bag), and lower costs for its supplier. “We’ve since reduced by 10,000 the number of plastic bags used in our operations,” says Shriver.
Within its four walls, Curbell utilizes 100% LED lighting, updated HVAC equipment, water-efficient fixtures and building management systems. Comprised of employees across all of its departments, Curbell’s “Green Team” is charged with soliciting new ideas, coming up with its own ideas, and then testing out new initiatives that will move the sustainability needle.
These and other efforts have helped Curbell to develop facilities and operations across the country with award-winning programs that focus on the reduction of waste and costs, and diversion of waste to the landfill. “We absolutely do our best and often go beyond,” says Shriver, who sees business sustainability as one of Curbell’s core values.
Those roots run deep. The company’s owner resides in one of the first LEED-certified homes in Western New York, drives an electric car and strives to make Curbell the go-to company for employees who want to work for a company that has a purpose.
This mission plays out well in today’s labor market, where younger workers care about working for companies that are having a positive impact on their communities and the world. The mission also serves as a differentiator for Curbell during key account negotiations, where customers want to know that the companies they’re working with have an eye on sustainability.
Being in the plastics industry, Curbell works to make sure those customers understand its strong commitment to good corporate citizenship, and the fact that its products aren’t being unceremoniously thrown into the ocean.
“As a performance plastics company, we can differentiate ourselves from the single-use market,” says Shriver, “because we look at our products from cradle-to-cradle.”
“It all comes down to environmental responsibility and smart management of finite resources,” Shriver adds. “Plus, we’re all living, working and playing in these communities where we do business, so why pollute them? We want to be the best that we can be, not only for our business, but also for our employees and for the communities where we operate.”
Creating a Sustainable Warehouse
A central hub for most distributors, the warehouse is a great place to start sowing the seeds of good corporate citizenship. President of the National Association for the Exchange of Industrial Resources (NAEIR) Gary C. Smith says an effective starting point is to look at sustainability as “doing well be doing good.” For industrial companies, this could be as easy as donating excess, unused inventory of gloves to a local homeless shelter, instead of just letting them gather dust on the warehouse shelves.
In exchange, companies not only get to feel good for helping others, but they also get a tax write-off, a reputation for supporting the communities where they operate, and a higher profile for eco-minded workers who look beyond salary when selecting their employers.
“If the product is destined for the landfill, it’s better to donate than dump,” says Smith, whose organization has received donations of excess inventory from more than 8,000 U.S. corporations and redistributed more than $3 billion in products to more than 110,000 nonprofits.
Focused on in-kind giving, NAEIR helps companies offload overstocks, discontinued products and returns. “Every square foot of wasted warehouse space costs distributors money, every day,” Smith points out. “And, the real cost of holding onto stale inventory exceeds its cost value. Each time they donate outdated stock, distributors free up valuable warehouse space for more profitable products.”
Smith sees this is as a win-win for distributors that are trying to find a way to manage excess inventory while also making a positive impact on their communities. A distributor that winds up with extra cans of paint from a job that never happened can make an in-kind gift to Habitat for Humanity, for example, or offer it to a rescue mission that wants to spruce up its reception area.
To distributors that are tired of looking at, counting and making room for excess inventory that may never sell, Smith says the best first step is to start identifying the items and matching them up with groups that could use the goods, or with organizations like NAEIR. “You have to start somewhere,” says Smith. “It’s not just going to go away on its own.”
Eradicating Empty Miles
An important part of any distributor’s supply chain, transportation’s carbon footprint is well documented. According to the EPA, greenhouse gas (GHG) emissions from transportation account for about 29% of total U.S. greenhouse gas emissions, making it the largest contributor of U.S. GHG emissions. The problem is mounting. Between 1990 and 2017, the EPA reports, GHG emissions in the transportation sector increased more in absolute terms than any other sector.
Credit the rise of e-commerce with helping to drive up those numbers. After all, smaller, more frequent orders require more packaging and more frequent deliveries, both of which increase the risk of waste. With the goal of helping to reduce the negative environmental impacts of transportation, CHEP’s parent company Brambles this year launched Zero Waste World.
The initiative centers on cutting out inefficiencies in the supply chain, where CHEP, a pallet manufacturer, is working to reduce empty transport miles. One of its core focuses is matching up companies that might otherwise be competitors to share delivery trucks, thus streamlining delivery routes and reducing waste. CHEP is also examining its own material consumption (for the manufacture of its pallets, crates and containers) and coming up with new sustainable sourcing strategies.
George Brehovsky, CHEP’s director of customer solutions, says the company sourced 99.7% of its materials sustainably during its 2019 fiscal year. To help its customers — including wholesale distributors — achieve their own sustainability goals, the company works to ensure that its pallets, crates and containers are being driven by what Brehovsky calls “the minimal efficient distance.” To make that happen, CHEP runs network optimization scenarios for key markets, and then repositions transportation capacity to best leverage those scenarios.
Here’s how it works: with large manufacturing bases in the Midwest, and states like California being high on the consumption scale, CHEP’s empty pallets, crates and containers wind up in California, ready to be repositioned. Concurrently, its customers must reposition their vehicles back to the Midwest to be refilled. CHEP connects those dots and partners with those companies to help eradicate the empty miles — to the tune of about 43 million total miles during its last fiscal year.
Brehovsky sees real opportunity for industrial distributors to implement similar programs, and to help close the loop on empty transportation miles. He sees reusable transit packaging as another good opportunity for distributors to operate more sustainably, but says that ultimately making a difference requires good coordination across supply chain partners. “It’s hard work,” says Brehovsky, “and it really has to move outside of your four walls and out to your partners and customers.”
The effort will be worthwhile, according to Ashkin. Rewards include operational cost savings and improved branding to higher levels of employee engagement, as well as state, federal and international regulation compliance; the opportunity to cash in on rebate programs (i.e., solar, electric vehicles, etc.); and improved operational efficiencies.
Saving Money, Engaging Employees
Ashkin points to fleet fuel savings and lower facility energy consumption as two of the biggest “wins” for distributors that put time and effort into sustainability programs. “Fuel consumption is a huge expense for any distributor,” he says, noting the various transportation routing, scheduling and optimization programs on the market today to be good starting points on the road to better sustainability.
In a country where the average warehouse is 34 years old, according to CBRE, and where roughly 1 billion square feet of distribution space is more than 50 years old, even small improvements within the walls can add up to substantial savings. “When companies find new ways to reduce energy consumption for heating, cooling and lighting in their warehouses and distribution centers,” says Ashkin, “those savings fall right to their bottom lines.”
To really hit a homerun with sustainability, Ashkin tells distributors to build it into their cultures. Get everyone onboard, solicit their ideas, do like Curbell did and form a “Green Team,” and reward team members for their contributions.
“From a sales and marketing perspective, sustainability shows leadership and alignment with values that many customers already have,” says Ashkin, “and that they’ll be emphasizing even more in the future.”
Materially changing market conditions caused by the COVID-19 pandemic have impacted the companys previously announced…
Smartrac is a leading innovator in the development and manufacture of RFID inlays.
The transaction was completed in a single closing and resulting in cash proceeds to Hillenbrand…