Retail Distribution Centre

Background

The client is a large retail group and operates a few distribution centres (DC) throughout the country which serve a large quantity of retail outlets. Due to confidentiality purposes the name of the client cannot be revealed.

The client is in the process of transitioning the supply chain and wanted to use this opportunity to review what has historically worked well and to ensure the principles related to this are incorporated in the future solution to maximize the investment made in systems and infrastructure.

The Issue

The refrigeration facility at the DC forms a major part of the cold chain and can be very costly if not managed efficiently.  The cost of electricity as an energy source is the biggest input cost for maintaining the cold chain.  More efficient use of electricity will also reduce the carbon footprint of the cold chain.  The purpose was to conduct an energy audit to test the energy efficiency of the refrigeration equipment to provide an adequate cold storage environment.

Energy Audit Methodology

The energy audit was done by recording and analysing the energy consumption and product throughput during the sample period over 12 months.  The space utilization and energy consumption were measured in terms of product throughput and benchmarked against similar South African cold storage facilities.

In this assessment the energy consumption was measured and then compared to the benefit obtained by that electricity consumed.  This benefit was measured in the amount of electricity used to cool a unit volume (in cubic meters) and also the amount of product that received this benefit in the cold chain.  The business purpose of a retailer is to sell product to customers, the cold chain is there to prolong the quality of perishables, and therefore it just make sense to analyse the energy efficiency in comparison with the product throughput.

Data in the form of electricity consumed at the DC was collected by energy consumption meters fitted at appropriate positions on the distribution boards. The data collected by the latter was then converted into KWh. The unit of measure of kWh/m² (kWh per square meter floor area) is an acceptable measure for office space and general store areas.  The measurement of refrigeration energy efficiency requires that the measure be adapted to kWh/m³ (kWh per cubic meter cooling space) for the volume of space to be cooled, e.g. the cold rooms and cabinets.  A more refined measure is the amount of kWh electricity used per ton of product kept under cooling per day (kWh/ton-day).  The latter two measurements were used in this cold chain assessment to determine the energy efficiency of the DC  by benchmarking these values against other similar refrigeration facilities in South Africa.

Major Findings

The facility used in the order of 4.8m kWh electricity per year at a cost of R2.85m in 2012. The electricity consumption for the non-refrigeration portion is 66% of the total.  This is very high compared to other similar facilities and should be investigated further (outside the scope of the client request).

  1. The benchmarking results show that the DC is buying electricity at a very low unit cost.
  2. The refrigeration equipment is very efficient and well maintained.
  3. The refrigeration plant has the capacity for the current levels of product throughput.
  4. The cold storage space utilization is very low and result in wasted cold volume.
  5. The average temperature in the cold stores was higher than the specified maximum.
  6. The temperature analysis has shown hotter temperatures at the cold room doors which is an indication of heat ingress through the doors leading to energy waste.

Proposed Action Plan

Action 1: Decrease the refrigeration setting to bring the temperature in specification.

(This will increase the energy consumption but need to be done to maintain product quality. The DC cold stores temperature were too high while they have more than enough refrigeration capacity.)

Action 2:  Improve the utilization of the cold stores by increasing the product throughput or reducing the cold room size.

(The latter option would require capital spend for partitioning – costing handled by DC)

Action 3:  Improve the door seals to prevent heat ingress at doors.

(Capital required:  R50 000)

The table below shows that electricity savings of up to 62% is possible when operations are benchmarked against other similar cold storage facilities. This can be achieved by better utilization of cold storage space and the alterations to reduce heat ingress through the doors.

rdc table

Actions taken by DC:

  1. The operating personnel responsible for cold store temperature were trained in the correct procedures for temperature setting and management control was introduced to assure that the product is stored within specified temperature regimes. This was done on the first day after receiving the audit findings.
  2. The utilization of cold storage space will be handled in the bigger supply chain project and the outcome is still unknown.
  3. The door seals have been repaired and the client has requested a repeat of the temperature analysis at the same period next year to test temperature ingress.