Executive Briefings

How Walgreens Slashed Energy Costs in Its Supply Chain

Nick Finia, senior manager of energy management and infrastructure capital investment at The Walgreen Co., describes the company's aggressive efforts to achieve energy cost savings in its supply chain.

Walgreens' efforts to cut energy costs began with a search for "low-hanging fruit," says Finia. The company examined the age and condition of its equipment and buildings, as well as utility rates around the country. The goal was to identify those areas that were ripest for capital investment.

Technology also must be added to the mix, in order to proceed with an in-depth energy audit. Both internal and external resources can be deployed to look at a given facility as a whole. The result is a comprehensive report that allows the company to highlight and prioritize opportunities for further savings.

Finia has been involved in the effort for at least three years, traveling to multiple distribution centers in the system. His experience as an energy-management engineer has allowed him to identify the opportunities for savings, then lay out a series of steps to achieve specific goals.

Walgreens uses multiple resources, including industry best practices for energy cost per kilowatt hour and square foot. Various buildings in the company’s network compete with one another to achieve the best results toward lowering energy usage.

It’s important to ensure that cost savings are sustainable over time, Finia says. Once a lighting system is replaced, or air conditioning upgraded, they need to be monitored on an ongoing basis. Often there aren’t enough internal resources to perform that task, so the company turns to outside contractors or consultants. They can offer valuable advice as to what needs to be done in order to spur further capital investment in new systems.

It’s not always easy to obtain the necessary capital for a given project. Finia says various initiatives compete on the basis of their projected return on investment. “Because our system is more focused on throughput through our D.C.s, it becomes challenging for someone like myself to make a business case,” he says.

To view the video in its entirety, click here

Walgreens' efforts to cut energy costs began with a search for "low-hanging fruit," says Finia. The company examined the age and condition of its equipment and buildings, as well as utility rates around the country. The goal was to identify those areas that were ripest for capital investment.

Technology also must be added to the mix, in order to proceed with an in-depth energy audit. Both internal and external resources can be deployed to look at a given facility as a whole. The result is a comprehensive report that allows the company to highlight and prioritize opportunities for further savings.

Finia has been involved in the effort for at least three years, traveling to multiple distribution centers in the system. His experience as an energy-management engineer has allowed him to identify the opportunities for savings, then lay out a series of steps to achieve specific goals.

Walgreens uses multiple resources, including industry best practices for energy cost per kilowatt hour and square foot. Various buildings in the company’s network compete with one another to achieve the best results toward lowering energy usage.

It’s important to ensure that cost savings are sustainable over time, Finia says. Once a lighting system is replaced, or air conditioning upgraded, they need to be monitored on an ongoing basis. Often there aren’t enough internal resources to perform that task, so the company turns to outside contractors or consultants. They can offer valuable advice as to what needs to be done in order to spur further capital investment in new systems.

It’s not always easy to obtain the necessary capital for a given project. Finia says various initiatives compete on the basis of their projected return on investment. “Because our system is more focused on throughput through our D.C.s, it becomes challenging for someone like myself to make a business case,” he says.

To view the video in its entirety, click here