A peek inside Wal-Mart Canada's "green" distribution center

Wal-Mart Stores Inc. has opened a distribution center in Western Canada that is not only expected to reap $4.8 million in energy cost savings through 2015, but will also become the model for the company's future warehouse and DC design and development, according to one of the company's top supply chain executives.

Wal-Mart Canada in November 2010 opened a 400,000-square-foot fresh and frozen food warehouse in Balzac, Alberta, to serve about 100 retail outlets in Western Canada. The facility is piloting the use of alternative energy sources like solar and wind power and lift trucks that run on hydrogen fuel cells, according to Andy Ellis, senior vice president of supply chain and logistics for Wal-Mart Canada.

The warehouse generates electricity from a combination of on-site wind turbine generators and roof solar panels, Ellis told attendees at the Supply Chain and Logistics Summit North America 2011, held recently in Dallas, Texas. The refrigerated building uses low-energy, solid-state light-emitting diode (LED) lights, an advantage for the retailer because solid-state illumination keeps the facility cooler than does traditional incandescent lighting, Ellis said. Even though LED lights cost an additional $486,000, Ellis said, Wal-Mart expects $129,000 in annual savings from that lighting approach.

Wal-Mart has custom-designed special dock doors to minimize the loss of cool air from the refrigerated warehouse, Ellis said, adding that the company monitors cooling loss from the dock doors daily with the use of thermal imaging cameras. Electronic monitoring ensures that dock doors are not opened unnecessarily, he said.

The facility is also using hydrogen fuel cells to power its fleet of lift trucks and material handling equipment. The hydrogen-powered vehicles cost Wal-Mart $693,000 more than conventional vehicles, Ellis said. However, the new equipment is expected to generate nearly $269,000 a year in operational savings, he added.

Lift trucks powered by hydrogen fuel cells are considered more efficient because they don't have to be taken out of service for battery replacement and recharging. Warehouse workers can refuel a hydrogen fuel cell vehicle as it moves around the warehouse in as little as two minutes.

"There's a productivity savings where the truck is operating more efficiently," said Ellis.

Ellis said Wal-Mart decided to focus its warehouse development efforts on energy and waste reduction, and to promote a workforce culture that engages employees in supporting its green efforts.