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Sustainable Distribution Logistics

Author(s):

Joe Steffney
Joe Steffney is senior vice president, global distribution for Cengage Learning in Independence, Kentucky.

Rich Eby
Rich Eby is vice president of distribution and engineering for Cengage Learning in Independence, Kentucky.

March 2012, Inside Supply Management^® Vol. 23, No. 2, page 32

Sustainability: Responsible Supply Management
An educational materials distributor uses green shipping materials and technology to eliminate paperwork and keep its global locations on the same, green page.

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When it comes to educating young people and professionals, Cengage Learning's commitment to innovation goes beyond product development to helping the environment and increasing the efficiency of the company's supply chain.

Based in Stamford, Connecticut, Cengage Learning delivers both print and digital educational materials to academic and professional markets around the world. As the United States' second-largest higher education textbook company with annual revenues of approximately US$2 billion, Cengage has 5,500 employees in more than 20 countries. Through our largest distribution center in Independence, Kentucky, we move approximately 63 million units (with each book being one unit, handled individually or packaged with others during shipment) around the globe each year — which could produce a significant carbon footprint. To minimize our impact on the environment, however, we have implemented a variety of sustainability initiatives.

Cengage purchases educational materials from all over the world. These materials arrive at the 835,000-square-foot facility in Kentucky from around the United States and from countries such as China, Mexico, and Singapore. Suppliers are chosen based on their production costs, quality and the most efficient way to print and ship materials to our distribution facility. The majority of products are shipped from Independence to domestic locations, because the U.S. is Cengage's largest market, but many materials are also distributed to the other satellite distribution centers around the world.

We have made strides toward making this process more environmentally friendly, from simple measures such as installing energy-efficient light bulbs in our facilities, to adding sophisticated, high-tech systems, to eliminating paperwork throughout the distribution process.

The Impact of Efficient, Recycled Packaging

As a distributor, packaging is one of the most significant components of Cengage's business. Our facilities now use 100 percent recycled paper inside cartons, rather than older fill-and-seal material. We continue to work with our suppliers to encourage them to use recycled packaging wherever possible. Of course, educational materials sent from outside the U.S. present a challenge, because different materials are standard in various regions of the world.

At our facilities, incoming shipments are broken down and repackaged into 100 percent recycled cartons, a move that has earned positive feedback from customers. Although Cengage hasn't advertised its green initiatives, our customer service group frequently receives affirmative comments from customers who notice when products arrive in recycled packages or with less packing material inside the carton.

Because Cengage uses a large amount of corrugated cardboard in our Kentucky location, dedicated conveyor belts on the main working floor carry used cardboard and other recyclable trash generated through repackaging to a central area. This system makes recycling easy and almost automatic. The savings generated from recycling these materials actually pay for all other trash removal at the Kentucky facility.

All of these initiatives are currently running at the Kentucky distribution hub, and Cengage is actively expanding these efforts to our other sites worldwide. One of the most powerful ways to share green efficiencies around the globe is to use a centralized inventory system. To that end, Cengage has implemented a warehouse management system (WMS), which has been installed in our Andover, Kentucky, Mexico City and Toronto centers; Brazil is next on the list. This digital system ensures Cengage's entire inventory is accessible in one place, enabling the company to ship orders from one location to another while considering the most fuel-efficient and cost-effective method of delivery.

High-Tech Solutions Make an Impact

With approximately 8.5 miles of conveyor belts and three shifts of employees using them in the Kentucky facility, the plant consumes a serious amount of energy to keep things moving — but much less energy than in the past. To reduce energy use, the conveyors are connected via a central computer operated by a photo eye. When the facility experiences timeouts or periods without an active workload, the computer senses this and shuts down the conveyor. This system has eliminated the need to have a person manually shut down the conveyor system. While the use fluctuates throughout the year, the average annual savings in energy and dollars have approached 20 percent.

Technology has also enabled the most efficient packing of products. Another feature of the WMS is a computerized system known informally as "cube optics" that takes measurements of the products and configures the least amount of paper and the tightest carton possible to package each product. The goal is to minimize costs and reduce wasted space, which lessens the use of paper and corrugation. For example, if a customer orders two textbooks, we will automatically use a carton that is as close as possible in size to those two textbooks, with the least amount of packaging fill needed to protect the textbooks during shipping. In addition to being a strategic inventory system, the WMS also stores the physical dimensions and weight of every title, and ensures that we build the most compact, efficient shipments possible.

Cengage has eliminated paperwork in its Kentucky facility by using voice-directed operations to assist employees throughout their day. Inspired by technology used in the food industry, this voice technology provides a hands-free way to keep work accurate and on schedule. Operated through headphones and a wireless unit usually clipped to a worker's belt, audible messages give directions to each employee. As a worker walks down an aisle, the system tells him or her to stop at a particular location to pick what is needed from the shelf. After choosing the item, the worker then reads a label code into the microphone, essentially telling the system what's been picked for quality assurance purposes. The labels, coupled with the voice technology, replace invoices, packing lists and other paperwork. The voice technology is also used in other ways. For example, forklift operators can now enter Occupational Health and Safety Administration (OSHA)-required information by speaking, rather than completing several paper forms.

Continuous Improvement on a Global Level

Our company's goal from a global perspective is to connect all of our supply chains and increase the company's commitment to sustainability. This won't happen overnight, as several of our facilities in Europe and Asia must be redesigned. But the largest areas of the business are now connected. As Cengage successfully rolls out initiatives in Kentucky, they are filtered out to other facilities. We help promote the success of these initiatives by having senior team leaders visit the facilities in person and explain in detail what is being done, and how it can be implemented in other locations or situations. The team leaders also help lead brainstorming sessions with, and take suggestions from, the employees at the facilities.

For more information, send an e-mail to author@ism.ws.