Hermes Fulfilment: Energy efficiency for green logistics

E-commerce is booming. While trade in retail stores seems to be stagnating, according to information provided by the German Federal Association for E-Commerce and Mail Order Outlets (bevh), in 2013 e-commerce in Germany increased by 22.9 percent to 48.4 billion euros, with this figure set to increase in future.

The Otto Group is the second-largest online dealer in the world. Customers can complete purchases either in the online shop, by ordering from the catalog or in the store. Service is of the utmost importance and encompasses the entire value added chain from purchase right through to the timely delivery of the product to the customer. The Hermes Fulfilment GmbH company, a part of the Otto Group, is responsible for all of the product logistics–not just for Otto Group companies, but also for external mail-order companies.

Sustainable Logistics for more environment protection

As products do not need to be paid for until a decision to purchase has been made, the return rates in the online sector, especially in Germany, are extremely high. In the fashion industry every second package is returned, which has a negative impact on the environment. Especially in times of climate change, an increased environmental awareness has become an important consumption factor. In this regard, efficient dispatch and optimum return management are the key to success. The returned items have to be returned, checked, and repackaged.

Sustainability has always been important to the Otto Group. By 2020, Hermes Fulfilment must reduce CO2 emissions by 50 percent just like all of the other group companies. The company has therefore introduced a master plan to protect the environment. Economic success and corporate responsibility will go hand in hand during this process. Olaf Wallace, the Operations Manager at Hermes Fulfilment in Haldensleben, Germany explains:

We have quite ambitious climate change objectives. This is a challenging task and we are working with partners to try and resolve it accordingly. We are also providing awareness training to members of staff, as this is where environmental protection begins.

"We have quite ambitious climate change objectives. This is a challenging task and we are working with partners to try and resolve it accordingly." Olaf Wallace, Operations Manager at Hermes Fulfilment in Haldensleben, Germany

Perfectly coordinated logistics and intralogistics

Around 5,000 employees at a total of four Hermes Fulfilment logistic centers in Germany work on a daily basis to ensure that goods are dispatched efficiently to customers by the agreed date. One of the secrets of success is perfectly coordinated processes.

With a plot area of around 54 hectares, corresponding to approximately 28 soccer fields, the site in Haldensleben in Saxony-Anhalt, Germany, is the company's largest and most up-to-date location. Each year 300 million items are processed at this site with 300,000 shipments leaving the dispatch center every day. Around 1.2 million boxes are spread across two high-rise warehouses. If these were placed next to each other, they would cover a distance of 600 kilometers, which would enable you to cross Germany without getting your feet wet. From when the goods are received to when they are dispatched, all items cover a conveying distance of around 30 kilometers.

Drives play an important part in this process, as they influence the energy consumption when items are conveyed. Within the internal logistics department, around 50 percent of the energy costs, are allocated to the conveyor system, storage, and consignment sections in the cases of systems with a high degree of automation. More than two-thirds of the remaining 50 percent is used for heating and ventilation, while around 15 percent is used for lighting. This means that there is considerable potential for optimization of the energy consumption of the internal logistics department.

"We installed the technology expecting to save energy. At the same time, we discovered that it is very quiet." Michael Schekatz, Head of Operational Engineering at Hermes Fulfilment

25 % off: Efficient intralogistics thanks to an energy-saving conveyor system

As part of an energy saving program, Hermes Fulfilment is replacing constantly running systems and is implementing the energy-efficient 24V technology. In principle, any system that is driven using RollerDrive will have a decentralized structure. The drives are located in each of the conveying areas. This ensures that each conveying area can be activated or disabled individually. The conveying system will only move if there is material that needs to be conveyed. During this process, only the RollerDrive that are required to ensure an optimum flow of conveyed material are actuated. This means that there is a huge potential for energy savings as well as for significantly reducing the amount of noise and wear.

The control range, ConveyorControl, is an intelligent alternative to highly complex PLC programming. The simple configuration and wiring enables fast installation and immediate commissioning. The dispatch center is retrofitting the technical equipment on a step-by-step basis during continuous operation. A maximum of four hours are set aside each day for this process. The result: The technical plant and carefully designed bus system are easy to operate, even while undergoing maintenance.

The first measurements at Hermes Fulfilment indicated a 25 percent energy savings thanks to the Interroll drive technology. Michael Schekatz, Head of Operational Engineering and responsible for sustainability, is suitably impressed:

We installed the technology expecting to save energy. During testing, we also discovered that it operates quietly. This is a success that we were not expecting and that we are thrilled about. We have also noticed that maintenance and repair work is a lot easier. We no longer need an electrician; any mechanic or technician can replace the rollers.

Rethinking of energy utilization is the decisive basis for green logistics

Hermes Fulfilment started to consider the responsible use of energy at an early stage. A high-rise warehouse that recovers the braking energy was put into operation as early as 1994. In the meantime, the second generation of efficient motors and controls have already been implemented in the rack operating devices. Currently, a block heating unit is also being installed at the Haldensleben site with the aim of using considerably less electricity. The external lights were already switched over to LEDs in 2008 and there are pilot projects in place to introduce lighting close to workstations so that the energy-intensive surface lighting in the individual halls can be reduced. An energy management system not only accurately records the overall consumption but also the energy flow over the course of the day.

A detailed cost/utilization calculation that takes into consideration not only ongoing operating costs but also initial investment outlays is compiled for each project. Periods before a return is made on the investment can vary. Hermes Fulfilment has come to realize that an initial investment has to be made in order to achieve sustainability.

Simply changing the technology does not mean that maximum energy savings will be achieved. However, it is the decisive basis for a comprehensive rethinking of energy utilization. Michael Schekatz explains:

Energy that is not used is the best means of making savings, and operating energy-saving systems combined with a reasonable daily usage is probably the most successful formula for achieving a sustainable future.

And this is what Hermes Fulfilment hopes to achieve.