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How REI Built a LEED Platinum Distribution Center

  • Rex Magadia
  2018

As a young professional, I always value the opportunity to learn from more experienced supply chain managers. I recently had the pleasure of speaking with Bill Best, divisional vice president of supply chain operations, and Tiffany Thompson, supply chain strategy manager, at specialty outdoor retailer REI. Since finishing graduate school with an MBA in global supply chain management, I began working at REI part time and have enjoyed learning about the inner-workings of this unique company.

I went to Best and Thompson because I was interested in learning more about REI’s newest distribution center in Goodyear, Arizona. The business continued its commitment to sustainable operations by developing this industry-first, net-zero energy, LEED Platinum facility. Leadership in Energy and Environmental Design (LEED) is a rating system created by the United States Green Building Council (USGBC) to evaluate a building’s environmental performance and encourage market transformation toward sustainable design. The system operates on a 100-point system, and projects earn credits for environmentally friendly actions taken during the construction and use of a building. These credits convert to points, which then determine certification level: Certified (40-49 points), Silver (50-59 points), Gold (60-79 points) and Platinum (80+).

REI omnichannel fulfillment system

To give readers an idea of magnitude and scale, when construction was completed in June 2016, the Goodyear distribution center was a seven-year, multimillion-dollar venture that required a high level of coordination and collaboration by all parties involved. The initiative involved multiple sustainability strategies and solutions:

  • A 2.2 megawatt solar system produces renewable energy on-site — enough to power the entire facility annually. The system will provide REI with 25 years of energy and pay for itself in just five years.
  • The industry’s first omnichannel, one-touch fulfillment system enables one person to process items eight times faster than the typical distribution center. This means that outdoor enthusiasts will get their gear faster. Beyond that win for the customer, the material handling systems incorporate 24 volt motors, which reduce the energy demand of this highly automated facility.
  • An innovative restoration project at the Verde River will enhance water flows and recreation access. This is the first LEED-accredited water restoration project, and it introduces Water Restoration Certificates that facilitate large-scale water stewardship.
  • A non-evaporative cooling system keeps employees comfortable in the desert heat. The system is fully powered by renewable energy and saves millions of gallons of water every year.
  • REI has a sustainability goal to be 100 percent landfill-free in its operations by 2020. The Goodyear operation builds on that mission with a recycling program through which approximately 97 percent of all materials are recycled and less than 3 percent of waste is sent to landfills.

REI

To date, most of the articles written on the Goodyear distribution center are focused on these features and benefits. However, there isn’t much information available regarding the how-to aspect. Best and Thompson (who is also the Goodyear distribution center project manager) shared with me the following three steps to maximize success and return on investment in the LEED-certification process.

  1. Make an organizational commitment to sustainability. This is the foundation upon which future goals and successes are built. An organizational commitment to sustainability has a lot to do with corporate alignment. When sustainability and sustainable operations become a core part of an organization’s mission, as they are at REI, the organization can determine its appetite to invest in sustainability. Ultimately, smart financial decisions must be made, and, without corporate alignment, the business case becomes more difficult to build and rationalize.
  2. Identify and choose partners to contribute to and help realize your aspirations. When REI first embarked on the LEED-certification process in 2010, the organization aimed to build a LEED Gold distribution center. However, leaders didn’t say LEED Gold was what success looks like. Rather, at the outset, executives made it clear that LEED Gold was the aspiration, not the limit. Instead of just working from the checklist and making sure enough credits were accumulated, REI identified partners through a rigorous selection process to help the company reach higher.
  3. Model available opportunities along a sustainability continuum with no constraints. After partners were chosen based on their unique core competencies and ability to contribute to REI’s mission, the next step was to model the opportunities using energy conservation modelling methodology against the living building sustainability continuum. LEED falls within this continuum at various milestones — certified, silver, gold and platinum. As REI and its partners tested the sustainable operation opportunities, the process exposed that the group was able to exceed original aspirations and stretch to LEED Platinum standards. Ultimately, the opportunities and actions that REI chose to pursue were born out of collaboration with its partners and deemed sufficient by the USGBC for LEED Platinum certification.

LEED is helping to create a future of sustainable retailing. This is very important, particularly considering that retailing represents 20 percent of all buildings in the United States — taking up even more space than offices. I hope the steps outlined here will enable other retail organizations to embrace similar green building investments.

Rex Magadia works in transportation and logistics at the Academy of Art University in San Francisco. He has a background in environmental engineering and a Master of Business Administration degree in global supply chain management. Magadia may be contacted at rexryan.magadia@gmail.com.

To comment on this article, send a message to feedback@apics.org.

Comments

  1. Doug Carlberg January 24, 2018, 01:38 PM
    This is a winner on all sides for REI, the environment and the Customer who can feel good of where they shop.

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