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- June 28, 2011 -

Green Supply Chain News: In a Pinch, South African Firm Learns How to Cut Distribution Center Electricity Usage in Half


Pharma Company Adcock Ingram Deploys VRV System to Cool Building for First Time Ever in a DC; Literally a Life or Death Matter

By The Green Supply Chain Editorial Staff

The Green Supply
Chain Says:

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There are many good reasons for cutting use of electric power in a distribution center, including lower operating costs and reduced carbon emissions, but in some areas of the world, it may be more a matter of absolute necessity.

Such is the case with Adcock Ingram, a South African manufacturer and distributors of pharmaceuticals and over the counter medicines. A few years ago, the company was split out as an independent company again after it had been earlier acquired, and needed to find some additional distribution space as it no longer would use the acquiring company's DCs.

According to Group Logistics Manager Kirk Nash at the SAPICS conference this week in Sun City, South Africa, Adcock quickly acquired some space in the city of Midrand that had been used by a electronics distributor, and it had just four months to get the facility ready. That included the need to keep a cool and near constant temperature in the building to meet product and regulatory requirements for its drugs.

The crisis: Nash soon learned that a traditional air conditioning system along with other power needs, including lighting, fork truck battery charging, an attached office area, etc., would require nearly double the amount of voltage that the local electric utility could deliver. A meeting with the utility delivered some shocking news: the utility could certainly increase the amount of power it supplier to the location - but not for three to five years.

This not only was a business crisis for Adcock, it could potentially be a life or death scenario. If Adcock could not open the Midrand DC on time, some people with vital needs for its medicines in the area might not be able to get them.

To solve the problem for the 100,000 sq. foot facility, cost became almost no factor. The goal was to find an alternative cooling system that required roughly half that of a traditional one, and to seek other changes that could similarly lower electric use in other areas.

A wide variety of solutions were considered. Solar panels were one option, but the DC roof couldn't support the weight, and there were concerns about temperature consistency if a series of cloudy days significantly reduced the amount of energy generated.

Adcock also looked at other more bizarre (to those in many parts of the world at least) solutions, including separate systems in which one would freeze water at night and use it to cool the DC in the day, and a parallel system that would boil water at night and use it to heat the building. Adcock did strongly consider combining an ice block system with a geo-thermal system for the heat, but the overall complexity of the approach was a deterrent.

According to Martin Bailey, a professor at a South African university who also runs consulting firm Industrial Logistics Systems and helped Adcock on this project, they went through two cooling system consultants and two electrical consultants without really finding an attractive solution.

On their own, the project team found a technology called Variable Refrigerant Volume (VRV), in which temperature controlled liquid (cold or hot) in pipes is pumped around a building, and then fans blow air over the pipes and deliver the right air into the DC or office.

One vendor of these systems, a Japanese firm called Daikin, told Adcock the technology had been successfully used in office buildings, but never in a DC. However, they were pleased to give it a try.

Interesting Facts on this Project:

-- Adcock is able to keep the termpature in the DC using the VRV system within about one degree celcius, with a standard deviation of just .2 degrees.

-- The Daikin system can cool to a temperature of about 17 degrees celcius (about 62 degrees farenheit), but Nash said a similar system from Mitsubishi can now cool to 15 degrees.


That project was launched, along with a number of other power mitigation efforts. A "building management system" (BMS) from Johnson Controls was deployed, which would help generally but especially in the office, where for example the temperature might be raised a few degrees in warmer weather if power consumption in the DC is running high.

Traditional light bulbs were replaced with fluorescents.  A sensor system in the DC turns off those lights in an area if no sign of activity is detected for 20 minutes, an approach that turned out to be a real winner.

Fork truck batteries would use a lower power "high frequency" charging system, and enough batteries were acquired to allow most charging to occur at night, easing the peak day time power demand.

Adcock also literally "raised the roof" and put on a layer of insulation on top of the building.

"We have a few leaks we're addressing, but that has made a huge difference," Bailey said. That project took just one and a half weeks to complete.

One key advantage of the VRV system is that its intelligence allows the coolants to be moved around the building to address temperature differences say based on where the sunlight is hitting.



The overall approach Adcock has taken and the VRV system specifically have been a huge success. Substantial reductions in electricity use have been achieved and put the DC comfortably below the maximum power level that can be delivered to the building. 

It has also led to big savings in electricity costs, especially since in South Africa there are surcharges on the cost of power after certain consumption levels are reached. In fact, the relatively low cost of the VRV system, combined with the savings on utilities bills, would have been well be cost justified to implement even if the power Adcock required had been available from the utility.

Nash says that the company probably would not have taken the VRV approach if the required power levels had been available due to the risk of putting the technology into a distribution center for the first time, but notes when Adcock commissioned another DC elsewhere in South Africa, it is going  with the VRV system even though local power availability was not an issue there.

What's your reaction to this Adcock case study? Should Western companies be learning Green Supply Chain lessons from companies in other areas that are doing interesting things like this out of necessity? Let us know your thoughts at the Feedback button below. is now Twittering! Follow us at

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