7-Eleven’s “Green” Commissary and CDC
February 22, 2009
Founded in 1927 in Dallas, Texas, as a small ice company, 7-Eleven is now the world’s largest operator, franchisor and licensor of convenience stores. More than 7,750 of their 35,500 units are in North America, and each store provides approximately 2,500 different products and services that are tailored to meet the needs of specific individual neighborhoods.
When the company instituted the daily delivery of fresh foods, bakery items and other perishable products in 1994, 7-Eleven set up an intricate preparation and distribution system designed to decrease the number of daily deliveries from multiple suppliers. These efficient centralized distribution centers (CDCs), by their very nature, turned out to be environmentally beneficial. More than 5,600 7-Eleven stores across the U.S. and Canada now offer customers fresh and safe products through CDC’s.
Last month, 7-Eleven took their consolidation concept even further with the launch of their state-of-the-art, “green” commissary and CDC in Bohemia, Long Island. We talked to Dennis Phelps, VP of Fresh Foods at 7-Eleven, about the advantages of an Earth-friendly supply chain.
What are the benefits of channeling products through a Centralized Distribution Center (CDC)?
The supply chain is one of the most fragmented and inefficient areas of our business and directly impacts the cost of goods and hinders employee productivity and customer service in our stores. In one week, a typical 7-Eleven store might receive up to 50 or 60 deliveries. While we’ve already cut that number, we are working to decrease it even more.
Our plan is to combine these deliveries and distribute them more efficiently to better serve customers and the environment. Clustering deliveries by product through centralized distribution points – in 7-Eleven’s case, CDCs – helps remove redundancies in the delivery chain and is a better use of resources. Our daily delivery system significantly reduces DSD (direct store delivery) routes. The CDC system offers 7-Eleven vendors fuel savings by consolidating their deliveries to a single location rather than multiple stores and cuts impact to ozone levels.
Are there additional benefits from combining a CDC with an on-site commissary?
The 7-Eleven CDC concept ‘combines’ products from multiple suppliers for daily distribution by a third-party logistics company. One of the most critical of those is 7-Eleven’s own lineup of prepared foods, which are made fresh and delivered daily to stores.
Proximity is critical in assuring the absolute freshest product and timely delivery of them to our stores and ultimately our customers. Strategically located throughout North America, 26 CDCs work closely with local commissary kitchens and bakeries to deliver products like 7-Eleven’s proprietary lines of fresh foods and bakery products.
What makes this new “green” CDC unique from other the CDCs in your supply chain?
The new facility was designed to lower energy use and water demand, improve the quality of grey-water discharge, lower the cost of utilities, improve product quality and lower the cost of manpower. Green energy savings from this environmentally in-tune facility include:
· A state-of-the-art tray washer that reduces water use by an estimated 40,000-plus gallons per day compared to pressure washing.
· A high-tech central refrigeration system that lowers energy use by 30 percent compared to a conventional DX (split) system with estimated savings at $300,000 annually.
· Cabinet washers, which use bio-degradable detergent, featuring an automated washing system that reduces water, chemical and labor requirements.
· An integrated Rinse, Foam and Sanitation system that uses 8 gallons per minute (GMP) compared to 30 GMP for a conventional system.
· The Gas Energy Mixing (GEM) station that treats plant grey water before it’s discharged into the septic system and lowers operating costs by replacing the need to pump and service the septic system. Estimated to save $200,000 annually in service costs, the GEM lowers the impact on local water resources by removing 80 to 90 percent of suspended solids.
· “Intuitive” lighting systems that can reduce energy expenditure to 25 percent or be off completely when no activity is sensed.
· Enhanced food safety technology, with AirOcare units that feature a patented system for removing up to 99.9 percent of the germs, molds and contaminants from the air and surfaces without the use of chemicals. AirOcare equipment creates a reactive oxygen species (ROS) that eliminates viruses and pathogens, and significantly reduces airborne and surface contamination.
Where do you think you will save the most energy?
The new facility offers resource and cost-savings in several areas – 60,000 fewer gallons of water per day than a comparable facility, 30 percent less electricity than a facility that uses DX cooling systems and 216,000 fewer Therms (natural gas use units) per year. Total savings is in the hundreds of thousands of dollars, not to mention fuel savings because of the reduced number of routes – by 7-Eleven and vendor trucks – made possible by the new larger Long Island facility.
How can the 7-Eleven “green” CDC serve as a model for other distribution centers?
7-Eleven’s newest commissary and CDC demonstrate 7-Eleven’s approach to providing a broad selection of fresh, high-quality foods in an environment that will conserve energy, water usage and utility costs. We began planning the new Long Island complex with Norris Food Services, our third-party operator, two years ago with an agreement to build an environmentally sensitive and secure plant. We have been able to meet customers’ fresh-food quality needs while minimizing the local environmental impact.
As a group, all our third-party CDC, commissary and bakery operators meet regularly to share insights and experiences, always with an eye toward improving product quality, maximizing efficiencies and preparing for future needs and wants of the consumer. We will continue to learn from our operations in this newest facility and from efficiencies that our other partners bring forward to the group.
What can retailers learn from 7-Eleven’s success in the sustainable preparation and distribution of fresh foods?
Building efficiencies into your business systems can translate into benefits not only for the bottom line but for the environment as well. Besides minimizing the local environmental impact, reduced energy usage and better water conservation translates into lower operating costs and lower cost of goods. By centralizing food preparation in local USDA-inspected temperature-controlled commissaries and bakeries, 7-Eleven can set and adhere to more stringent and consistent food safety procedures, reduce labor costs and improve product quality.
In upcoming issues, we will feature interviews with companies that are taking innovative steps toward the creation of sustainable products and services. If you are interested in telling us more about what your company is doing please contact Allison Bloom at firstname.lastname@example.org.