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1
November 29, 2012
Richard Murphy Jr. ASLA
President & CEO, Murphy Companies
Past President, American Society of Landscape Architects – MN Chapter (ASLA-MN)
Past Chair, Center for Transportation Studies (CTS), U of MN
Past Chair, Council of Supply Chain Management Professionals (CSCMP)
E-mail: richard@murphywarehouse.com
Murphy Warehouse Company Case Owner’s Perspectives
Greening The Grounds:
Finding Economic and Sustainable Returns In Supply Chain Logistics
Resource Allocation Decisions Green Sustainability Returns vs. Economic Returns Is a Balance Possible? What Can Drive this Balance Analysis
2
Perspective
Presentation Flow
• Where Do I Come From
Intro to Murphy
Intro to Logistics World
• Site Level - Green / Sustainable
Practices with ROIs
Native Prairie Planting – why plant & maintain,
economic ROI (return-on-investment) results.
Trees + Prairies Carbon Sequestration
Stormwater Management – how to be green and
economic at the same time.
Urban Heat Island – mitigation strategies
Solar Power Generation – using state of art
technology, designed and manufactured in Bloomington, MN.
LED Lighting Technology – ROI Analysis
Carbon Neutrality – Murphy’s practices getting very
close at 12.83%
• Why We Went LEED & Energy Star
Certification
5 Strategies
Sustainability Certification LEED Gold & Silver and Energy Star
2 LEED GOLD & 1 LEED Silver Certified
“Existing” Facilities (GOLD: July 2010 - built in 1994 and 1996; SILVER: Nov 2012 – built 1999)
Minneapolis Campus Spring 2013
Eagan Campus Spring 2013; Target level
Gold/Platinum
Energy Star Certification
Scored 99 & 98 on 100 point scale (Aug 2010).
Central Ave scored 87 (Jan 2012).
Minneapolis & Eagan review Winter 2012/3.
GOLD Top 1%
Perspective
3
Sustainability Certification ISO 14001 and SLI Certification
ISO 14001 Certification
Environmental Performance & Management Certification; Nov. 2012.
Sustainable Logistics Initiative
International Warehouse Logistics Association sustainability certification for the 3PL Logistics Industry.
Perspective
Where Do I Come From Supply Chain Logistics / Transportation
Why Care About: Touches Everything We Do
8.3% of Economy!
4
Where Do I Come From Supply Chain Logistics / Transportation
Why Care About: Touches Everything We Do
% of Economy
8.3% Logistics $3.78 per person in U.S.
vs.
17.3% Healthcare $7.89 per person in U.S.
Why Care About: Supply Chain Logistics / Transportation
Strategic Advantage - Supply Chain Execution Apple iPod Global Supply Chain – leading edge tech would be wasted if time to market was too long!!!
Steve Jobs said the supply chain was the key to Apple’s success…!!!
Apple has been the #1 Supply Chain in the world for 6 straight years..!!
Perspective
5
Why Care About: Supply Chain Logistics / Transportation
Strategic Advantage - Supply Chain Execution P&G’s success relies on this and so do many others
Yes, the great ads, packaging, shelf designs, marketing, sales, etc. help….
But if the product isn’t on the shelf when you want to buy - it doesn’t matter anymore
Perspective
Why Care About: Supply Chain Logistics / Transportation
UPS’s new branding campaign has pulled back the curtain and introduced the consuming public to the importance of supply chain logistics in their lives and the economy
Perspective
6
Where Do I Come From Warehousing in Logistics
5 Billion Sq. Ft of warehousing in U.S. (ProLogis)
Perspective
Warehousing in Logistics 5 Billion Sq. Ft of warehousing in U.S.
Floor area equals a 4 foot walkway from here to the Moon…!!!
The 5B only includes what’s under roof. Add another 40-50% to add outdoor dock & staging areas.
Industry has a massive impact on the Nation’s landscape
Perspective
7
Warehousing in Logistics 5 Billion Sq. Ft of warehousing in U.S.
Equates to a 4 foot by 4 foot square of space in a warehouse for every man, women and child in the U.S….all 330,000,000 of us…!!!
….a big footprint on the landscape!
4 Feet
4 Feet
Perspective
Where Do I Come From In the Beginning…1904 4th Generation Family Business “Feeding the horse-power was key”
8
3PL – “3rd Party Logistics Services Provider”
Companies Served: Fortune 100 to Small Entrepreneurs Domestic and Global
Industries Served: Retail / Catalogue / Consumer Medical / Health Care Grocery / Food Processing Beverage Plastics Recreational / Camping Industrial Forest Products (Paper/Packaging) International
Perspective
Who is Murphy Logistics Services Company / 3PL
We are a Service Company Warehousing, distribution, transportation, value-
added, fulfillment, international, etc.
We handle products throughout their life-cycle
From raw materials to in-process goods to finished products to returns for numerous industry segments.
Square Feet Operated: 2,800,000 ; Employees: 185
ISO 9001 & 14000 / OSHA SHARP / Organic Food Certified LEED “Gold” Certified / Energy Star Certified Facilities US Customs – CES, CFS, GO; FTZ (Foreign Trade Zone)
SKU’s Controlled: 29,000+ ; Orders / Month: 30,000+ Truck Loads Handled / Year: 120,450
Rail Cars Handled / Year: 9,000 (equivalent to 31,500 TL’s)
How do firms use Murphy 13 Examples
1. Big Box / Mass Merchant / Retail
2. Global Sourcing – Domestic Distribution
3. Domestic Sourcing – Domestic Distribution
4. Vendor Consolidation Park
5. Seasonal Space Offsets
6. Domestic Manufacturing Support / JIT Plant Support
7. Distribution / Transportation Services • Regional Distribution
• U. S. Distribution
• Consolidation / Cross Docking
• Rail Transload / Truck-Rail-Ocean Integration
8. Contract Logistics
9. Medical Support Logistics
10. Value Added Services • Parts Assembly
• Pick and Pack operations
• Packaging
11. Customer Returns Processing
12. Core Competency Strategies Solutions
13. Build to Suit Operations and Warehouses
Perspective
0%
20%
40%
60%
80%
100%
Jan
Feb
Mar
ch
April
May
June July
Aug
Sept Oc
t
Nov De
c
Jan
Seasonal Spec
Sugar
9
Medical Support Logistics JIT Replenishment
Surgical Kits
Custom kits for various surgery operations Customized for teams of Doctors at every hospital.
Kit contains all the items needed for a surgery.
JIT delivery to hospital.
Hospital Supplies IV Solutions, Needles, Dressings, etc.
Mass Merchant Retail Support Store Backroom Logistics
Supply of 1500+ Stores with items to run stores
Supplies, training manuals, uniforms. Sales/promo
materials, bags, etc.
Full “pick-pack” operation..
Perspective
Customer Returns Management “Reverse Logistics”
What happens to your clothes once they reach the final end of retail
Clothing – garments shipped overseas for fibers to be separated and reused. A local fashion designer has a clothing line made from re-
cycled threads.
Shoes – rubber soles recycled; fabric used as compost.
Leather Goods – reprocessed into other leather items.
Perspective
Regional Distribution Contract Logistics - 5 State Distribution
Beer: Domestic + imports + end-of-isle displays. Operate at 40-55º; keg room at 36º
Strict lot control & rotation: “Born-on Date”
Facility handles 18 rail cars indoors at one time
Reduces Distributors’ Cash Flow Requirements
Typical Beer activity: 52 turns per year DC Designed for “Flow-through”
10
Global Sourcing – Domestic Production Multiple Concepts in Operation
Food Products – Raw, In-Process & Finished • Import From Middle East & elsewhere
Vendor Park (Global Consolidation Point) • North America Distribution
Inbound Flow - Raw Materials
Outbound Flow – Finished Goods
U.S. Distribution Recreation Industry
Canadian Companies Covering Entire U.S. from One Central DC Operations Include:
Item Pick / “Pick-Pack” Case Pick Pallet pick Small-to-Large Order Custom Labeling Carrier Selection and Management
Value Added Services “Postponement”
Important Concept in Marketing • Allows manufacturers to “postpone” final
format of products
• Reduces total number of SKUs and inventory size
• Allows customization to customer specs at last minute
• Typical services include: Brand labeling / Packaging (private label)
Order entry and customer service
Kit assembly / Make-to-order
Multi-pak creation
Shelf / end-of-isle display ready
Reverse logistics for store returns
Product repair
Inventory control
Halloween Candy
Mix packs
Multi-paks
Tray Pack
End-of-Isle Displays
Product Assembly & Packaging
11
Value Added Services Postponement Concept
Retail Supply Chain – Big User
Increasing Important for Retail Sectors: Club Stores
Mass Merchandisers
Box Retail / Department Stores
Auto Stores & Repair Channels
Grocery Wholesalers & Retail Chains
Super-sized Stores
Murphy Project Example Multi-vendor 4th of July promotion
End-of-Aisle Displays
Multi Vendor Sales Promotions
Master invoicing & coordination
Murphy Rigging & Erecting, Inc. A Rigging / Millwright Contractor
Clients: Manufacturers to Printers
Medical to High Tech.
Artists to Classified Military.
From Very Precarious Handling….to Very Heavy Lifts
….to Fragile Works of Art….to Delicate and Expensive
Medical Devices
12
Richard Murphy, Jr. ASLA Where Else Do I Come From…???
Perspective
Landscape Architect MLA Harvard Grad School of Design
MBA University of Minnesota
BLA University of Minnesota
Adjunct Professor College of Design, U of MN
25 years so far…
Sustainability / Green Practices A Fresh Perspective
Traditional Focus is Inward Looking
Lighting, HVAC, forklift & truck fuel, packaging,
recycling, green purchasing, etc.
Added Focus is Outward Looking - Site Level Green / Sustainable Practices In many cases these represent “low-hanging fruit” with short ROIs.
Native Prairie Planting – why plant & maintain,
economic ROI (return-on-investment) results.
Trees + Prairies Carbon Sequestration
Facility Design: Stormwater Management –
how to be green and economic at the same time.
Urban Heat Island – mitigation strategies
Solar Power Generation – using state of art
technology, designed and manufactured in Bloomington, MN.
Impact of Solar on Mortgage Finance
LED Lighting & ROI Analysis / Decision –
350,000 sq. ft. case study in Eagan by Murphy
Carbon Neutrality – Murphy’s practices getting very close
at 12.83%
–
–
–
–
13
A Question I Ask Industry Audiences:
Have you ever given much thought to your facilities?
Landscape?
Stormwater?
Case 1 - Native Prairie vs. Lawn
Case 1 - Native Prairie vs. Lawn
….You Should…!!!
A Question I Ask Industry Audiences:
Have you ever given much thought to your facilities?
Landscape?
Stormwater?
14
Native Prairie vs. Lawn Three Questions
1. Is there a cost difference?
2. Is there an environmental difference?
3. Do they look OK?
Case 1 - Native Prairie vs. Lawn
Fridley Logistics Campus 4700 & 4850 Main St NE, Fridley, MN 55421 Location of cost figures & 500,000 sq. ft. of warehouse.
Brown areas are native prairie Photo taken in early spring.
Case 1 - Native Prairie vs. Lawn
15
Facility Design Native Prairie vs. Lawn
Is there a cost difference – YES Annual Maintenance Costs
Why have manicured lawn entirely surround large DC & manufacturing facilities?
Manicured lawn costs 7.3x move to maintain than native prairie plants!
Much more environmentally friendly and sustainable!
Site: 4700 & 4850 Main St NE, Fridley, MN 55421
Actual data from Murphy expense records
$4,240
$21,650
$-
$5,000
$10,000
$15,000
$20,000
$25,000
6 acresPraire Areas
4.2 acresLawn Areas
Tota
l Costs
Native Prairie vs. LawnTotal Cost Differences
Case 1 - Native Prairie vs. Lawn
Native Prairie vs. Lawn Is there a cost difference – YES
Annual Maintenance Costs If all 10.2 acres is cut lawn
Site: 4700 & 4850 Main St NE, Fridley, MN 55421
Actual data from Murphy expense records
Case 1 - Native Prairie vs. Lawn
$4,240
$21,650
$52,652
$707
$5,167
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Praire Areas6 acres
Lawn Areas4.2 acres
If All CutLawn
10.2 acres
Co
st
per
Acre
To
tal C
osts
Native Prairie vs. Lawn Total Cost Differences
16
If all
Cut Lawn
Prairie Lawn Lawn
Areas Areas AreasAnnual Costs 6 acres 4.19 acres 10.19 acres
Maintenance 4,240$ -$ -$
Mowing - 12,015.00 29,220.25
Watering - 8,630.00 20,988.00
Fertilization - 1,005.00 2,444.14
Total Cost: 4,240$ 21,650$ 52,652$
Cost / Acre.: 707$ 5,167$ 5,167$
Existing Set-up
Native Prairie vs. Lawn Is there a cost difference – YES
Annual Maintenance Costs Component Costs
$ 4,240
$12,015
$8,630
$1,005
$-
$2,500
$5,000
$7,500
$10,000
$12,500
Native Prairie vs. LawnComponent Cost Differences
Praire Areas 6 acres
Lawn Areas 4.2 acres
Site: 4700 & 4850 Main St NE, Fridley, MN 55421
Actual data from Murphy expense records
Case 1 - Native Prairie vs. Lawn
Prairie Maintenance Key to success…!!!
Provided since day one by
Prairie Restorations of Princeton, MN web-site: www.prairieresto.com
Services include site visits 4-6 times per
growing season and burning every 2-3 years.
Brown areas are
Native Prairies
17
Native Prairie vs. Lawn Is cost difference significant - YES
Economic Impact
“Over the last 16 years we have saved over
$947,428 while being green by planting
native prairies on 2 logistics Campuses!!”
Case 1 - Native Prairie vs. Lawn
Lawn Irrigation Sustainability Eagan Site
Smart Management Tool at Eagan Plant Need + Soil Moisture Level + Rain Forecasting & Adjustment
Soil moisture sensors Weather adjusted irrigation 24/7 automatic site monitoring Internet mgmt. Est’ed ROI: 3 years
Case 1 - Native Prairie vs. Lawn
18
Maint. Cost
6 Acres
Lawn: 31,002$
Prairie Install Cost 34,320$ 1.28 Years
Prairie: 4,240$ Savings per Year 26,762$
of Prairie vs. Lawn
Cost Difference: 26,762$
Native Prairie vs. Lawn Is there a cost difference – YES
ROI of Prairie vs. Lawn Installation
* Does not include $30,000+ cost of sprinkler system.
Site: 4700 & 4850 Main St NE, Fridley, MN 55421
Actual data from Murphy expense records
Install Cost Install Cost
6 Acres vs. Prairie
Prairie 34,320$ -
Seeded Lawn* 48,000$ 1.4x
Sod* 111,000$ 3.3x
Case 1 - Native Prairie vs. Lawn
Native Prairie vs. Lawn Is there an environmental difference - YES
Native plant materials selection.
No watering required, or significantly less in dryer climates.
No fertilization required.
Roots are deep and assist stormwater infiltration.
Lawn Grass:
1-3 inches
Prairie Grass:
3-15 feet
Case 1 - Native Prairie vs. Lawn
19
Native Prairie vs. Lawn Results of Native Plantings – “Wildlife” Fox, Deer, Eagles, Hawks, Numerous Bird Species, Ducks, Fish
Eagles dive into water and pull out fish!
Pictured right is a 12 point buck at the 7033 Fridley
Facility, Fall 2009.
Former EPA Superfund site cleaned and developed by Murphy in 1999. 7033 Central Ave NE, Fridley, MN 55432
7 acre native prairie surrounding retention and
ground water pond. Site where Eagles dive for fish.
Case 1 - Native Prairie vs. Lawn
Native Prairies & Trees Environmental Metrics
Carbon Sequestration Annual Benefits 14 Acres of Native Prairie
24.93 MtCO2e/Year
732 Trees
275 Oaks, 274 Maples, 183 Spruce/Pines
117.1 MtCO2e/Year
Carbon Sequestered by Murphy’s Trees and Prairies over 14 years:
5,009,961 pounds
Case 1 - Native Prairie vs. Lawn
20
Native Prairie vs. Lawn Do they look OK?
Neighbors love it…!!! We run thousands of trucks through
the neighborhood yet the #1 thing I hear is…...“oh, you’re the guys with all the pretty flowers on Main St.”
Start-up Issue…. Prairie plants often do not meet city
lawn height ordinances!
Needed a variance in 1994 with 1st one.
Former Landscape Architecture student
of mine was Fridley’s Assistant City
Planner and understood what we
wanted to achieve and allowed us to
proceed - the rest is history!
Photos show native prairies at Murphy’s Campuses -
14 acres total at four facilities.
Prairies installed in 1994, 1996, 1999 and 2008.
Case 1 - Native Prairie vs. Lawn
Edge
Much like a picture frame gives order to a busy painting, a cut lawn edge does the same for a prairie.
Case 1 - Native Prairie vs. Lawn
21
Edge Key element in working with Prairies in urban areas.
Without an edge prairies are very, very rough looking.
Note flowing line (“edge”) between prairie and lawn
Note straight line (“edge”)
Typical look with no edge. Note roughness visual quality.
Gets worse as plant height increases Note flowing line / edge
between prairie & lawn
Native Prairie vs. Lawn Do they look OK?
Not only do neighbors love them We have been robbed twice!
One 4th of July a van was seen pulling away from the property with plants in back. Police arrested the individual.
Contacted Ron Bowen of Prairie Restorations
for a value per police request he responded:
“they’re priceless!”
These were 7 year old plants with deep roots.
Summer 2009 an elderly couple were seen digging up plants. Unfortunately not caught.
Case 1 - Native Prairie vs. Lawn
22
Facility Design Stormwater Regulation Impacts
Changing facility design & management
Traditional Focus: get stormwater off-site fast
Today’s Focus: handle stormwater onsite and reuse
Few outside profession realize growing impact…!!!
EPA mandated cities to control their stormwater – quantity & quality
Regulations required cities to comply with no additional Federal Funds, thus local fees.
Stormwater fees growing 2000+ cities to date nationwide.
Minneapolis - $3,400 per acre (i.e. $0.12 per sq. ft. of warehouse). Most DC/warehouses use 20+ acres; cost is $68,000+/yr.
Case 2 - Stormwater
Minneapolis Logistics Campus Stormwater Project 701 24th Ave SE, 55419
• 22 Acres, highly urban site
• Buildings dating from 1904 – 1980’s
• 24/7 busy logistics operation.
• 95% impervious before project 58% building, 37% pavement, 5% green
New suburban regulations often require 25-40% green coverage
Nearly 100% of Stormwater running off site.
Kasota / Rollins Ave.
24th Ave SE still combined storm
/ sanitary line.
Goal #1 – reduce / eliminate annual stormwater
fee of $68,000.
Goal #2 – here for long haul, therefore, be a good
corporate citizen and do the right thing.
Goal #3 – leverage environmental leadership in
our business strategy.
Case 2 - Stormwater
23
Minneapolis Logistics Campus Stormwater Project
Two Solutions Explored
1. Underground Storage
Very expensive system – extra $300,000 for our
project & added 5 more years to ROI.
2. Permeable Pavements - Concrete, Asphalt & Pavers
Great idea – per respective industry associations: not capable today of withstanding the constant grinding & shear stress from truck’s turning while pulling back into docks.
Case 2 - Stormwater
Minneapolis Logistics Campus
Stormwater Project
Basic Water Flow Design
Key:
Main Retention Pond
Bio Retention Basins
Surface and underground pipe flow
Underground only flow
Overflow release to area storm system
Prairie grass infiltration area
Case 2 - Stormwater
24
Minneapolis Logistics Campus Stormwater Project
Net Result
100% stormwater fee credit
$68,000 annual savings
50% federal depreciation deduction*
* NOTE: not known till after completion.
NOTE: Original design generated 78% stormwater fee credit.
“As-built” drawings = 102% net credit.
Site: 22 acres
% impervious: 95%
Project Cost
(Design + Const.) 580,000$
Annual Storm water Fee 68,000$
Payback in Years: 8.53
+ Federal Stimulus Package
Immediate 50% Depreciation: 290,000$
7.0 yrs after Fed Credit & Tax Impact
8.5 yrs simple pre-tax basis
Case 2 - Stormwater
Minneapolis Logistics Campus Stormwater Project
Case 2 - Stormwater
25
Major Retention Basin NW Corner of Site
Photos show 1st summer plant growth
Case 2 - Stormwater
Major Retention Basin NW Corner of Site
Photos Show 2nd Year Growth
Important to recognize that native prairie plantings will take 3 years to show maturity. One must be a bit patient.
Case 2 - Stormwater
26
Facility Design Gray + Green Infrastructure
Cities starting to treat & regulate street trees like sewers and roads.
To handle urban heat, stormwater, and improve real estate values thus higher property tax values.
Only a matter of time before they look to private property to help in this cause.
Gray Infrastructure Green Infrastructure
Site Level Green
Green Urban Infrastructure Why Trees Will Be In Your Future
Trees and Stormwater Management
Mature trees hold nearly an acre-foot of stormwater…!!!
Mature tree’s leaves & branches hold 80% of 1” rain in 24 hrs. In Minneapolis this represents 90% of all storms!
Reducing stormwater prolongs life of sewers and pipes. Cities today can’t afford to replace current old and wearing out systems!
Site Level Green
27
Green Urban Infrastructure Why Trees Will Be In Your Future
“Urban Bonsai”
That’s what we grow for city trees today
Typ. 15+ year old city trees Natural 10 year old tree
vs.
Site Level Green
Green Urban Infrastructure Why Trees Will Be In Your Future
To Receive Benefits More Soil Needed For Root Growth
It’s a very simple concept
Site Level Green
28
Urban “Heat Island” Impacts From Trees
Urban Infrastructure
New planting technologies allow more soil: Tree root growth - thus bigger trees
Stormwater - holding & recycling
Gray Infrastructure - reducing stormwater prolongs life of sewers and pipes. Cities today can’t afford to replace current old and wearing out systems
Shade - more due to bigger tree growth reducing urban heat island impact
Increased property values
Silva Cell example in Minneapolis (http://www.deeproot.com)
Technique readily useable on Logistics / DC Campuses
Site Level Green
Green Urban Infrastructure Impacts From Trees
University Ave LRT Corridor Trees & Stormwater Control
Stormwater
29
Urban “Heat Island” Logistics / Distribution Campuses Built of large and tall buildings with flat roofs
Typ. Size: 3-500,000 sq. ft. ( 7-12 acres under
roof )
Typ. Hgt.: 24-38 feet
Typ. Truck Yard space: 30-40% of building size.
Typ. Impervious Cover: 60-70%
Case 3 - Urban Heat Island & Mitigation
Urban “Heat Island” Typ. Solution Today: White Roof Reflects more solar radiation, thus reducing heat
Regular roof
White roof
147°F
Air Temperature: 102°F
122°F
Location: Phoenix, Arizona
Case 3 - Urban Heat Island & Mitigation
30
Urban “Heat Island” Potential Solution – Green Roofs
Chicago City Hall In 2000 the City of Chicago roofed its half of a
building in a green roof with striking results as noted.
Situation in Photo: 90-degree day
90ºF – Roof Temp. City of Chicago side
(green roof)
170ºF – Roof Temp. Cook County side
(normal built-up roof)
Case 3 - Urban Heat Island & Mitigation
Urban “Heat Island” Potential Solution – Green Roofs
Minneapolis Library Green roof temperature statistics
Situation: 90-degree day
Green Roof: 92° F
White Roof: 125° F
Dark Ballast: 145° F
Black Roof: 170° F
Case 3 - Urban Heat Island & Mitigation
31
Green Roof Can Become Stormwater Retention Basins
Multiple Benefits:
Delayed runoff onto site
Delayed storm surge into system
Reduced size and cost of site
infrastructure
Reduction of stormwater fees
Case 3 - Urban Heat Island & Mitigation
Green Roof Challenge today – Expensive
Often 2-3x cost of normal roof Therefore rarely seen on private projects
Today government buildings where they are seen
Normal white roof: $5.00 per sq. ft.
Green roof: $10+ per sq. ft. w non-watered plants
Green roof: $15-25+ per sq. ft. w watered plants
Roof membrane life longer since it’s protected from solar rays
Normal roof: 20-25 years.
Green roof: 40-50 years est’ed.
Case 3 - Urban Heat Island & Mitigation
32
Green Roof Target Center, Minneapolis
Cost: $26.00 per sq. ft.
Green roof: $12.00 per sq. ft.
Irrigation: $2.00 per sq. ft.
Electronic leak Detection: $1.50 per sq. ft.
Waterproofing Membrane: $10.50 per sq. ft.
Data Source: ASLA.org/stormwater
Case 3 - Urban Heat Island & Mitigation
Green Roof Cooling aspects around roof air vents
Proven application: Research shows even a 50 foot ring around air
intake vents proving beneficial.
Temp difference often 30+ degrees – between
green & std roofing.
Therefore, 30 degrees less energy needed for
cooling fresh intake air in summer.
Benefits accrued without green roof spanning
entire roof area
50 foot radius green roof
around fresh air intakes
Case 3 - Urban Heat Island & Mitigation
33
Energy Creation - Solar Power Roofs - Large available flat areas “just sit there” LEED Credit Points….
Commercial solutions include:
“Solar Energy Service Provider” - 100% responsibility to design,
build, own and operate the asset - including all upfront purchase
and installation costs….challenge in Midwest – utility rates too
low for economic models!!!
….to solutions where building owner owns the solar assets and
provider merely design-builds the system.
Staples Store, CA
2 Solar Providers:
Case 4 – Solar Power
Energy Creation Solar Power
Myth: Solar PV better in hotter climates.
Fact: Solar PVs are more efficient the colder they get. Minnesota’s climate is perfect!
Case 4 – Solar Power
34
Energy Creation By Murphy
4th Largest Solar Energy Producer in MN Ikea is #1 & other in top 10 are government entities
Murphy installed 8 systems 2010 - 2012 320KW total power
5 buildings
Fridley Logistics Campus: produces 50% of energy use on 2% of roof…!!! 2 LEED Gold site
5 Major Innovations (state of art in world today):
Run at low voltage – increases efficiency and solves fire department issues with live systems; system can be turned off when fire dept. shows up for fire!
Solved “shadow problem” – shading a portion of panel now doesn’t shut system down!
Can Utilize 3M Solar Reflector Tech – only solar manufacturer who can utilize this boasting power.
Smart Panel Technology – panels only produce power when asked by control device.
No Roof Penetrations – held in place by weight array (vs. attaching to roof with potential roof leaks!)
Case 4 – Solar Power
Energy Creation ROI of Solar Power
1st Three Systems in 2010 Project Cost for 120KW power: $1,000,000
• Normal, non grant supported solar ROI period is 20-25 years.
• Murphy’s project ROI period is 4 years…!!!
4 Grants at work here:
1. Xcel Energy Grant (Utility Company)
2. Federal Stimulus
3. State Stimulus
4. State special grant for using MN solar tech.
Murphy paid $90,000 (of $1M system cost)
3M Solar Reflector Film
tenKsolar Panel
System designer, installer & grant consultant
Jon Kramer, NABCEP certified PV installer
240-463-3688; jk2surf@aol.com
Case 4 – Solar Power
35
Energy Creation 2012 Case Study in Eagan
350,000 sq. ft. Building Built 1978-80
Empty for 8 years
2012 Murphy purchase
$3.8M in upgrades • Lighting
• Fire System
• HVAC
• Dock equip.
• New access road
• Re-establish rail
• 90 trees
• 1.5 ac. Native prairie
LEED Platinum / Gold target
40 KW array - Nov. 2012 install
40 KW Solar PV
Case 4 – Solar Power
Energy Creation 2012 Case Study in Eagan
40 KW Solar PV Array Dakota Electric vs. Xcel ROI
Jon Kramer
NABCEP certified PV installer
Sundial Solar
office phone: 612-926-8506 cell phone: 240-463-3688 website: www.sundialsolarenergy.com
Dakota Electric Xcel
Case 4 – Solar Power
36
Energy Creation Eagan ROI of Solar Power
Why Install with 11 Year ROI? SBA Mortgage Loan Impact
• Original finance goal was to secure an 80-20 loan structure (80% loan with 20% Murphy cash investment).
Market is closer to 70:30 to 75:25 structures
• Explored 5 different banks, 1 REIT, and the insurance market.
• Two of the banks suggested we explore SBA track as part of total mortgage package.
• Because Murphy, plus others in our industry, have large buildings with few employees per sq. ft. we never meet SBA criteria. This time it was no different.
• HOWEVER…..when the SBA saw on our application that we are installing solar power (i.e. renewable energy) we automatically became eligible!
• Result: 95:5 structure….unheard of today!!! 95% is mortgage with only 5% Murphy cash
Murphy Minneapolis Logistics Campus
1 of 4 solar arrays onsite
Case 4 – Solar Power
Energy Creation Eagan ROI of Solar Power
SBA Loan PR Benefits From Murphy’s Education Effort National + Local Coverage
37
Lighting Since 1980’s Have Been Changing Fixtures w New Tech
ROI of 1.8 Years Typical
Minneapolis Site: 3x so far since 80’s
Fridley Central: new bldg. in 1999
and changed fixtures after 5 years
All facilities now T-8
Case 5 – LED Lighting
LED Lighting Leading Edge in Mid-West For Facilities 100,000 sq. ft. +
We Couldn’t Find Anywhere to View in Upper Midwest! Murphy Eagan
350,000 sq. ft. in size
Built in late1970’s
Old high pressure sodium
Upgrade options: T-5 or LED
Existing
Proposed
Vs.
38
LED Lighting Narrowed to 2 Options
Lithonia vs. Lusio
Motion sensor on each fixture
Lenses on each fixture to reduce glare and protect food if damaged
Lighting
LED Lighting Lithonia Fixture Selected
Brochure Comparison Data
Lighting
39
LED Lighting Why?
Multiple Benefits:
Long-term energy use reduction
Long-term maintenance cost reduction Fluorescent lighting needs the bulbs
replaced every 2.5 - 3 years.
LED fixtures will not be touched for 40-50,000 hrs. or 20+ years!
LEED / Energy Star impacts
PR Leverage value in corporate strategy
ROI
Install Energy Cost Savings Period
Fixture KW Cost * per Year per Year Years
HP Sodium 223.16 -$ 64,937$ -$ n.a.
Existing
T-5 118.56 210,000$ 23,576$ 41,360$ 4.1
LED 89.38 445,000$ 17,773$ 47,164$ 7.8 **
* Includes sensors on each fixture.
** Savings from no T-5 bulb replacement & disposal every
3 years not included. Dakota est'ed utility credit included.
Breaking News: a revised rebate calc.
reduced the LED ROI to 5 yrs.!!!
Case 5 – LED Lighting
Dock Plate Heat Loss Steel Plates Act as Ice Cubes in Winter to Cool Bldg.
Murphy Designed In-house Solution Very Low Cost With Huge Returns!
Increased temperature around docks 10+ degrees
Reduced bldg. heat expense 15%
• Note: we hold at 55° in winter
First installed in 2000.
• A few years ago dock equip. suppliers started to offer this product.
Dock Insulation
40
Transportation Trailer Wind & Mileage
Smart Truck “Under Tray” System
Enhanced cross wind stability per Murphy drivers experience
Tougher / stronger solution than curtains
• Expect less winter snow & ice damage
7% mileage improvement with system Murphy installed
• Smart Truck has additional items that reach 12%.
http://smarttrucksystems.com/
Transportation
Transportation Trailer Wind & Mileage
Smart Truck “Under Tray” System Murphy’s ROI Analysis Calculations
Installed May 2011 on 2 test trailers
7% mileage improvement expected with system Murphy installed
Murphy ROI Analysis
Assumptions:
Diesel Pice (per ga.) 4.00$
7% Fuel Savings (per ga.): 0.28$
Miles Driven by Trailer (per day) 500
Device Installed Cost 2,500.00$
ROI Calculation (per unit):
Miles / Day 500
div by Avg. Fleet MPG: 5.2
Gallons Used 96.15
x 7% Fuel Savings Expected 0.28$
Savings per Load 26.92$
Device Installed Cost 2,500.00$
div by Savings per Load 26.92$
ROI in Days 92.86
Transportation
41
Why We Went LEED Especially at the Height of a Recession Put Another Way: Why Does Murphy Voluntarily Do Green Projects/Practices?
5 Part Strategy
1. Leader’s and Family’s Perspective on
Leadership
2. Doing most of the actions anyway so why not
get 3rd party recognition
3. Strategic Business Reasons
4. Green practices are showing positive
economic ROI results
5. Marketing and Branding
Why LEED
Why We Went LEED Leadership Strategy (Item 1)
• Leader a Landscape Architect “what can we say…..”
• 4th generation family business “in for the long haul”
• Family believes it is important to be a leader - being sustainable is important and will grow
Why LEED
42
Why We Went LEED Business Strategies (Item 2)
• Doing most of the actions anyway so why not get 3rd party recognition Client’s sustainability departments
don’t understand what we have been up to for years.
They do not readily understand where the rubber literally hits the pavement.
Why LEED
Why We Went LEED Business Strategies (Item 3)
• Listening and responding to our client’s “future” needs Major corporations will have “Green”
initiatives and requirements – esp. once the recession in finally over!
They need assistance from their Carriers, 3PL’s, Suppliers, etc. to contribute to their “greenness” measures.
They cannot achieve their goals without the suppliers involvement and assistance.
Why LEED
43
Why We Went LEED Economic and Marketing / Branding Strategies (Items 4 & 5)
• Green practices showing financial paybacks & positive ROI In many cases must be willing to take
longer view than Wall Street ROI period of 2 - 4 yrs.
• Leveraging “Green” brand via marketing / PR Murphy gets far more “press” time
than a typical business its size – esp. at the national level.
Opens up a totally new avenue for marketing and sales penetration.
Why LEED
Top 50 Green Supply Chain Partners List Murphy has been listed since list inception 5 years ago
Why LEED
Why We Went LEED Branding Impact
Industry Recognition Placed upon Top 50 “Green” Lists
44
Why We Went LEED Branding Impact
World Trade 100 2012 Article Highlighting Murphy
“You can’t buy this kind of exposure”
Why We Went LEED Branding Impact
KARE 11 TV Richard Interviewed on Simply Science Feature Discussing Murphy’s Prairies and Stormwater
MN Pollution Control Agency Small Business Enterprise Newsletter Feature
Why LEED
45
Why We Went LEED Branding Impact
Business School Case Study on the Economics of Green Exploring Stormwater ROI Issue at Murphy
Why LEED
Why We Went LEED Branding Impact
Sierra Club Article 2,000+ word article for publication late 2012 Writer for the club contacted Richard based upon web research & networking and heard we were the company to contact!
Murphy Warehouse Company Has Long History with Green Initiatives
By Cassandra Hall
With over a century under its belt, the Murphy Warehouse Company has been a fixture of the Twin
Cities business scene for quite a while—and reinforces its commitment to stick around by investing time
and money into the latest green initiatives for their fleet of warehouses.
The Murphy Warehouse Company started in 1904 as a simple horse and buggy affair, hauling materials
off of paddle boats and barges; at one point they carried materials for building the St. Paul capitol.
Warehouses have always been part of, and grown with, the company. Now on their fourth and fifth
generations of family shareholders, and proud owners of five buildings out of their fleet of twelve
warehouses, the Murphy family continues to serve the Twin Cities area in third-party contract
logistics—that is, distributing people’s products when, how, and to whom they need them shipped. A
number of industries use Murphy Warehouse’s service, including the food, medical supply, paper,
industrial product, recycling, retail, beverage, and building material industries.
It is difficult to think of a thriving business taking the time to consider how their actions are impacting
the environment, especially when environmentally-conscious moves might cost money. On the
contrary, according to President and CEO Richard T. Murphy Jr., not only is Murphy Warehouse
dedicated to doing right by the community and the environment, doing so is not financially impractical
at all and actually makes a lot of business sense. To begin with, being environmentally-conscious is a big
part of listening and responding to clients’ needs for the future.
Why LEED
46
3873
724
0
500
1000
1500
2000
2500
3000
3500
4000
Typ. Warehouse / DC
Murphy Warehouse Bldg.
Only
Met
ric
To
ns
of
CO
2e p
er Y
ear
GHG Emissions MeasurementTyp. Modern DC
vs. Murphy Northtown DCMetric Tons of CO2e per Year
Toward Carbon Neutrality Murphy Northtown Fridley Facilities 500,000 sq. ft.
12.83% carbon emission vs. standard warehouse **
** Source: US EPA / US DOE Energy Star Program; 3873 GHG reflects an
average warehouse with score of 50. Murphy bldg’s scored 99 & 98
respectively out-of-possible 100 points, thus placing them in top 1% category.
GHG Emissions for Warehouses
Metric Tons of
CO2e per Year
3873
724
3149
Additional Emissions Reduction Measures
142
85
227
Toward Carbon Nuetrality
724
227
497
Total Additional GHG Emission Reduction
Actual Murphy Bldg. GHG Emissions
Total Murphy Additional GHG Emission Reduction
Net GHG Emissions (for a 406,000 sq. ft. warehouse)
Murphy Warehouse - Moving Toward Carbon Nuetrality
Typical GHG Emissions (460,000 sq.ft warehouse)
Actual GHG Emissions (Murphy's actual same size bldg.)
Emissions savings due to energy efficiency measures
On-site Carbon Sequestration in trees and prairie
Altnerative energy generation (Solar PV power)
100%
12.8%
724
-142-85
497
-150
-50
50
150
250
350
450
550
650
750
Murphy Warehouse
Bldg Only
Tress & Prairies GHG
Sequestration
Solar Power GHG
Reduction
Net Murphy Campus GHG
Metr
ic T
on
s o
f C
O2e p
er
Year
GHG Emissions MeasurementMurphy Northtown Campus
Metric Tons of CO2e per Year
November 29, 2012
Richard Murphy Jr. ASLA
President & CEO, Murphy Companies
Past President, American Society of Landscape Architects – MN Chapter (ASLA-MN)
Past Chair, Center for Transportation Studies (CTS), U of MN
Past Chair, Council of Supply Chain Management Professionals (CSCMP)
E-mail: richard@murphywarehouse.com
Murphy Warehouse Company Case Owner’s Perspectives
Greening The Grounds:
Finding Economic and Sustainable Returns In Supply Chain Logistics
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