First published in Frozen & Refrigerated Buyer Magazine May 2015
Store level programs can hide huge dollar losses from refrigeration leaks.
People often ask me to name the single most effective way to cut supermarket refrigeration leaks, based on my time heading up the EPA’s GreenChill Partnership.
My response usually surprises them: Your first priority should be to switch from an individual-store-based refrigerant management strategy to one that is centralized at headquarters. This switch produced a 10% reduction in corporatewide leaks in one GreenChill partner’s first few months in the Partnership. This partner had more than a thousand stores and this 10% reduction equaled at least 150,000 pounds of refrigerant. Multiply that by about $5.00 a pound way back then, and you get a cool $750,000 cost saving off the bottom line.
What do I mean when I recommend shifting to headquarters refrigerant management? Well, refrigerant management has historically been the responsibility of the individual store. In fact, Section 608 refrigerant regulations place the responsibility for record keeping and repair of leaks at the individual store level. That is the single biggest flaw in Section 608 and the reason it has largely been a failure in reducing and preventing harmful refrigerant leaks.
Headquarters management shifts the responsibility for refrigerant tracking, management, and strategy to a central person who has the responsibility for all stores. Just to be clear: this does not do away with individual store responsibility under Section 608. I would never encourage anyone to flout the law, even one that has as its only accomplishment the killing of trees in the name of superior record-keeping.
If headquarters begins managing refrigerants centrally, there has to be a system in place for individual stores to produce all records required under Section 608, should an EPA inspector ask for them. Centrally managing all required information on leaks greatly increases the likelihood that a store will be able to produce those records. If left to their own devices, individual stores rarely produce adequate leak repair records. The most likely response from a store manager when asked for refrigerant records by an EPA inspector is something like “I don’t have anything to do with that stuff.”
So how did a shift to headquarters management lead to such a huge reduction in leaks in such a short period of time in the example cited above? First of all, calculating a corporatewide leak rate for the first time usually opens the eyes of the top brass to the enormous amount of money a company wastes on replacement refrigerant. And that’s the key: the realization that the best financial path is to solve this corporatewide problem.
An individual store manager looks at refrigerant leaks as a cost of doing business. He or she is often unaware that something can be done about the problem, or if aware, doesn’t have the time to become a refrigeration expert to figure out how to solve it. The store manager’s job is to sell groceries. A person at headquarters who has been hired to tackle this problem would have the knowledge and the time that individual store managers lack.
Centralized refrigerant management leads to quick wins by focusing attention on the horrendous leak rates at some stores. From the perspective of the individual stores, these leak rates are probably considered normal. But a person who has the records for all stores sees that a small number of outliers make up a large percentage of the leaks. He or she can target those stores as the first priority. Sometimes sending out contractors to investigate the problem leads to the simple solution: finding and repairing the leaks instead of just topping off the refrigerant every month. If the problems are more complex, headquarters can allocate funds to tackle them in other ways, including investing in a new system if that saves money in the long-term.
$30,000 FINES PER DAY Centralized refrigeration management often alerts corporate officials to the potential legal liability from non-compliance with refrigerant regulations. At $30,000 per violation, per day, fines can be much more expensive than investing in better refrigerant management.
There are other examples of the benefits in switching to centralized refrigeration management, but they all boil down to the same premise: better companywide refrigeration management results in better companywide financial management. The environmental benefits are a pleasant side effect.