Nike’s Net-Zero Ambition: They ‘Just Did It’
Before we put our virtual trainers on and take a breathless tour of Nike’s 1.5m sqm Court Distribution Centre in Ham, Belgium, some striking first impressions: whether it’s the plant decks breaking up levels of this vast, chic-looking silver behemoth, or wind turbines scattered around its perimeter, you’re immediately struck by its sustainable credentials. You can spot a line of trailers, but it’s a world away from your conventional logistics park.
These eye-catching touches gracing the sharply designed facility from Jasper-Eyers Architects, which opened in September 2019, are not to appease the environmental lobby but add the green gloss to a facility that runs completely on wind, solar, geothermal, hydroelectric and biomass power. While some companies deliberate how to embrace sustainability into their business, Nike has just done it, to paraphrase its famous slogan.
Located next to the Albert water canal in Laakdal in between Antwerp and Brussels with easy access to E313 Motorway, the Court Distribution Centre expands Nike’s European Logistics Campus, which opened in 1994 and today comprises six distribution facilities across Ham, Laakdal, Meerhout and Herentals.
In addition to highways, railways and highways, surrounding infrastructure includes a network of canals, enabling 99 per cent of inbound containers to reach the local container park by water. This eliminates around 14,000 truck journeys each year, reducing associated carbon emissions, and more than 95 per cent of waste generated on-site is recycled; pathways used by employees are made from recycled footwear material. Capping it off are 5,175sqm of offices, located on the south in the form of a two-storey building.
The campus coordinates all logistical activities between 200 factories and 200,000 shipping addresses. All Nike shoes and clothes that are sold in Europe, the Middle East or Africa, pass through the European Logistics Campus first.
The site comprises a high volume High Bay (30,566sqm) and larger Low Bay on the west side which spans 107,140sqm, as well as ‘Wings 1’, which opened in the first phase and incorporated three key points: Fossil-free operations, closed-loop flows to reduce the use of materials and a healthy and biodiverse environment with recycled materials (e.g. thermoplastic or composites from recycled polyesters, cotton apparel and foam).
The sustainable traits of the Court Distribution Centre started pre-opening. Compared with a traditional warehouse, the Court’s rack-supported structure required less steel and concrete, minimising waste and reducing material used in the construction.
The campus exemplifies Nike’s goal to ‘Move to Zero’ to reduce carbon and waste in the battle against climate change. Nike wants all power owned-and-operated facilities to be 100 per cent renewable by 2025 and is targeting a 30 per cent cut in carbon emissions across its global supply chain by 2030.
In the Low Bay and Offices, all ventilation is carried out through air handling units equipped with F7 and F9 filters, and heating and cooling batteries that keep humidity control between 40-70% per cent.
One of the most visually spectacular designs is the 1.3-km long green serpentine along the west façade. It provides 3,000 sqm of greenery which integrate usable spaces for the people, sun protection and hidden emergency routes.
Natural light is provided by many windows while a unique daylight capture system and smart, automated LED lighting help reduce electricity costs, environmental impact and provide a more productive workplace.
It continues to speed ahead on many sustainable fronts, diverting nearly all its footwear manufacturing waste from landfills, as well as more than 1 billion plastic bottles per year to create yarns for new jerseys and uppers for Flyknit shoes. The Reuse-A-Shoe and Nike Grind programs convert waste into new products, playgrounds, running tracks and courts.
It uses a Material Sustainability Index as well as indices for footwear, apparel, equipment, sourcing and manufacturing, to evaluate its products’ impact.
Back in 2016, Hannah Jones, Nike’s Chief Sustainability Officer and Vice President, Innovation Accelerator, was banging the sustainable and circular economy drum.
“Sustainable innovation is an engine for our future growth and a catalyst for revolutionising the way we do business,” she said. “We fundamentally believe the transition from linear to circular business models will accelerate our ability to create the future of performance products for the athlete.”
Digital Grows from Sustainable Foundations
Complementing the forward-thinking infrastructure is a powerful digital operation which enables the Court to serve all customers efficiently, regardless of whether they’re placing an order for one T-shirt or 10,000 trainers.
In terms of its channels, Nike is focusing more on direct selling to the consumer through Nike Direct (via nike.com), whose sales shot up 13 per cent in 2019, though selling to wholesalers in the US and internationally remains its primary distribution channel.
“Our new Court Distribution Centre represents Nike’s continued investment in a fast and flexible supply chain to deliver the full range of our product to consumers when they want it, where they want it,” says Eric Sprunk, Nike Chief Operating Officer. “This state-of-the-art facility will increase our responsiveness as we accelerate our digital growth and better serve millions of consumers across Europe, Africa and the Middle East.”
At the end of fiscal 2019, Nike operated 384 retail stores in the US. Of these, 217 were Nike brand factory stores, while 29 were Nike brand inline stores. Internationally, it operated 768 stores outside the US, of which 648 were Nike factory stores and 57 Nike brand inline stores.
Nike opened its third House of Innovation in summer 2020, at the historic 79 Avenue des Champs-Élysées in Paris, in a bid to harness digital when serving consumers, following similar launches in New York and Shanghai. Again, the store is underpinned by sustainability, with 85,000kgs of sustainable materials used in the designs and displays.
Its digital market strategy is supported by effective adverts, which play on the emotional benefits of products, and its Instagram account (122 million followers) champions gender and racial equality through inspirational video stories and posts.
Rise in ‘Green’ Warehouses
Sustainable warehouses are not new. Developers have promoted them for at least the last 15 years; for example, Gazeley launched its eco-template in 2003, according to a JLL Logistics Buildings of Tomorrow report (see ‘Examples of green warehouses in Europe’ table). But in a digital and sustainability-conscious era, their time has come again.
“Over the next 5 to 10 years and beyond, we anticipate growing demand for green warehouses, including net-zero carbon buildings as major companies make commitments on carbon emissions,” it notes.
Three-quarters of the major occupiers it contacted either ‘strongly agreed’ or ‘agreed’ that reducing carbon emissions associated with their warehouse operations was very important. More broadly, 937 companies are taking science-based climate action as part of the ‘Science Based Targets’ initiative, which is part of the wider “We Mean Business” coalition.
“We would expect these companies, and others with similar commitments, to be among those most likely to drive demand where they have relevant facilities,” it adds.
Net-zero carbon buildings are based on a ‘whole-life’ approach and have been defined as ‘when the number of carbon emissions associated with a building’s embodied and operational impacts over the life of the building, including its disposal, are zero or negative.’ It encompasses building construction, operation, end-of-life and beyond end-of-life scopes.
Engineering skills gap challenges UK electric vehicle market
Original equipment manufacturers (OEMs) are hurrying to design and develop electric vehicles to meet the evolving regulatory deadlines. The race to do so while meeting the high consumer expectations for new products is an immense challenge – exacerbated by a shortage of key engineering skills in many national workforces.
The emergence of new engineering skillsets and capabilities needed for new automotive product introduction risks hindering the move to electrification. If unresolved this could result in failure to meet their fleet CO2 targets set for the coming decade – including the ban of all petrol and diesel car sales in the UK by 2030.
The technological transformation of cars into computers – powered by electric batteries – has created demand for a parallel transformation of the automotive engineering workforce, and a pressing requirement for new skills in software and battery engineering.
The skills of the moment
There is a huge and growing need for tech talent. In the UK alone, programming and software development jobs are growing 7.3% on average every year, and these tech roles are amongst the most in-demand jobs. Design and development engineers from either the mechanical or electronic domain, who can also programme, are the new trend. The car of the future relies heavily on programming languages such as SQL, Java, C++, and Python for development of their embedded systems and tools used in their validation. The most highly sought-after talents are those individuals who have blended to become a multi-disciplined hybrid of several specialities.
Manufacturing also demands IT skills due to the digital transformation of the production and supply chain environments. It is now heavily reliant on Edge machine-level data processing, with cloud integration of shop-floor assets (such as robots, measurement, optical recognition, machining centres etc) all connected together with visualisation and big-data analytics. Availability of Artificial Intelligence and Machine Learning expertise becomes a limiting factor to organisations seeking to make real-time cloud-managed decisions governing quality control, predictive performance and optimise asset utilisation.
The trend to Model-Based System Engineering methods is a significant benefit to product development cost and time to market. Recruiting sufficient Computational Analysis Engineers (CAE) for system dynamics, fluids, structures and acoustics, fatigue and forming technologies, is a challenge. Computational fluid dynamics (CFD) engineers, in particular, have an essential role in EV development: to evaluate the thermal strategy for the battery architecture and integrated cooling systems, with the mission of keeping the car functionally safe and reliable in all conditions.
Closing the gap
The top drivers of the skills gap reported by employers include strong competition for skilled candidates, a shortage of applicants with appropriate qualifications, and a lack of awareness among young people of the educational routes into engineering occupations. The development goal and long-term solution is obvious: to get more people into studying engineering and widen the diversity of this talent pool. Recent UK Government initiatives are already showing some positive impact on this challenge:
- Significant changes in GCSEs with promotion of single-science options has led to a 17.3% increase in take-up rate of Physics
- A-level entries are on the rise for most STEM subjects – take-up of A-level Mathematics continues to be particularly high, making up 12.0% of all entries
- High proportions of international students, especially from India and China, are studying engineering and technology in the UK, particularly at taught and research postgraduate levels (67.7% and 59.3% of entrants respectively).
Universities are adapting to supply the future talent for the electrified automotive industry, many now offering combined degrees in mechanical and electrical engineering with dual accreditation. Degrees in Controls and Systems engineering are also gaining in popularity, teaching future engineers to work on holistic problems where there are conflicting needs and complex interactions. Given the time it takes to train a new engineer and for them to become effective in the workplace, the sector is therefore challenged to wait for this influx and mobilisation of in-demand skills to be realised.
Instead, focus turns to being ‘employer of choice’, and companies aim to attract the highest calibre new hires to staff their teams. Despite the distraction to business continuity due to COVID-19, there is no time for complacency regarding the employee culture. The most highly skilled (especially in ADAS, functional safety, system controls, CFD, electromagnetic and power electronics) can literally cherry-pick their next employer with ease, aided by the transparency of website platforms like GlassDoor and LinkedIn.
Partnering on development
Onboarding of software and tools can significantly help alleviate the engineering skills gap – by embedding know-how, others have developed into their digital multi-physics offerings. Engineers can be assisted in getting the workflows and design rules right, creating an immediate and tactical solution to ease the product development challenges.
We can also seek collaborations and technology partnerships by working with specialist service partners locally and globally in a new ecosystem. The ability to achieve the leap to develop IP, leverage experienced resources for global teams, and offload the risks associated with finding and training the skilled engineers in-house – often gives the best of both worlds.
The unprecedented pressure on the world of engineering to develop new EV models will require collaboration on a new scale. While many countries are pushing to grow and diversify the engineering workforce, the skills gap needs to be closed now to avoid disruptive delays for the global market. As a central part of the evolution to e-mobility for our customers, the urgency of this task is starkly clear, and encouraging novel partnerships to close the skills gap will be vital to ensure our industry meets this historic goal.