Pioneering a Portfolio Approach to Water Management with Walmart

By Kellen Utecht, Director of Sustainability, Phigenics

“Nothing is more useful than water; but it will purchase scarce anything; scarce anything can be had in exchange for it.” — Adam Smith

With California facing its worst drought conditions in its history, toxic algae blooms in Lake Erie, and water costs rising 33% since 2010, water’s value – both its actual costs and our perception of it – has been transformed since Adam Smith’s time. Companies today have a vested business interest in managing their water consumption. Since 2011, businesses globally have invested $84 billion dollars in water management projects.

logo-walmartGiven that water for cooling makes up a significant portion of a building’s water use, adopting a portfolio approach to cooling water management program is one way companies can make meaningful impacts in reducing water consumption and improving energy efficiency.

Phigenics, an independent water management company, works with leading companies in diverse industries such as healthcare, universities, hospitality and retail to optimize water use in the built environment. In one powerful example, Walmart – with a portfolio of stores spread across the United States – made significant reductions in its water use and utility expense by implementing such a program.

Fragmented Approach Driving Higher Costs and Water Use

In 2008, Walmart found an opportunity to improve the performance of its 180 water-cooled U.S. stores. These stores had no engineering support on-site and no remote monitoring of cooling system performance. In addition, it had 15 different water treatment service suppliers, each with their own vendor report forms, different chemical strategies and their own proprietary equipment.

Assessing its portfolio of stores, Walmart found a lack of both vendor oversight and a standardized approach to cooling water management. This resulted in excessive water consumption due to low reuse of water and slow response time to leaks; decreased energy efficiency; and decreased useful life of assets. Furthermore, because of lack of a reporting system and access to real-time data, labor was being spent on maintenance issues as opposed to optimization.

In 2008, Walmart partnered with Phigenics to develop a new approach to cooling water management. Recognizing that developing a strategy to reach water reduction and costs goals at each individual site would be both time and resource-intensive, Walmart took a portfolio-based approach in an effort to create a company-wide impact and greatly improve the efficiency of water use across its water-cooled facilities. For companies seeking to optimize the performance of its cooling tower operations, the below framework has been a winning approach for designing and implementing a portfolio cooling water management program.

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Water Management Framework

Gain Leadership Buy-in

 “We understand water is intrinsic to our mission of helping our customers save money and live better.” —Walmart Global Responsibility Report

The operation of cooling towers involves many different departments (more on this in the next section); without buy-in from a company’s leadership, getting support for a water management program may prove difficult. Corporate sustainability managers frequently cite two reasons to help build support for the design, investment and implementation of a program:

  • The first is the attractive return on investment through reduced operational and capital expenditures in its portfolio’s cooling tower operation; and
  • The second is a water management program’s alignment with existing corporate sustainability goals, such as combating water scarcity, being proactive stewards of water resources and promoting a healthy environment for consumers and employees.

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Water Management Program Team

Develop a Cross-Functional Cooling Water Management Team

Once a team secures buy-in from management, the program champion assembles a cross-functional cooling water management team. A team should include oversight by an independent water management expert and coordination with the local water treatment service representatives and water testing laboratories. Initially, the team develops an implementation plan based on the following steps and should meet quarterly to review progress. The program champion coordinates quarterly team meetings, monitors overall program progress and liaises with internal and external stakeholders.

Develop a Benchmarking Program

The program team’s first task is to develop program objectives and key results (OKRs). Some examples of OKRs used in Walmart’s program and those of other leading companies are:

  • Optimizing the useful life of capital assets – key results are conducting an audit, developing a remediation protocol and/or developing a maintenance plan for each cooling tower.
  • Reducing cooling water consumption by 20% overall and by 30% in water scarce areas – key results are increasing the portfolio’s cycles of concentration (i.e., how many cycles a tower can operate before flushing the system, aka blow-down), installing make-up and blow-down meters and wireless communication exchanges, and plotting the facilities on a water scarcity map to assess which face the greatest risk of water stress.
  • Reducing operation/cooling tower expense by 20% – key results are reducing the amount spent on water treatment/1,000 gallons; reducing water, sewer and energy costs; and negotiating with water utilities for evaporation credits.
  • Improve consumer and worker health and safety – key results include reducing and benchmarking quarterly positive tests for Legionella; and documenting achievements in hazard control.
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“We believe water is a location-specific issue, and we’ve made great progress in many water-sensitive regions. Walmart operates in 27 countries, all with varying levels of water stress, ranging from low to extremely high. We estimate that more than 20% of our operations are, or will be, located in regions facing high levels of water stress.” — Walmart

Create a Performance Specification

Once the program’s OKRs have been set, the team creates a corporate cooling water system performance specification, which entails setting engineering and operational requirements for your facilities personnel and contractors. Developing the specification enables the team to standardize operating practices and water treatment services. Key sections of a performance specification include:

  • Product and equipment specifications;
  • Water quality standards — e.g., source and quality;
  • Key performance indicators (KPIs) — e.g., cycles of concentration or water treatment cost per use;
  • Test methodology requirements;
  • Water treatment supplier requirements;
  • A summary of roles and responsibilities; and
  • A corrective action policy for noncompliance.

Develop Program Verification and Validation Strategies

A key step in launching a successful water management program is the development of verification and validation strategies.

Verification is the evidence that the plan is implemented accurately. For instance, if an organization wants to free up staff from some routine tasks so they can focus on higher-value activities, it can install water meters on its cooling water make-up and blow-down lines, to enable automatic monitoring of water consumption, which will inform your team if the plan is being implemented accurately.

Validation provides quantitative evidence about the effectiveness of the program. For example, take an organization seeking a quarterly snapshot assessment of its cooling water treatment plan. A team wanting highly accurate data and a minimum impact on labor would hire a credible third-party laboratory to benchmark its KPIs by conducting tests for typical cooling system efficiency metrics, such as cycles of concentration.

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Key Components of a Water Management Program

Make it Smart

At this point, companies need to evaluate whether or not to make the program “smart” (i.e., providing remotely accessible, real-time data). A smart program may include investment in:

  • A cloud based software platform specialized for cooling water management
  • A standardized system for automatic sensor monitoring;
  • Make-up and blow-down meters;
  • Secure wireless data communications; and/or
  • A standardized online service report for contractors.

By making the system smart, critical system sensor data is accessible and available to the team and other approved stakeholders through any Internet-connected device. The real-time data empowers the team to respond quickly to leaks and changes in water quality, while allowing it to utilize data analytics to enhance decision-making. It also assists in helping the team track progress towards operational OKR’s. For these reasons, Walmart made one of the largest investments in real-time monitoring equipment and software for cooling water systems.

State of Walmart Water-Cooled Store Operations, 2008 & 2015

State of Walmart Water-Cooled Store Operations, 2008 & 2015

Communicating and Celebrating Success

With the rise in awareness of water scarcity and the impact water has in people’s lives, an equally important step in this process is taking the time to engage with key internal and external stakeholders about the importance of managing water use. Quarterly milestone meetings, your company’s blog and social media channels are great opportunities to let others know about successes from your cooling water management program as well as highlight other opportunities for them to conserve water.

Clear Benefits for Walmart

Annual Gallons of Water Saved by Walmart's Implementation of the Portfolio Approach

Annual Gallons of Water Saved by Walmart's Implementation of the Portfolio Approach

Going back to our key example, Walmart, this portfolio approach represented a clear shift forward for cooling water management. Walmart is using data analytics to enhance its decision-making and drive accountability across its water-cooled facilities. Through the development and implementation of the approach outlined above, Walmart reduced water consumption by 25% per cooling tower, which equates to 660 million gallons of water and $4.4 million in total water and sewer savings portfolio-wide over the 6 years of the program. In addition, this approach increased the energy efficiency and useful life of Walmart’s assets.

Other companies can apply this proven approach to more responsibly manage facility water use across their portfolio of properties. This approach will help your company cut costs, reduce risk from shortages in water-stressed areas and further your company’s role as a water steward through communicating water and energy efficiency gains and best practices in smart cooling water management.

For more information regarding other best practices in facility water management, please visit http://www.smartwaterleadership.com.


EDF PhotoKellen Utecht is the Director of Sustainability for Phigenics. He is responsible for overseeing Phigenics’ corporate sustainability, engaging with clients on the topic of sustainability, and conducting key external stakeholder outreach. Kellen has a Master of Business Administration from the Walton College of Business at the University of Arkansas and Master of Public Service from the Clinton School of Public Service. He has served as a Sustainability Researcher and External Relations Committee Manager for The Sustainability Consortium, a Water Stewardship Researcher for WWF-Turkey and a small business development specialist for Peace Corps Bulgaria and the North Dakota Small Business Development Center. Kellen loves talking about water, data analysis and collaborative solutions. He can be reached at kutecht@phigenics.com.

Phigenics is an innovative water management company that was founded to optimize building water systems for safety and efficiency. Phigenics seeks to meet the increasingly complex needs of facility owners and managers to improve overall water safety, reduce operational (water, chemical, energy) costs and increase return on capital investments. Phigenics is focused on sustainability (water, energy, and worker and consumer health and safety) as a means for empowering its clients to be stewards of local water sources across their portfolio of facilities. It does this through providing guidance on best practices in water management via HACCP for Building Water Systems, developing metrics for driving accountability, and utilizing data analytics to enhance decision making.