ROCKLEDGE, Fla. — Bill Carey has been in the laundry business his entire adult life. Six years ago, he took over the helm at Space Coast Hospital Services, a not-for-profit hospital cooperative laundry.
Florida’s Space Coast region is midway up the peninsula along the Atlantic Ocean. Isolated between the popular tourist destinations of Daytona Beach and Ft. Lauderdale, the area has been heavily dependent on Kennedy Space Center in Titusville for its economic stability.
Close behind tourism and agriculture, the housing and construction industry had helped keep Florida prosperous for decades. The burst of the housing bubble in 2008 sent thousands of residents into unemployment and under-employment positions.
Right in the middle of the housing crisis, the announcement came that the space shuttle program would end and thousands from the Kennedy Space Center and supporting private contractors would be laid off. It was a financial double-whammy for the Space Coast region, to be sure.
So, here we are in 2012, with area foreclosures and unemployment still at record levels in a struggling local economy. What do you do to keep moving forward?
“Our mission is to help our hospitals reduce their cost of linen services,” Carey says. “If we don’t help them, somebody else will. We are operating in an extremely competitive environment right now, and we have to deliver.”
For-profit laundry operations are tasked with increasing earnings. Carey views the not-for-profit co-op’s goal as a cost center that needs to be reduced.
“It’s the main difference between the two types of organizations,” he says. “During my time working for the other guys, the motivation was always to increase prices, revenue and profit. Our goal at Space Coast Hospital Services is to reduce costs, which are then directly transferred to our client’s bottom line.
“Six years ago, linen replacement cost was the most significant laundry issue for many of our clients,” Carey continues, “so that’s where we dug in.”
A soil-sort system by Automation Dynamics is the heart of Space Coast Hospital Services’ linen management operation. Although the system is labor-intensive, the accuracy of the process raises efficiencies in other areas.
Bulk soil weight is entered for every cart of soiled linen that comes in. Linen proceeds down the sorting conveyor to operators who feed individual items into vacuum sorting tubes. The vacuum system separates and counts individual items. With item weights previously established by large-sample averages, the bulk soil weight is confirmed by the system to match the combined individual weights of the items sorted.
“We know exactly how many of each item each client returns to the laundry on every pickup,” Carey says.
From an observer’s perspective, the system is fast, efficient and accurate. The vacuum tubes are like the ones you see at a bank drive-in — but larger and faster.
“It can be difficult in co-op applications to get clients motivated to be more responsible with their linen,” says Carey. “Most co-ops, like us, use a common inventory to simplify production and inventory requirements. In a pool of 10 clients, each particular hospital’s improvement typically only returns 10% of their cost saving back to them, as any improvement contributes to the group as a whole.
“In a traditional co-op, it is difficult to validate problem areas, which can lead to finger-pointing within the group.”
Because of tracking accuracy, Space Coast’s clients have all of the advantages of a pooled inventory, but with 100% of their individual linen-management improvement savings added directly to their bottom line, according to Carey.
Proprietary software utilizes the returned-item information to build delivery carts on the shipping side of the plant. Every built cart has a bar-coded tag that is scanned after the cart is built and weighed. The software confirms that the bulk weight of the cart matches the total individual weights of the items listed.
Checks and double-checks within the system accurately identify and confirm the precise quantity of linen items that come in and go out.
“They get back exactly what they send us,” Carey says of his laundry’s clients. “If they want more linen, they requisition additional inventory, which is then added to their delivery and their individual cost.”
Tomorrow: How education and training lead to savings...