RICHMOND, Ky. — Looking for ways to create a more productive workforce? David Carter, senior sales engineer for Tri-State Technical Services, has a few pieces of advice.
Presenting during a webinar sponsored by the Association for Linen Management, Carter consolidated laundries into two types: stand-alone laundries in the business of generating revenue, growing a client base and establishing longevity in the marketplace; and laundries that function as departments or cost centers within a larger organization.
One webinar participant pointed out that a laundry also can be both: a departmental laundry that generates revenue for its larger parent entity.
“That’s a great point,” Carter says. “It’s often what happens in the laundry planning process. When you design and develop a laundry, there is often capacity that is being underutilized. And it allows the hotel or entity to leverage that asset, leveraging the staff to participate in generating revenues.”
TWO TYPES
Carter took webinar participants through a list of business operating characteristics, including the different management outlooks between the two types of laundries, as well as a customer profile, in which a stand-alone business seeks out third-party customers. Although a departmental laundry does not seek out third-party customers—its “customers” are internal, as in other departments within a healthcare center or a hospitality business—it, like a stand-alone laundry, is concerned with the delivery of high-level quality and service.
Carter also focused on the capital investment criteria.
“You, as a laundry director or production manager, when you actually evaluate your workforce, and you want to improve productivity and efficiency,” he says, “by adding a new asset, there are different capital-investment criteria that each of these types of laundries would consider.”
For a revenue-producing laundry, one would need to take stakeholders into account. These could take the form of corporate shareholders, partners or proprietors, Carter says, basically anything or anyone who would contribute a stream of capital.
For a departmental laundry, the capital investment criteria are strictly tied to reducing that department’s operating costs.
He pointed out that two capital-investment criteria are identical in both types of laundries: increasing productivity and improving quality, in both service and linen.
OPERATING COSTS
Another consideration when creating a productive workforce is to consider operating costs, Carter says. The top three are labor, linen replacement costs and utility costs.
Labor is typically the highest number, and linen replacement for a departmental laundry is “the asset that leaves and never returns. There is a physical loss associated with linens (and) that’s why it’s still the second cost in operating a laundry. Of course, with a customer-owned-goods (COG) laundry, there are no linen costs.”
With both types of laundry, utility costs, or what it costs to fuel the operation, is another major consideration.
Along with operating costs, a laundry will need to understand pounds and pieces—the poundage a laundry processes during a workday, and the quantity of items or pieces processed—in order to measure productivity and to set standards.
PRODUCTIVITY
Measuring productivity, Carter says, is a matter of calculating the pounds per operator hour (PPOH) that a laundry produces.
“This is a global evaluation of how effective your workforce is in your laundry environment,” he says. The formula is dividing the total pounds processed each week by the total number of employee hours to determine the PPOH. A higher PPOH means your workforce is operating at a more productive level.
“The idea of creating a more productive laundry operation has a lot to do with limiting the number of physical touches and times employees touch the linen,” he says. “Understanding that simple concept will drive a lot of your evaluation to create a more productive workplace.”
A laundry manager must do his or her homework to document an existing process and the results of that process in order to measure productivity and the true cost of that activity.
Identifying bottlenecks in every step of the operation—pre-process, process and post-process—is another important step in evaluating productivity.
“Once you have identified the bottlenecks,” Carter says, “you have to observe the activity and confirm the actual results over different time periods.” This allows you to know where production gaps may exist or if you need a better schedule for your employees.
Evaluating also will entail quantifying production results, and assigning costs to individual components of the activity, including labor costs, utility costs and even usage costs. Measure the production capability of each piece of equipment, as well as the production capability of the operators.
Identifying production best-practice benchmarks is another step in measuring productivity. This may entail a laundry director or manager going to another facility and observing and evaluating practices employed there. “Because your neighbor may have uncovered or established a process that may enhance your laundry production and create a more productive workforce.”
BENCHMARKING
Observations are key to establishing best-practice benchmarking, but it’s not the only thing you will need to do. Paying attention and analyzing data are keys as well. Identify areas for improvement, research and identify key factors to measure in these areas, and then determine if comparison data is already available. If not, you’ll need to ask or visit other facilities for the information.
Analyze the data and focus on the data that shows a process being performed at the lowest cost and the highest production efficiency. Determine if your laundry conditions can adapt to this particular practice, and then set steps to target a specific area that needs improvement.
“Once you employ a new process or a new practice, you need to understand that you have to continually monitor that process, you have to follow up, and you have to adjust,” Carter says. “When employees change, when equipment changes, when your linen type changes, it has an impact on your productivity. Keep that in mind.”
APPROACHING MANAGEMENT
Determining how much a new practice or process will save, as well as what it will cost, will be keys to approaching management, Carter says.
He says this step can be intimidating, but it can be done with a positive outcome. He suggests a few steps:
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Engage your organization’s financial management staff to assist. Create a team, and the financial analyst or staff accountant will often become invested in the process and begin to figure out ways to help you present the proposal in the best possible light.
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Outline the components of the company’s return on investment (ROI). Draft your outline and recommendations, and then share this draft with your financial team member.
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Finish the presentation in a concise and specific manner, and use your personal style. You are likely to be in a position where you will have to talk with management to lend a messenger to the document, Carter says, and they appreciate the personal touch.
When calculating the ROI, use a simple payback formula: divide the capital investment by the annual expense savings or the annual net profit your company will derive from the investment. You may also need to include how the asset will generate direct revenue.
WHAT’S NEXT?
Once you have the go-ahead for a new process or practice, including new employees or equipment, you will need to examine how to implement the new procedure.
Set the new employee-production standards, and review the new best practice with your employees. Communication is key, Carter says, so allow the employees to provide feedback.
Install the new technology, and then test that your new standard can be met. Training employees will give them the confidence they need to meet that new standard.
After implementation, document the results, and communicate the results to your employees and to management.
Carter suggests adding real-time production tracking systems in order to document the results. Most laundries that collect information manually will take days or weeks to complete an evaluation.
“As a result,” he says, “you may have lost profits or incurred more expenses than necessary. If you had reporting technology in place, you would have feedback on how well you’re doing on a particular process, on your standard and how productive your workforce really is.”
