Content about Major

Healthcare Laundry: Scott Beaton, Kaiser Permanente Northern California

There are two major differences between institutional and commercial rental laundry plants regarding laundry processing equipment and operational procedures. The overarching difference is that each must serve a different master.

One is customer-based, high-volume, and driven to make a profit, while the other exists to provide a service for a captive audience. Due to these differences, the degree of necessary automation varies substantially.

The other major difference is that commercial/rental plants wash and process linen to meet the needs of both regulatory and customer-based demands. They deliver linen in a manner that guarantees and produces a positive net operating margin. This is driven by the fact that they are in business to make a profit.

Rental laundries typically spend more on their equipment, training and education of their workforce than an institutional facility. Pounds per operator hour, or PPOH, become the mantra. The old adage “time is money and money is time” comes to mind. These large, high-volume shared-service laundries and commercial plants tend to be highly automated, with batch washers, shuttle conveyors and pass-through dryers greatly reducing manual-labor requirements.

Commercial rental operations realize quickly in this competitive, price-point-driven market that financial investment and reinvestment is key in both manpower and equipment. This must take place to be competitive and sustainable in an ever-changing business climate.

A rental plant usually realizes that it takes a financial investment to achieve an efficient operation and, as a result, spends money to make money. Institutional laundries would benefit greatly if they would also utilize this model and invest in their infrastructure to best serve their internal customers.

Chemicals Supply: Marlene Williams, Anderson Chemical Co.

As a chemical formulator, my comments will focus on procedural differences between institutional and industrial laundries. Institutional and industrial facilities both launder linen, but the purpose and focus of each is in response to different expectations.

Institutional laundries provide a service within organizations. Industrial laundries are typically focused as independent businesses. This results in different orientations, chemical programs and procedures.

Major concerns for commercial laundries include optimization of production orientation. This would include labor and labor cost as a percent of revenue, utilities, water and chemical costs, production cost per machine, and overall profitability.

Formula times and rewash numbers can be well balanced to provide optimum profit. Hot water, high alkali, and bleach can provide lower pounds of rewash, but at the expense of linen integrity.

Major concerns for institutional laundries include: maintaining facility par, quality of results depending on potentially lower water temperatures, machine programmability, correct choice of program, and chemistry.

While most institutional facilities have well-trained staff, problems can arise when machines and chemical supply malfunction if a staff person does not make timely corrections. Because of a lesser focus on cost per piece, spotting and special pretreatments or machine formulas may be utilized. The luxury of time for rework and special formulas can result in higher volumes of good quality work without the expense of fabric damage.

Linen Supply: Stephen Marcq, General Linen Service

I see substantial differences between equipment and procedures in commercial vs. institutional plants. In commercial plants, for example, it is common to see newer, larger, more energy- and water-efficient machinery, i.e. continuous batch washers vs. smaller washer-extractors, six-roll ironers vs. one-roll, and so forth.

It is more common to see things like heat reclamation and water treatment equipment, as well as use of steam vs. thermal oil, electric and so forth on ironers. The reason is likely because the commercial plant can typically gain economies of scale, lower the per-unit production costs and thus generate a sufficient return on investment on the large up-front expense, although available space also has something to do with it.

The biggest procedural difference I see is that many institutional plants, by their nature, do a larger number of small loads, turning product sometimes several times per day, whereas a commercial plant may have one machine dedicated to a specific item operating eight hours or more daily.

The institutional plant often can customize the finishing procedures and requirements to the exact specification required, whereas the commercial plant has to find some middle ground to suit its mix of customers.

Commercial Laundry: Tom Gildred, Emerald Textiles

Differences in equipment and procedures between a commercial laundry plant and an institution-based laundry are substantial and exist for a variety of reasons.

The equipment in a commercial/rental plant is usually larger in scale and capable of processing huge amounts of volume (pounds) per hour. In newer facilities, or those that invest in newer equipment, tremendous energy efficiencies are achieved that result in energy and water savings. This positively impacts the environment and reduces operating costs.

Equipment in an institution-based laundry is smaller in scale and handles wash loads of lesser volume. In-house laundry facilities sometimes occupy revenue-generating space that might otherwise be used for additional operations within the organization.

Processes and procedures in a commercial plant are typically more automated, so less labor is required to process the laundry. This improves efficiency and decreases the risk of strain and injury to employees. Another difference in a commercial facility is rental pool linen. Large rental pools require fewer linen purchases on a regular basis and offer a consistent, flexible supply of product to all customers as needed.

The chemical mix in a commercial plant is also handled differently because of the opportunity to use each pocket in a continuous batch washer for specific purposes with specialized chemicals. This allows the precise timing, titration and temperature required to achieve the highest levels of cleanliness.

Handling larger wash loads also allows for the production team to run the same products through folding or ironing consistently, which improves efficiencies lost when switching the products that are being processed.

Finally, the focus in a commercial laundry operation is generally specialized and, because of its scale, designed to comply with OSHA, Title 22, and state and federal regulations.

In an institution-based laundry facility, processes are typically labor-intensive, and require more employees, because they are less automated and staff may or may not be assigned exclusively to the laundry function. Since the task of laundry is usually just one aspect of operations in the organization, it may be more difficult to be focused on compliance, efficiency and quality control.

In part, some of the reasons for these differences exist because of specialization as well as the scale and volume of each type of laundry facility. There are economies of scale realized when a commercial plant is focused on processing linen for multiple large healthcare or hospitality customers, vs. operating a laundry department in-house to process only the linens needed by that organization.

Uniforms/Workwear Manufacturing: Steve Kallenbach, American Dawn

Typically, the equipment and procedures in processing textiles is about the same—whether in a rental laundry or an OPL (on-premise) hospitality or healthcare laundry—but does depend on the volume/poundage of each facility. When it comes to boilers, heaters, reclaimers, sewage treatment, washers, dryers, tunnels, ironers or presses, the equipment manufacturers supply our industry as one. And the chemical companies typically use formulation based on textile/application/poundage vs. market.

While one would think that the processes for these two business channels are equally alike, there are many different practices, based mostly on profitability and/or quality expectations.

The rental channel always has two common goals: growth and profitability. They are sometimes in opposite order, but always present together. This becomes a delicate balance between efficiency and quality. To illustrate, let's look at linen napkins.

A rental laundry typically wants to achieve acceptable market standard quality at the lowest cost. It’s in the business of making profits through textile rental, and therefore measures every microbe of wear life, processing cost, merchandise field recovery, and total merchandise costs (including acquisition) all the way to electricity and building costs.

In comparison, an OPL must maintain the internal (typically single-department customer) quality standard, and is part of a much bigger picture (a small department of a large enterprise). Its building, energy and overhead costs may be charged by estimate or calculation to the whole. Additionally, its quality standards are typically set by one of the other departments that it serves, are not negotiable, and are expected to be maintained, without as much weight given to cost.

The sheer difference in service dynamics and accounting in an OPL drive fairly significant differences in labor management, water/energy/chemical management, textile selection, and inventory management (which typically doesn’t fall under the control of the OPL), all the way to formula times, pressing speeds, and water temperature/steam use.

Additionally, because the perceived quality of OPL customers (key departments) is allowed to be as high as requested, much more finishing (such as pressing vs. tunneling) occurs.

Material handling and delivery also differs between the two types. An OPL typically delivers the goods to another on-premise department (i.e. Guest Services) using carts, rails and perhaps a small vehicle — and goods are many times picked up by the department being serviced. A rental laundry has many more carts (for separation by route/customer) as well as sort railing and numerous route trucks for delivery within a large geographical area.

Numbers will tell a big story here, and both have their place in the textile services markets. Cases can be made in either direction as to what is most efficient and profitable for the enterprise.

Tomorrow: Answers from the textile/uniform rental, consulting services, and equipment manufacturing sectors...

SCOTTSDALE, Ariz. — A Northeast/Mid-Atlantic regional textile services company owner and the retired chief executive from one of the industry’s major chains received the Textile Rental Services Association’s (TRSA) highest honor at its Annual Convention & Exhibits recently.

The presentation took place at a ceremony that bestowed several accolades on member companies and individuals.

Recognized with the Operator Lifetime Achievement Award for their service to TRSA and the industry were:

• Patrick J. Dempsey, chairman, Dempsey Uniform & Linen Supply Inc., based near Scranton, Pa., serving that state as well as New York, New Jersey, Maryland, Delaware, West Virginia and Virginia.
• Lawrence “Larry” Steiner, retired chairman & CEO, AmeriPride Services, headquartered near Minneapolis. He is the third- generation leader of a family company that’s grown into a multi-national organization operating more than 150 production facilities and service centers throughout the United States and Canada, serving 150,000 customers.

Runners-up were Ed Darling, ARAMARK Uniform Services; and DeNeal Feldman, Economy Linen & Towel Service, Dayton, Ohio.

The Maglin Biggie Lifetime Achievement Award, TRSA’s highest honor for an associate member, went to Mark Brim, president of Brim Laundry Machinery Co., Dallas. He’s the second-generation owner of a company that builds washer-extractors, dryers, shuttle conveyors and touchscreen controls.

Jeff Frushtick, Leonard Automatics, Denver, N.C., was runner-up.

ARAMARK Uniform Services, Burbank, Calif., received the SafeTRSA Innovation Award for its access-control technology designed to prevent wash aisle accidents. Runners-up were Cintas Corp., Mason, Ohio; and Linens of the Week, Washington D.C.

Winner of the LaundryESP® Innovation Award was Roscoe Co., Chicago, for its plant renovation that achieved exemplary savings in the use of water, energy and other resources. Runners-up were ARAMARK Uniform Services, Chicago; and California Linen Services, Pasadena, Calif.

Volunteer Leadership Awards were presented to Bill Hermanns, W.H. Linen Supply Co., Clifton, N.J.; Steve Kallenbach, American Dawn, Compton, Calif.; Matthew Kartsonis, Superior Linen Supply Co., Kansas City, Mo.; and Mark Lewis, Dempsey Uniform & Linen Supply.

NEW YORK – Manufacturers of laundry machinery, textiles and chemicals reported renewed interest in their products from the hotel industry at the 96th annual International Hotel, Motel+Restaurant Show (IHMRS) here in November.

Exhibitors at the Jacob Javits Convention Center on Manhattan’s West Side expressed satisfaction with increased foot traffic at the show. Attendance peaked at 23,953, up 2,800 from the previous year, including managers and executives from major hotel chains and independent properties, according to show management.

The show provided manufacturers of textiles and formulators of chemicals with an opportunity to tailor their products to the hotel industry.

Standard Textile Co. targeted the high end with a new line of sheets, dubbed “Luxury That Endures,” developed in collaboration with Todd-Avery Lenahan, a hospitality designer. Pre-laundered and room-ready, the sheets are designed to withstand the harsh environments of central laundries. A high-end visual appearance combines with a tensile strength of 117 pounds to create a more durable luxury product, according to Greg Eubanks, group vice president for hospitality sales and marketing at Standard Textile.

“The traffic and interest at our booth has been fantastic,” says Eubanks.

Several manufacturers, among them Riegel and Cintas Corp., exhibited new earth-friendly, eco-conscious products for the hotel industry.

Riegel, a division of Mount Vernon Mills, drew interest with its RieNu line of recycled polyester table linen, made from recycled plastic bottles, otherwise destined for landfills. The use of one of its table napkins eliminates three plastic bottles from landfills, the company says. Riegel offered the table linen in five colors at the show.

“We believe there’s a great deal of pent-up demand in the hotel industry,” says W.H. Rogers, vice president of Riegel. “We’re hoping that will be reflected in the new budgets for hotels in 2012.”

Cintas was among 10 exhibitors who received Editors’ Choice Awards during the opening ceremonies at the show for best new products within the categories of design, equipment and supplies, and green guest amenities. The company was recognized for its Eco Cobra Jacket, an eco-friendly garment option for bellmen, doormen and other front-door hotel professionals, and the latest product within the company’s EcoGeneration™ collection.

Cintas also drew interest with the industry’s first machine-washable tuxedo, which is partially composed of recycled polyester, made from recycled plastic bottles. The company partners with Boardroom Eco Apparel and its mills to take discarded plastic bottles and transform them into recycled fibers. The process breaks bottles down into flakes; from those flakes, a filament is extruded, which is spun into yarn. The plastic-formulated yarn is then woven into a fabric to create the tuxedos. After use, the tuxedos can be tossed into a standard washer and dryer. The company estimates that the machine-washable tuxedos can save hotels up to $1,000 per employee annually.

The hotel industry is also demanding a broader palette of colors in table linen for its facilities, according to Elizabeth Barrett, associate brand manager for Procter and Gamble, makers of the color-safe Tide Professional Laundry System. “There’s definitely a trend toward the use of more color,” says Barrett.

Ecolab, a maker of laundry chemicals, also attracted an increase in floor traffic at the show. “This show was much better than the show two years ago,” says Jim Moore, assistant vice president for corporate accounts. “We’ve met with hoteliers from all over the world.”

Mercedes Benz USA, a Daimler Company, made its first appearance at the show with an exhibit of three vans, including the Sprinter Cargo Van. The diesel-powered van offers payload capacity of up to 5,358 pounds, 547 cubic feet of cargo space, and a standing height of 6 feet 4 inches.

The IHMRS will return to New York on Nov. 10-13, 2012.

Click here for Part 1.

An AmericanLaundryNews.com exclusive.

CHICAGO — If one has never designed a laundry or been involved in such a process directly, they should make a concerted effort to locate someone with that expertise and experience to accomplish such an effort.

Not only must one never assume they know the ins and outs of laundry design and operations without direct or indirect experience, they and those responsible for such entities should never assert that they are even remotely qualified to manage such a process.

Laundry design requires expertise in facility management, construction, interior design and lighting, textiles, chemistry, electrical and mechanical engineering, plant layout, distribution processes, safety, support systems, and laundry systems.

And this expertise should be coupled with the ability to write performance-oriented specifications that will virtually guarantee a customer’s equipment and building support systems, as well as infrastructure, meet all parameters specified.

You would assume that anyone in such a position of responsibility would have a sound knowledge base of available systems and a true understanding of the process to achieve design and operational goals. But true expertise in our industry is becoming less and less apparent.

Some of this is driven by the industry we serve, as top management hires those who are not competent. They select individuals to serve in the roles of industry advisers when they, in many cases, don’t have the résumés to fill the expected prerequisites, i.e. the “good ole boy” scenario.

It continually amazes me that our industry seems to place itself in a mode of being somewhat irresponsible. True, many folks could learn on the job, but where are the advocates and trainers who are qualified to take the lead and teach without prejudice to a certain process?

Industry seems to enjoy allowing untrained folks to reach for the top without fully appreciating the potential negative impact. If a person is placed into a position of authority and then speaks or acts in error, the risk of damage is huge.

I encourage you to express your objections to editors of periodicals, federal inspectors or accreditation reviewers about what may be contrary to the issues at hand. For example, when someone whose operation has been cited for a violation poses a question about laundry chemistry, how much do they really want to hear about equipment or operational techniques that have virtually nothing to do with their situation? Let yourself be heard.

(And if you are a so-called expert in purchasing processes, don’t confuse your experience with the qualifications needed to be an expert in laundry design and operations.)

Sit back and ask yourself, how does my ability—or inability—to support major efforts and to meet deadlines impact my co-workers, my organization, and my customers?

An AmericanLaundryNews.com Exclusive

CHICAGO — I continue to be astonished at the lack of etiquette regarding use of the cellphone, a device that has become commonplace in the workplace. No matter if you are in an office, the airport, a social environment or just sitting down with your family at dinner, you should show common courtesy and follow proper etiquette.

I heard recently on a national TV show that experts seem to think cellphone use will soon be the major cause of divorce or relationship break-ups. Think about it: during the day or evening, how many times do you break the 10 cellphone etiquette rules that I have listed here?

1. Lower your voice when talking on cellphones in public. Observe the 10-foot rule; if someone is within 10 feet of you, move to a different location to create some space between you and the other person. Use the technique practiced in the Orient: cup your hand over your phone and mouth when talking on your cell.
2. No one, I repeat, no one wants to hear your personal business or issues, so avoid talking about those topics when others can listen in.
3. Avoid taking cellphone calls when you are speaking with someone face to face, unless you think the call you’re receiving may be related to an emergency. In that case, ask the person with whom you are speaking to excuse themselves, or ask them if it would be OK if you took the call.
4. Avoid texting during face-to-face conversations or during conference calls (believe me, this happens). FYI: Others can actually tell if you are texting.
5. You’re using a cellphone, not a landline, so be mindful of the technology. All cellphones have latency, which means there is a delay—some greater than others—when you speak and others hear you.
6. Avoid leaving lengthy voice mails. Simply leave your number, the time of your call, and the issue you’re calling about (be brief).
7. Place your cellphone in silent mode if you are at a conference, theater or restaurant. If you are having dinner with your family, turn it off!
8. Drive now. Talk later. Multitasking isn’t always a good thing. Evidence shows that accidents are on the rise due to cellphone use. Most calls can wait until you’ve reached your destination, and if a call is upsetting or distracting, pull over to have the conversation.
9. Use common sense. Turn off your phone before a job interview, presentation or boardroom meeting. Leave it off at funerals, weddings or anyplace where a quiet atmosphere is mandated, such as a courthouse, library, museum or place of worship. Do not talk on your phone when you are in a public restroom.
10. If you walk around at work or at a trade show with a hands-free device attached to your ear, you impress no one (except maybe an alien who is observing and laughing from afar). Hands-free devices should be used at times when you don’t have the ability to pick up or hold your phone, such as when you are driving a vehicle. Do not engage anyone in a conversation when it seems you are wired to places unknown; this is very distracting.

When it comes right down to it, proper cellphone etiquette is just a matter of being considerate of others.

COMPTON, Calif. — Infection control might be on everyone’s radar, but it is just one factor in recent changes to healthcare apparel. Peter Menaker, regional sales manager for textile manufacturer, distributor and importer American Dawn, says there are other factors driving changes in the textile industry, too.

Menaker briefed laundry processors and linen distributors during an Association for Linen Management-sponsored webinar, Changes in Healthcare Apparel.

For healthcare workers and laundry managers, infection control can be a major concern.

“As of June 2010, Centers for Medicare & Medicaid Services stopped reimbursing for the costs of hospital-acquired infections,” he says, “so it became more important for healthcare facilities to make sure there are as few hospital-acquired infections as possible.”

Production Costs

Along with anitmicrobial treatments and patient satisfaction (see Part 1), another major driving factor that Menaker addressed is the cost and availability of cotton and the price of gasoline, both of which are of great concern to the textile industry.

Polyester, made with oil byproducts, has become an acceptable alternative to cotton, although the high price of oil could temper a large-scale shift. Polyester can now be engineered to be more like cotton, wicking away fluids and feeling soft against the skin. The textile industry could be, despite oil prices, heading toward using more polyester in reaction to the instability in the cotton crop.

Policy Changes

Most healthcare facilities are implementing new policies and procedures in light of the driving factors changing the face of healthcare apparel. All of the participants polled during Menaker’s webinar have experienced policy changes related to isolation-gown use, for instance, according to the webinar moderator.

“I think we are seeing new and stronger policies and procedures from our infection control departments,” he says. “I was talking with one laundry manager, and he let me know that they’re now doing pre-admission screening on every patient that’s admitted to their long-term care facility.”

The screening is to ensure that people being admitted are not contagious, carrying one of the antibiotic-resistant diseases such as MRSA (methicillin-resistant Staphylococcus aureus).

Another response involves designer patient apparel, Menaker says.

“I expect that with the feels-like-home textile lines that we’re seeing, that more and more like-home fabrications and designs may come into play in patient wear, and in other textile products, too,” he says.

Hospitals also are implementing initiatives related to identification of patients prone to falling. While this doesn’t sound like an issue for laundry personnel, it can be, since certain types of patient gowns may be issued to assist hospital personnel.

“A number of textile products are out on the market now to help to identify the patients in the hospital who may be prone to falling,” Menaker says. “One is the patient gown.”

Bright colors such as yellow or red are being used as identifiers.

“I’m sure (you laundry managers) have experienced a little angst with exactly how do you fully process a bright red gown to make sure it doesn’t turn all of your white linens pink,” he says.

Brightly colored socks are also being used to distinguish fall-prone patients from others. “And you can see on the soles of these slippers are non-skid treads to help prevent the falls.”

Nurses are entering the picture as well, through their ability to adapt garments to meet a patient’s needs.

“Nurses have always been fairly competent at providing themselves with what they need, even in textiles,” Menaker says. “Before the advent of the IV gown with the snap sleeve, nurses were very good with splitting the sleeves to get gowns changed. So they’ve seen now, with more people having IVs, that IV gowns are coming more into use.”

Half of those participating in Menaker’s webinar indicated that they have seen a change in their facilities as to where scrubs are processed. He noted that a home-laundering program for scrubs invites the possibility of outside contamination. “If the scrub were able to be effectively treated so that any germs on the scrub were killed before the scrub left the hospital, that would make sense.”

Most facilities are not enthused about going to a home-laundering program, he believes. “I wouldn’t imagine that it’s something that’s going to catch on in a big way, but again, the studies still have not been done to determine if that would make sense or not.”

Play a Role in Change

Clinicians are the ones to decide what level of protection they require against the possibility of hospital-acquired infections.

“Risk management and infection prevention, we’ve seen both of these (relatively new departments) making changes. They recommend and implement the policies and procedures of the hospital,” Menaker says. “And, also, we as laundry processors, we’re certainly involved in these changes in textiles. We’re tasked with processing anything new that the staff have decided they need. “

Unfortunately, Menaker says, the laundry processors are often brought in after a decision and with the policy already headed toward implementation.

“We need to make sure that an infection preventionist, and now a risk manager as well, are included on the linen committee, and that we get a chance to raise our hands and have input,” he says. “Because anything they decide won’t be any good after it cycles through the laundry if it can’t be processed properly.”

Whatever decisions are made, Menaker says, it’s important to have a dialogue and options to talk over with the people who are looking to implement a change.

“I think we are seeing more and more changes, and I think we will continue to,” he says.

Click here for Part 1.

CHICAGO — Having received numerous requests for newly revised information on this subject, I have reviewed the volumes of information obtained from both healthcare and hospitality laundry operations worldwide for 2009-2010.

I did my best to convert foreign cost to U.S. cost—both are changing rapidly—and discovered that our foreign counterparts were slightly more cost-efficient and, due to exchange rates, getting more production for the dollar simply due to the value of certain currencies.

There could be numerous explanations, of course, but the primary reason was the vast difference in labor and fringe benefit cost in our country vis-à-vis other foreign locations, primarily those in Europe, the Far East and Africa.

The basis for this analysis was to determine benchmark alignments once various currencies were adjusted to match the U.S. dollar. Both higher and lower extremes in costing for each element were evaluated for accuracy. A group of independent accounting specialists who volunteered its time was utilized to draw the various conclusions reached in the report. Foreign laundry experts assisted in the translation of some information.

Throughout the process of validating accuracy of the data provided and drawing comparisons, the identity of each facility remained confidential. Each facility was simply referred to as a number or letter, depending on the type of operation: healthcare or hospitality. For those with a combination of tasks, every effort was made to categorize each element.

Every facility that supplied information has done so every year since this review began 12 years ago.

2009 Forecast on Target?

As analysts, consultants and various levels of internal management continue to complicate laundry operational cost scenarios, it is apparent that laundry and facility managers, as well as top executives with a renewed interest, require a cost benchmarking rule of thumb that will assist them in selling their operations, i.e. justifying new systems or a new facility, obtaining new customers and, probably most important, comparing variable cost that should influence decisions to continue in-house operations or examine outsourced management, operations, linen rental, transportation, etc.

Institutions that hire consultants to review certain aspects of a facility’s operation should continue to rely on internal expertise and experience, I believe. The institutions should also ensure that the consultants selected are experienced in reviewing similar operational elements. A consultant with expertise in energy management, for example, may not be qualified to review laundry operations, production or textile distribution.

It is quite apparent that large laundry and linen-rental consortiums that deal specifically with healthcare markets are becoming more competitive. Based on recent information, cost seems to be leveling out to some degree, with the exception of the impact of high cotton and polyester costs and, most recently, fuel cost.

My 2009 forecast that total cost of operations may reach $1.10 per pound processed/delivered by 2011 seems to be on target. The rising cost of healthcare insurance benefits enacted as a result of healthcare reform will dramatically increase the cost of operations, i.e. internal cost and associated product (chemicals, textiles and laundry equipment purchases).

A review of more than 400 healthcare and hospitality laundry facilities located in the United States and 14 foreign countries with operations of varying degrees of efficiency reveal the following benchmark costs (in U.S. dollars) that should be deemed most efficient on the average, even though most every facility demonstrated opportunities to reduce cost, especially in labor-sensitive areas.

Most important to note in this analysis were the plans to reduce labor and utilities cost related to sorting, washing, drying, conveyance, and flatwork feeding and finishing. These facilities also reported that major efforts were under way to reduce textile-replacement cost through standardization and life-cycle determination efforts, i.e. examining best value over lowest cost for an item.

Other major components under review seem to drive at lowering chemical cost by conducting actual comparisons and focusing on the customer service elements and control systems that are so critical to this facet of the operation.

The primary variable between healthcare and hospitality cost was certainly interesting. Hospitality was higher on the average, which was expected, with the average variance being between 4 and 6 cents per pound processed. This was mostly attributed to the higher quality/cost of textiles acquired, which is significant. Other facets of discovery revealed that operational cost of healthcare and hospitality operations were similar in all other areas.

Production Cost Benchmarks

Processing Cost: Direct labor costs, including fringe benefits (health insurance, retirement, etc.), which are applicable to the receipt, sorting, washing, drying, ironing, conveying and preparing of textiles for delivery within a laundry processing facility.  Cost: 19-26 cents per pound processed.

Administrative Cost: Covers personnel in laundry and textile product management, secretarial, contracting administration, general foreman and nonproduction employees/housekeeping (includes fringe benefit costs, such as union dues, health insurance, etc.). On average, fringe benefit costs were running at 20-30% of actual salary cost (in other words, add that percentage to base salary cost). Cost: 5-7 cents per pound processed and delivered.

Maintenance and Repair Cost: Labor cost and materials associated with routine maintenance of applicable systems, including processing and ancillary support equipment, carts, etc. Cost: 6-8 cents per pound processed and delivered.

Equipment Depreciation: Divide equipment value by 15 years. Cost: 4-6 cents per pound processed.

Depreciation of Property and Applicable Property Taxes: Divide aggregate cost of land and structures plus annual taxes by 75 years. Cost: 2-4 cents per pound processed and delivered.

General Supply Cost: Includes leasing of office equipment, office supplies, covers, pads, hangers, thread, wax, patches, buttons, etc. Cost: 1-2 cents per pound processed.

Chemical Supply Cost: Laundry chemicals, water treatment, etc. Cost: 2-3 cents per pound processed.

Utility Cost: Electrical, steam, gas, water, oil, sewer, refuse removal, and solar. Cost: 7-8 cents per pound processed.

SUBTOTAL: For a most efficient operation, Production Cost should be 46-64 cents per pound processed and delivered.

Textile Distribution and Replacement Cost Benchmarks

Textile Distribution and Return Cost: Includes drivers, fees, tolls, leasing, fuel, vehicle maintenance/repair, linen room distribution (from cart assembly to end-user locations) labor and benefits, seamstress/repair/marking, uniform distribution, cart depreciation and replacement, and transportation to external customers. Cost: 11-16 cents per pound processed (within this component, fuel cost was 4-5 cents per pound).

Textile Cost: Surgical, uniforms, general linen, drapes and other textiles based on a seven-par maintenance value for healthcare or hospitality. Cost: 16-19 cents per pound processed.

SUBTOTAL: Textile Distribution and Replacement Costs should be 27-35 cents per pound processed and delivered.

Total Operational Benchmarks

The overall operational cost benchmark ranged in 2009-2010 from 73 cents to 99 cents per pound processed.

While the overall variance in cost ranges is certainly widespread, a manager must carefully and accurately calculate all costs associated with the actual operation—all are different.

A major failing on management’s part is the inability to calculate fringe-benefit cost and include it as part of the outcome. Calculating production cost while forgetting other costs simply raises additional questions. All costs depicted in this benchmark exercise are considered equally important; one without another would have painted an inaccurate picture.

If, for some reason, you think your costs are lower than the benchmark’s lowest range, I encourage you to re-examine and recalculate your numbers. More importantly, make sure you have included all costs so they parallel those listed in this report.

Expect Cost Increases from Cotton, Polyester, Fuel

Based on preliminary information as of this publication date and per discussions with those who regularly analyze costs, textile replacement cost and transportation cost for 2010-2011 (starting in June 2010) could reflect significant increases. Textile replacement could jump 10-20% due to cotton and polyester becoming more expensive, and managers could see a 5-12% hike in fuel depending on location.

The 2009-2010 survey only reflected minimal cost increases for reusable textiles when compared to 2008-2009. Many end-users, especially those in Europe and Asia, indicated they had purchased in large quantities in an effort to save resources, knowing what level the cotton-price increases could reach.

CHICAGO — The economic slowdown over the past several years has forced many organizations to reprioritize how they invest their money. It is extremely important that managers do a better job of justifying their need for replacement or additional equipment.

New equipment can be justified because it is easier to operate, more dependable, produces more per hour, uses less labor, takes up substantially less space, is easier to maintain, or is more fuel-efficient.

An AmericanLaundryNews.com Exclusive

An AmericanLaundryNews.com Exclusive

We managers are responsible for developing a plan for the future and selling that vision to our employees and bosses. We’re the laundry experts who are responsible for preparing for an uncertain future. So, what events or factors may influence us over the next several years? Here’s my take.