Content about Purchasing

CHICAGO — I have warned that expertise in the textile care industry has been severely hampered by attrition and the inability of top managers to recognize and educate individual managers and programs for who they are responsible.

This void has been filled by consultants who often fail the customer by providing reviews and recommendations geared more to future opportunities than analyses based on supporting facts and data and not the opinion of one or more manufacturers.

Where is the consultant who can give a well-rounded opinion based on all the information that is available in our industry? The big picture must be presented, and the customer needs to be educated to know all systems and opportunities so they can separate fact from fiction.

Responsible organizations should carefully determine if they truly have the expertise to evaluate a proposal for either laundry equipment purchases or total system acquisitions (laundry equipment and the systems that support a complete operation).

For the novice who has never operated a laundry, never modernized a laundry, never been part of a process, I would suggest they not be part of the evaluation process unless they truly have some sort of expertise to offer. Onlythose trained professionals who have experience and education associated with the process should participate.

What happens if your organization fails to follow these simple rules and utilizes evaluations containing personal opinion instead of independent analysis? Most likely, you and your organization will end up in a court of law or, worse yet, a court of public opinion.

Can you imagine being on the witness stand, testifying as a reviewer of modernization proposals that you have no experience and no education associated with conducting a technical review? Worse yet, you relied on the opinion of an external party that was also was an equipment supplier.

I had the privilege of managing Department of Veteran Affairs programs on a national scale for more than 25 years. From my first day on the job, I was directed to visit a facility having modernization pains and was thrown into a den with more than 10 private contractors. It became obvious to me that field expertise was essential in conducting fair, comprehensive reviews of laundry modernization efforts ranging in value from $25,000 to $10 million.

We developed a team of experts who had proven laundry operations abilities. These experts represented engineering, plant operations, construction, plant management, facilities management, facility quality assurance, etc.

It is important to note that these experts also played a vital role in project development, preparation of specifications, etc. When proposal evaluations were being conducted, these experts made recommendations that were reviewed and passed on to procurement personnel who made the acquisition happen.

This systematic effort resulted in the modernization and construction of many facilities and, more importantly, gained the respect of the industry as a whole. While this process is government-related, any organization could utilize it. The key concept is involving the right folks whose work can withstand any external review.

The number of evaluators that a laundry project requires will vary depending on its scope. Nonetheless, experience, proven expertise, and the willingness to serve are essential. A minimum of three evaluators should be the rule, and the evaluation process—including those aspects about which an evaluator may disagree with the team—should be formalized and put in writing.

Each member should have proven expertise:

• Been involved in previous laundry equipment and modernization processes.
• Understand the specifics of the complete system approach, ranging from laundry sorting and processing to steam requirements and air compression pressures and processes.
• Understand the principals and applicable codes of laundry plant safety, ergonomics, energy techniques, energy type comparisons, etc.
• Have management experience with laundry plant operations.
• Be certified and credentialed in your organization’s designated field.

Once an individual meets all these prerequisites, then and only then should they be considered as part of an evaluation team. If exceptions are made, the evaluation process will be circumvented and that could lead to project cancellation, loss of valuable funds and, most importantly, embarrassment.

Can the industry as a whole meet the challenge?

ROANOKE, Va. — The escalating cost of textile products is causing many organizations to refocus on reducing linen-replacement costs.

During my years in this industry, both as a laundry manager and as a laundry consultant, the challenge of reducing linen-replacement costs has been a recurring theme. Some years ago, I had the pleasure of working with a major hospital on a linen-cost-containment program.

The immediate goal was to lower the hospital’s annual expenditures on linens; the hospital had been trying to accomplish this for several years. It was making the same mistakes that many U.S. healthcare facilities make: It was looking for a quick and easy solution.

There is no such quick fix available. But it is interesting and educational to review the efforts of this hospital and compare them with the eventual solutions. In order to save money on the purchase of replacement textiles, this hospital began an aggressive purchasing program designed to:

• Limit the amount of new linen stored at the hospital.
• Obtain the lowest cost per item based on purchase price.
• Reduce the number of linen items in circulation.
• Educate the linen users on the cost associated with linen service.

Goal One: Reduce Stored Supplies

This can be done simply by not ordering more linen until the current stock has been put into circulation. The catch then becomes having new linen available when it is needed. This requires an understanding of the hospital’s linen system and its seasonal fluctuations, knowledge beyond that possessed by most purchasing agents.

Often the linen vendors will attempt to assist the hospitals in understanding their linen system. There are many linen “control” systems on the market, but the majority of them are little more than advance-order systems for the vendors.

This particular hospital made the mistake of becoming overly dependent on the textile vendor’s promised one-week delivery on all linen items. The vendor was able to meet most of the orders for the first couple of months, but then the sporadic ordering (no towels one month, then triple the monthly order the next) caused delivery times to stretch out until two and three weeks became the norm.

The hospital was ill prepared to cope with projecting its needs in advance and routinely ordering predictable amounts of textiles, especially when it had been promised one-week delivery. The natural result was periodic linen shortages that made patients and staff unhappy. These problems caused the administration to return to the former policy of stocking linen items in the storeroom in an effort to ensure an ample supply at all times.

Goal Two: Reduce Per-Item Costs

The hospital adopted the philosophy of buying on purchase price instead of cost per use. It began to purchase muslin (T128) sheets instead of percale (T180), and the textile vendor assured the purchasing agent that patients and staff would never know the difference.

The hospital entered into a period of buying lower-quality items that were “just as good, only less expensive” than what it had been purchasing. There were some short-term savings by doing this, but the test of any good purchasing program is the test of time. Problems began to develop within the first year.

1. Gowns that had so nicely covered the patients no longer performed in the same manner. There was less material per gown, so IV’s were harder to handle, resulting in increased cutting of sleeves. Ambulatory patients began to wear two gowns, one on the front and one on the back. This practice almost doubled the usage. Net result was a cost increase on this linen item.
2.  The muslin sheet—that had seemed to be such a good buy—wore out more quickly than the percale. The greatest concern was the speed with which the cotton disappeared from the 50/50 blend. The majority of the cotton was worn out of the sheet during the first year, leaving a coarse 100% polyester sheet.
   
   
   The nursing staff found these sheets unacceptable and therefore took it upon itself to rag them out. The muslin sheets weighed more than the percale sheets and cost more to process. Net result of the economizing effort was to increase the monthly input of sheets, increase poundage in the laundry and decrease user satisfaction.
3. The washcloth was another item affected by the attempt to lower costs. This certainly seemed like a prime target for a lesser-quality product, especially because of the high replacement rate. The hospital began to purchase a lighter-weight washcloth but stayed with the usual 12x12 size. It was not long before complaints began to come in from the nursing floors.
   
   
   The new washcloth was shrinking a lot more than the others. After three or four washings, the washcloth became closer to an 8x8 size. The net result of this change was an increase in utilization. Respect for the product dropped and its abuse increased. The replacement rate more than doubled.

Next page: Reducing the number of items in your inventory...

"What aspects of inventorying and securing textiles pose the biggest challenge? What percentage of losses would you consider to be acceptable if the proper controls were in place? And how could an insufficient inventory impact the rest of my operation?”

Equipment Manufacturing — Joe Gudenburr, G.A. Braun, Syracuse, N.Y.

The global marketplace has made quality control a more difficult item to manage.

During the past six months, raw-material costs have gone up more quickly than expected and some foreign manufacturers have cheapened their products in an effort to improve the bottom line. Many of these changes don’t become readily apparent until the product is washed and put into service.

“I'm looking to acquire a piece of production equipment for my laundry, but am undecided about whether to buy it new or used. What information should I consider as far as total cost vs. benefits are concerned? I want to make sure I'm comparing apples to apples."

“I'm looking to acquire a piece of production equipment for my laundry, but am undecided about whether to buy it new or used. What information should I consider as far as total cost vs. benefits are concerned? I want to make sure I'm comparing apples to apples."

The older I get, the more surprised I am by the major changes happening in the world around me. This year has definitely been one of rapid change.

The demise of National Linen from the leading commercial provider of healthcare textiles to a footnote in history represents a classic case study of management mistakes. I’m hopeful that someone with first-hand knowledge will write the definitive case study on what happened. My fear is that if this isn’t done, then we’ll see other companies make the same mistakes.

What aspects of inventorying and securing linen pose the biggest challenge for textile care managers like me? With proper controls in place, what percentages of losses (through shrinkage/theft and ragout) do you consider to be acceptable? How can an insufficient linen inventory impact the rest of my operation – labor, equipment, etc.?