www.americanlaundrynews.com
April 2024 • Volume 50, Number 04
The Newspaper of Record for Laundry & Linen Management
1974 - 2024
Examining cost controls in laundry & linen services Cost-per-pound, cost-percustomer strategies to help operators maintain or improve financial health BY MATT POE, EDITOR
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t’s a fact of business: costs continue to rise. From goods to products to services, laundry and linen service costs go up every year. That’s why operators need to learn the true costs of processing linens and adjust so that the business can continue to put out clean, quality goods to benefit the business and its customers. “Our basic management philosophy and corporate mission is ‘you can’t manage,
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what you don’t measure’ in our industry,” says Eddie Lefeaux, CEO of Westport Linen Services, a healthcare laundry in Baton Rouge, Louisiana. Using this as a starting point, American Laundry News gathered information on some best practices for laundry operators to examine their costs per pound and customer and how to use that information to help ensure financial stability.
MEASURE, MEASURE, MEASURE
Any type of analysis starts with measuring key indicators. “Tracking every measurable expense starting with utility consumption, productive labor, linen injection, delivery expenses and measuring against budgeted standards are essential in measuring your true costs per pound,” says Lefeaux. “By tracking delivered pounds by the return received pounds daily allows us to forecast linen injection and linen consumption by each customer. We then use our service teams to help control inventories, work in utilization, and eliminate abuse and waste at the customer’s accounts.” “Actively gathering and tracking all costs per pound, per customer, per item or even per item per customer should be part of each laundry’s best practices,” says Rudi Moors, a 32-year laundry industry veteran and founder of Beyond Washing, a strategic services consultancy in Greenville, North Carolina. “There are various companies out there that provide tools and programs to do so. “In my past role, the ones I encountered most were Spindle and Laundry Dashboard. I know that both also track employee performance, and that the latter also tracks (individual) machine performance.” Moors agrees that gathering and track-
(Photo: © soleg/Depositphotos)
ing cost information is vital in a laundry operation. “Measuring is knowing and knowing is half the battle,” he says. “It will tell the operator a lot of things.” Moors says gathering and tracking information will help figure out whether the company makes money or not, and if not, where to look first, such as: • What works and doesn’t work? • Which customer(s) is/are not profitable? • Which items (even per customer) are not profitable? • How are the individual employees performing? • What is the PPOH (pounds per operator hour)? • Which machine(s) is/are not performing as expected? • Cost of utilities? • Cost of materials? • Labor cost? • Etc. “With accuracy from precise data, we can compare each client to industry benchmark standard by the service type of acute, long term or various healthcare departmental practices,” shares Lefeaux. As an example, he says that if an acute care facility is averaging 19 pounds per adjusted patient day, the laundry can examine inventory par levels by the department and compare the line consumption to its patient census and suggest best demonstrated practices for that area. So, what are some key measurements and cost analyses to make? “First things first: do you know your costs per pound or costs per customer?” asks Gerard O’Neill, president and CEO
See Costs on Page 6
LATE NEWS Shasta Linen electrifies half of delivery fleet FOSTER CITY, Calif. — Motiv Power Systems, a manufacturer of mediumduty electric trucks and buses, reports in late 2023 it completed the delivery of five electric vehicles to Shasta Linen Supply, a commercial linen supply company delivering linens, uniforms, and other textiles to more than 1,200 business and professional firms in California. “Community and sustainability go hand-in-hand for the team here at Shasta, and electrifying our fleet with the Motiv vehicles brings us one step closer to cultivating a cleaner and greener environment,” says Noël Hammer Richardson, president and CEO of Shasta Linen Supply. Shasta is paving the way as Californiabased companies begin to transition to electric in accordance with the state’s Advanced Clean Fleet (ACF) regulation. ACF requires fleets to have 50% of their vehicles be all-electric by 2031, and Shasta’s five Motiv trucks now make up half of their fleet. Shasta has taken its existing business and retrofitted the infrastructure to support the trucks from Motiv, now in operation across local routes in the Sacramento and San Joaquin Valleys. With the delivery and deployment of the Motiv-powered vehicles in late 2023, Shasta has already driven 9,600 miles, reduced an estimated 15,800 pounds of tailpipe emissions and saved $4,800 on fuel costs.
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