CHICAGO — Faultless Healthcare Linen, based in Kansas City, Mo., knows what it’s like to design, build and retrofit laundry operations.
It’s tackled around seven such projects in the past 20 years, according to COO Mark Spence.
“Almost always the situation was capacity, creating new capacity to accommodate growth and to accommodate innovations in technology going on in the industry,” he says.
Faultless’ most recent project was its first new build of a laundry facility in St. Louis, which opened in 2018.
The situation of the new build was unique. In 2015, the company learned that its plant that opened in 2012 was going to be subject to eminent domain relocation to accommodate Next NGA West, a mega-project jointly managed by the National Geospatial-Intelligence Agency, U.S. Army Corps of Engineers and U.S. Air Force.
“It took about three years to negotiate a relocation package with the city and state and then to actually construct the building,” Spence shares. “We could not find an adequate industrial building within the city limits, geographically, where we need to be located. There just wasn’t any inventory. They did agree to let us construct a new building, a new facility.”
Faultless ended up building an 82,000-square-foot healthcare laundry facility not far from its other St. Louis healthcare plant in a new industrial development.
While the Faultless scenario was unique, many laundries face the question at some point of whether to build a new plant or redesign existing space.
THE BIG DECISION
Ed Kwasnick, director of business development for design-build contractor ARCO/Murray, says the decision to expand an existing laundry or build a new plant is typically triggered by growth.
“The laundry’s volume has exceeded its maximum capacity and the plant can’t meet the demand of the business any longer,” he says. “Your choices are to expand or stop growing. Yes, you can upgrade to more efficient equipment. Yes, you can renovate your laundry to add more equipment and use the given space more efficiently. You can add another shift and run more hours to increase production.
“But after you do all that, and you still can’t get the job done, it’s time to expand or build new.
Matthew Alexander, president and CEO of Pertl & Alexander, a consulting firm that specializes in design and management of laundries, says that due to consolidation, major laundry suppliers typically build large new facilities to consolidate production and realize economies of scale or to expand market territory.
“Laundries owned by hospitality or healthcare organizations, however, typically do not have the same growth ambitions as laundry supply companies,” he points out. “Due to outsourcing of laundry by hotels and hospitals over the past 20 years, many of the existing facilities are in the end of life expectancy of machinery (20-30 years).”
While laundries have typically invested in some labor- or utility-saving equipment over the years, Alexander goes on to say, it’s typically when major production and mechanical systems require replacement that the determination of redesign or build new takes place.
Gerard O’Neill, president and CEO of consulting company American Laundry Systems, sees budget and space as determining factors in the decision to redesign or build new.
“While budget will always be a big part of the influence as to which direction to go, it does not always win out,” he says. “If your existing plant does not have enough space and cannot be expanded because you are landlocked or you cannot get any more utilities, or your workforce has slowly but surely moved out of the inner city area you occupy to the suburbs, or the area you occupy just does not have the infrastructure to support an upgrade, redesign or expansion, or on the other end a developer comes along and wants your property to build dorms for the local university, then it may pay you to move out and build new.”
O’Neill points out that any number of reasons can influence or make the decision to stay put or to start new somewhere else. His advice? Do a pros and cons spreadsheet comparison and put everything into it, including the “pain” experienced from doing a retrofit, and, of course, the savings.
“For those who’ve been through it, building a new or re-equipping an existing laundry is a grueling task,” shares Steve Miller, vice president and general manager of laundry consulting company Victor Kramer Co.
“From conception and design of a laundry through to the start of construction and opening day can be a long, complex and difficult affair. There is much to consider, so many decisions to make and unending obstacles to clear before even the first shovel of dirt is moved or a purchase order issued.”
In his mind, the decision process begins with the “realization of need,” something that comes on slowly over many years or perhaps suddenly overnight. However, Miller points out that cost and capital almost always trump every other design influence.
“Where labor is expensive, such as Chicago, San Francisco and New York City, automation and efficiency take first chair,” he says. “When jobs creation is the objective, automation is less important and simplicity may rule. Transportation difficulties might favor an on-premises plant. Areas with high utility rates will mandate the best the industry has to offer in the way of conservation and reclamation technologies.”
The laundry industry has seen vast improvements in technology in the last 20 years, says Kwasnick. Production equipment can process greater and greater amounts of laundry in a smaller footprint. Productivity systems help manage production scheduling and maximize output, efficiency, and quality. Utility systems help minimize utility consumption while making laundry processing more efficient and sustainable. This technological advancement can influence the design/redesign decision.
“However, the decision to expand an existing plant vs. building new is still very much the same,” he shares. “Do you have room for expansion? Can you expand without shutting down the existing operation? Will an expansion provide the necessary capacity for future growth? Is expanding going to be more cost-effective than building new?”
If the answer is “yes” to these questions, then Kwasnick says expansion is likely the best option. Is the operation landlocked? Will an expansion require the laundry to be shut down for an extended period of time? Is expanding only going to buy a couple years before outgrowing the facility once again? Is the cost of expansion equal to or greater than new construction?
“If the answer to this set of questions is ‘yes,’ then new construction may be the proper course of action,” he says. “It comes down to available space, additional capacity and cost—the same three factors that have always been used to make the expand vs. build new decision.
Alexander agrees that the process of making a determination of design/redesign has changed as much as the inputs have changed to the extent a laundry can produce more in less space with less labor and utilities.
“The process of analyzing the current demand/task, cost and quality of services and forecasting various alternatives remains a similar exercise with more advanced controls and automation,” he shares.
“The failure of major healthcare and hotel laundry companies in major markets has contributed to some hotel and healthcare organizations being more interested in investing in laundry than previously, and this is spurring redesign and potential new build projects.”
Kwasnick says that usually the most important factors leading to a laundry redesign are space, capacity and cost.
“Typically, the cost to expand is less expensive than the cost to build new,” he says. “Think of it in terms of your home. It’s typically more cost effective to add a new sunroom, remodel your kitchen, expand the garage, and build a new deck, than it is to build a new home.”
When the operational savings of building a new plant, when measured against the existing and project volume of business, doesn’t produce an attractive ROI, and when the existing plant is able to meet the projected task, that’s when plants are typically renovated, adds Alexander.
“The cost of a new building can be daunting—$150 per square foot is typical around the country today,” shares O’Neill. “Now add equipment and infrastructure. The cost of building a new 50,000-75,000-square-foot building, the average size laundry being built today, you can hit $15-$20 million pretty quickly.
“So imagine taking half of that and investing in the current facility. Now, it gets a little easier to make that decision.”
One item he sees “raising its ugly head” more and more is the availability of water and the cost of water. Pre-existing laundries with water are at a distinct advantage versus new buildings. Sometimes getting access to water can be problematic, and hidden fees imposed by municipalities raise the cost of the project before one shovel touches the ground.
“When a new location or building cannot be justified, perhaps an expansion will do,” Miller adds. “An overhaul of the workflow or a relocation of clean and soiled linen storage spaces might serve.”
Improvements to capacity, workflow, efficiency, maintenance, quality, reduced double-handling, operating cost, etc., might be achieved by replacing a conventional washroom with a batch system, he says, or by installing energy- and water-conservation systems.
“What kind of wall, floor and ceiling finishes are most durable, least expensive and best suited to pertinent ergonomic and maintenance issues?” Miller continues. “Rebuilt flatwork ironers might be more cost-effective than buying new.”
However, a redesign needs to meet long-term growth needs, says Kwasnick.
“There is nothing more frustrating than to spend a bunch of money, time and resources to expand your plant and then discover that three years later you are out of capacity and cannot get the production out the door,” he points out. “A redesign needs to provide balanced flow though the plant.
“Upgrading your washroom output without upgrading your finishing capacity is a recipe for disaster. That’s like upgrading your garden hose to a firehose and leaving the same garden-brand sprayer on the end. In the end, you’re not getting any more water from the system, and you’ve put that sprayer under a lot of pressure. It’s just a matter of time before something blows.”
“The single biggest design shortcoming that we observe and experience managing laundry operations is inadequate space for staging clean and soiled linen for receiving and shipping and at work stations,” shares Alexander. “Determine the task with some precision (it is often misstated), determining the correct mix of equipment for that task so to balance the throughput of soiled sorting, washing and finishing so a similar amount of linen is produced in each department with a minimum of ‘putting work up’ and ‘taking it down’ between productive areas of the plant.”
Automated material handling systems make management of workflow dramatically easier; however, understanding and refining the flow of work is critical to long-term operating costs and throughput, he adds.
For O’Neill, the big “trick” to redesign of an existing operating facility is to find the “hole.”
“Every plant has one or if not, then you need to build one,” he says. “Expand an area where you can begin your work with little or no impact to the operation. Without this ‘hole,’ it is almost impossible, running the risk of downtime because the boiler room switchover went a day or two longer than expected. Murphy’s Law applies here more than any other situation.”
By limiting the impacts to the plant and taking advantage of a hole or the building/expansion of the ‘hole,’ O’Neill says a laundry operation can go through every department and replace/upgrade equipment, adding a level of automation for a facility that operates well for another 10-20 years.
“Low ceilings do not accommodate conveyor systems, so that’s probably one of the most important aspects of a new plant, whether it’s a retrofit or building from the ground up,” Spence shares as an example. “If and when we retrofit, we always try to find a building that’s got adequate ceiling height.”
Check back Thursday for the conclusion on designing a new plant and expert advice.