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Laundry Operation Supply Chain Update, Strategies (Conclusion)

Strategies for operators to better navigate supply chain

CHICAGO — Brad Shames is president of American Textile Maintenance in Los Angeles.

It’s the parent company of Republic Master Chefs and Medico Professional Linen Service and has provided hospitality, healthcare, and retail linen and uniform services in Southern California since 1932.

The company has experienced its share of challenges over the past 90 years, and the supply-chain obstacles over the past few years rank high on the list.

Fortunately, the situation is improving.

“It seems that things are normalizing more and more each day,” Shames points out. “Equipment is in its own world.

“Operators like us can buy more in bulk, which means increasing inventory on hand is an alternative being talked about more and more. 

“More and more supplies are in inventory by our suppliers, and although much higher in cost, available.”

However, the improvements don’t mean that laundry operators can relax when it comes to ensuring they have the equipment and products and goods they need to deliver quality service to their customers.

LAUNDRY SUPPLY STRATEGIES

So, what can a laundry operation do to best navigate the current supply chain situation?

“Working with multiple vendors rather than two or three has helped,” Shames shares. “Putting out a yearly RFP (request for proposal) has helped also. 

“We have increased more inventory on hand with items that are difficult to procure.”

“If a company can increase inventory on hand, that certainly helps,” agrees Rick Kelly, vice president of sales and marketing for equipment manufacturer Pellerin Milnor Corp. in Kenner, Louisiana. “Having additional inventory on hand smooths out the ebb and flow of supply-chain disruption. 

“However, that is difficult to achieve with suppliers still working through their supply-chain issues.” 

He says that it comes down to the availability of product, cash flow and storage space availability to increase inventories so that companies can weather the ups and downs of supply-chain disruption.

“The advice I’m giving people, especially on large-volume commodities, is look at their purchasing techniques because of the cost of warehousing and some of the fuel charges and scarcity,” shares Jeff Landry, executive director of CSCNetwork, an organization based in Franklin, Tennesee, that works with independent laundry and linen service operators, has been speaking with vendors and operators about the supply chain, taking note of several factors.

“Look at can you buy in bigger quantities? Can you buy container-direct and bypass some of the warehousing cost that is not going to go down? It’s still going to be very expensive.

“If you’re going to buy a bale of bar mops at a time, the cost of the labor and freight is still going to be enormous on that purchase versus buying a truckload. Or, if you could get a container direct from a supplier and bypass the warehousing cost, that’s where you’re still going to have the biggest savings.”

Lenore Law, owner of ATS/California Textiles in Corona, California, suggests that laundry operations keep extra inventory for growth purposes—and so should their suppliers.

“I do not think it is ‘the one with the most inventory wins’ as sometimes that mentality creates greed from a supply-chain strategy,” she says. “My vendors support my company with all I ask for and need, and I keep multiple vendors to ensure my customers never run out of product.”

Law says that products made in the United States will be more in demand as well. Also, she says quality lasts longer and pays off later.

“It is for that reason that I distribute multiple USA companies’ goods as well as imported goods,” she shares. “We bring both containers and stocked product on an ongoing basis, as well as backup stock in our California warehouse.”

Law cautions that buyers need to beware currently, especially in terms of textiles.

“Many goods coming in across the nation have no labels, which is against the FTC labeling laws, and many items are coming in with no tariffs on an online basis, which is totally wrong,” she says.

“We like to lead with integrity, so I would advise all laundries, both big and small, to ensure they are buying what they think they are and weigh bales, a portion on every load. Know your vendors and do not allow seconds to be mixed into the bale as well.

“If you’re going through product faster, it is not always your customers’ abuse as the reason, sometimes it is what you’re buying. Make sure your vendors stand behind their product or look at new vendors that will.

“Don’t be afraid to weigh a few bales monthly. It may save you a lot more than the time it took to weigh.”

Law also says that U.S. buying power is greater today since the dollar is at a high value while the yen is much lower than usual.

“In other words, the world’s economy is down while America is doing well economically,” she says. “Why they have increased interest rates to help battle inflation when next year we will have too much of everything—but we will not see that until March forward. And my guess is on many products we will not see the price decreases until next summer.

“We are in a ‘cash is king economy’ right now and back to the 1990s in terms of purchasing. Since I started my company in 1990, I’m looking forward to 2023.”

FINAL THOUGHTS

The supply chain is always challenging with all the moving pieces involved, but the past few years have made it even more difficult for laundries to have what they need on hand.

It appears that things are improving, but operators need to be smart about their supply logistics, being aware that challenges still exist throughout the supply chain.

And some of these challenges may become “standard operating procedure.”

So, what final advice can be offered to help laundries better navigate the supply chain?

Shames says, “Partner with vendors that have the items you need in their local warehouses.”

“From a machinery supplier viewpoint, perform preventative maintenance,” advises Kelly. “Keeping machinery maintained reduces the risk of machinery downtime. 

“Laundry operators do not want to have significant downtime due to extended replacement-part lead times if the part failure could have been avoided with preventative maintenance.”

Landry looks for a “return to a little bit of pre-COVID normalcy” in the supply chain in 2023.

“I think the retailers will get back into manufacturing probably the first or second quarter, so costs could probably inch up a little bit,” he says.

“They may be a bit lower than they should be today, but I don’t think we’re looking at what’s happened over the last two years, as far as cost changes. I think everyone will be excited to have a kind of flat, normal year—barring any global war, traumatic destruction. Things are always subjective.”

Law concludes, “Bottom line, there are still labor shortages and fuel prices are still way too high, but we are over the hurdle in terms of supply-chain issues, so let’s power up and go full speed ahead!”   

Click HERE to read Part 1 with an update on the current supply-chain status. To read about current challenges, click HERE for Part 2.

Laundry Operation Supply Chain Update, Strategies

(Photo: © BIG_TAU/Depositphotos)

Have a question or comment? E-mail our editor Matt Poe at [email protected] .