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Panel of Experts: Commercial or Rental Plant vs. Institution-Based Laundry (Part 2 of 2)

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(Image credit: Alissa Ausmann)

Are there substantial differences in equipment and procedures between a commercial or rental plant and an institution-based laundry? If so, what are they, and why do such differences exist?

Textile/Uniform Rental: David Dersheimer, SITEX Corp.

There are certainly differences in what commercial or rental plants may choose or use for equipment and procedures when compared to institution-based laundries and their respective facilities.

Generally, the volume and product mix of a rental or commercial facility tends to fluctuate more than an institutional facility’s does.

Rental facilities tend to make equipment and process decisions based on current mix and volume plus projected growth. They have smaller load quantities in varying item mixes. The soil levels in rental plants also tend to range broadly from light to heavy.

david dersheimerInstitutional laundries have a more consistent volume and less variance in soil classifications. And there is typically less variation in soil levels and volumes in a healthcare, nursing home or hotel laundry.

But I’m not sure you could define differences in laundries based only on these two categories or generalities. You might need to ask a few questions, such as:

  • What is the item mix, and how many different sort classes/soil levels are there?
  • What is the facility’s planned growth? Is there anticipated growth in one segment or area? If so, how will that impact the volume and mix?
  • How would product mix affect equipment decisions?
  • Is the wash operation running batches or smaller, varying loads, or loads of similar volume and sort class? Does the facility need single or convention machines, or would a continuous batch washer be a better choice?
  • If flatwork finishing, is volume or flexibility needed? For large pieces, does the facility need a sheet feeder, table linen feeder, or a machine that can do both? Is an ironer needed to handle napkins and pillowcases?

Differences between any two laundries, whether commercial or institutional, can be quite distinct. One needs to assess current mix, planned growth, and output expectations to determine individual needs.

Consulting Services: Ron Evans, RJ Evans and Associates

There are several procedural differences between industrial rental laundries and ron evansinstitutional laundries. Growth, greater competition, incomparable number of products processed, and profit are the driving and dividing forces.

Since most rental laundries have hundreds if not thousands of customers, their processing practices must be much more flexible and expanded than an institutional laundry that may have a singular or limited common customer base.

Since rental laundries exist in a much more competitive environment, it is essential for the production department’s contribution to the rental company’s bottom line be fully within strict budget forecasts. The trick here is that all production forecasts are predicated on sales forecasts, and the latter can be difficult to project for a coming year.

There is a constant need to search for improved best practices to satisfy the varied demands upon their daily changes in usage, product variation and resource allocation. It becomes essential to leverage all advantages that eliminate or reduce waste while at the same time operate within projected budget requirements. These are all centered on “lean and mean” customer satisfaction.

The production department’s contribution to bottom-line profit in a rental laundry is scrutinized and monitored due to its constantly changing customer base. Rental laundry production management must be much more engaged and “hands on” in addressing all the demands of its varied customers’ needs. Pressures on rental managers are more numerous and dynamic than those on institutional managers. Rental production managers must be good business managers as well as knowing their trade.

Another difference is the role of a production department in a rental industrial laundry. Full-time salespeople use their production department as a sales tool and regularly take potential customers on plant tours. Therefore, the department always has to be in marketable “showplace” condition.

A rental laundry’s service department also uses the production department as a customer-retention tool. Service departments have developed sophisticated programs to elevate a customer’s understanding of the rental laundry’s value in maintaining their fixed costs, convenience, and quality standards. As such, they constantly market environmental advantages in waste treatment, sanitary conditions, safety practices, and inventory control. Processing techniques are used not only for production but to gain and retain customers.

Because of its dedicated freestanding facility, the rental laundry has acquired a “target” on its back for every governmental inspector. Consequently, it must operate under the assumption that it will have city, state, regional and federal government inspectors in its facilities throughout the year. The end result is rental laundries have unsurpassed training and updated performance exercises in safety, waste management, OSHA, and human resource issues out of the realization that they will be audited. This constant pressure creates a professional, self-policing system and a comfort zone for their customers.

Both types of industrial laundries have similar equipment, chemicals and procedures for the items they process in common. Because of the difference in competitive situations, rental laundries must operate at a higher level of customer speed to retain revenue-generating clients.

It has been my experience that most rental production managers could operate an institutional laundry quite easily while most institutional production managers would have to expand their skills to effectively manage a rental industrial laundry.

Equipment Manufacturing: Kim Shady, Laundrylux Corp.

How do you define commercial laundry or institutional laundry? Often, those terms are kim shadyused interchangeably. So let’s remove the descriptive terms and be more absolute. What is the equipment difference between a laundry processing less than 3,000 pounds per day and a laundry processing more than 3,000 pounds per day?

In the simplest form, the equipment differences can be defined by automation. It may reduce labor costs, improve quality, reduce processing time or save energy. As the pounds processed per day increase, there become economies of scale for each of these items.

While improved quality may be a goal for selecting automation, the determining factor is most likely the return on investment (ROI). You can calculate this by projecting labor savings, energy savings and maybe even overhead by square foot vs. the cost of automation.

A small-piece folder is one of the smallest investments for automation. It can process towels, gowns, blankets or fitted sheets. If your laundry is processing 1,000 pounds of these items a day, a small-piece folder could reduce your staffing by one person. An institutional laundry is likely using a staff of two to hand-fold these items. If a basic small-piece folder is $45,000, what might the ROI be?

Commercial laundries likely process a large quantity of flat goods. Automation in this case may include automatic pickers to replace one or two staff members.

Processing linens through an ironer requires the least amount of energy per pound of finished goods. But that doesn’t mean ironing is the lowest-cost method for processing goods. An institutional laundry may use an ironer but lack automation, thus requiring two to four staff members.

Over the last five years, numerous ironers on the market have offered feeding, folding and stacking built into the ironer, allowing a single operator to process 150 or more pounds per hour. Processing 75 pounds per hour is a common goal in laundries without automation. A machine with these features can reduce the staffing required for ironing. The additional investment for the feeder, folder and stacker may be $100,000. What might the ROI be for this automation?

Labor will always be the largest cost of operating a laundry. An institutional laundry can be limited in methods for reducing labor costs, so automation can be a difference maker. It is the difference between the equipment selections in a commercial laundry and an institutional laundry.

Member at Large: Douglas Story, Swisher Hygiene

When I first read this question, I thought, “What in the heck can anyone say about this? douglas storyProcessing fabric is processing fabric, right?” But it is a good question that has forced me to look not so much at the equipment or procedures that are used by the two laundry types but at the philosophies behind the use of that equipment.

As I was contemplating what I would write, I was inspired by one of my favorite “philosophers,” Jeff Foxworthy. Here, offered somewhat tongue-in-cheek, are some differences between a commercial laundry and an institution-based laundry:

  • If the laundry manager is a graduate in hospitality management and is in the job as a learning experience, it might be an institution-based laundry.
  • If a washer’s rated capacity is used as the measure of the pounds of linen being processed, it might be an institution-based laundry.
  • If a washer’s rated capacity is considered an estimate and everyone knows that it can hold another 100 pounds, it might be a commercial laundry.
  • If the laundry manager loads the washer and then walks to the next room to welcome a guest and offer them a cookie, it might be an institution-based laundry.
  • If the laundry manager is proud of his washroom’s 2,000 lbs/hr production but can’t understand how two 100-pound dryers can keep up, it might be a commercial laundry.
  • If the laundry manager, when asked why he has 10 washers and two flatwork ironers stored in the parking lot, answers, “Parts,” it might be a commercial laundry.
  • When employees stay later to produce more laundry, it might be a commercial laundry.
  • When employees stay later to clean the rooms or provide patient care, it might be an institution-based laundry.
  • When the flatwork ironer goes down and the laundry manager prays for its recovery, it might be a commercial laundry.
  • When the laundry manager can give you the cost per piece, labor, utilities, fixed and variable cost itemized, it might be a commercial laundry.
  • When the laundry manager says, “I don’t know all of my utility costs,” it might be an institution-based laundry.

There are philosophical differences between commercial (for-profit) and institutional (not-for-profit or support services) laundries, but it is not, for the most part, in the equipment or processes they use. It is more in how management approaches the business and customer service sides of the operation.

In the past, the primary focus of a commercial laundry was the customers that paid for their service. By contrast, this was/is not always the case for the institutional laundry. But as we look to the future, I believe that we are seeing the philosophies of these two operations beginning to merge.

Institutional laundries are becoming more like their commercial counterparts because of economic pressures and because many of the organizations operating these laundries have realized the impact they have on the bottom line of the institutions they serve.

Commercial and institutional laundries are becoming more customer-focused, so both are looking at better, or more efficient, ways to improve the way they do business for the customers they serve. For both, it is a matter of survival.

Click here for Part 1.

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