Penny-Wise and Pound-Foolish II

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Eric Frederick |

ROANOKE, Va. — I originally wrote this column nearly a decade ago, but I feel it is time to update it based on a number of discussions and plant visits I had during 2014. 

It always amazes me how poorly we managers treat our laundry chemical representatives. We hammer them on cost from morning until night and will change vendors in a heartbeat because someone else says they can do it for less. I think it is time that we take a closer look at what we are doing and why. Are we being penny-wise and pound-foolish? 

Energy costs have declined substantially since I first wrote this article, but the need to produce linen at the lowest possible cost is still a driving force. Labor costs continue to escalate, and we are being asked by our customers to keep prices down. Many managers find this an impossible situation and simply give up, or, worse yet, hammer on their chemical representative to decrease cost. If managers are to keep costs down, then they must be able to either increase volume by 10-15% per year or decrease operating costs. Adding volume year after year is not always possible. 

One of the best ways to decrease cost is to spend more money on washroom chemicals. The goal is to create a wash quality that will allow 98% or more of the work to flow through the laundry on a single pass. Many managers are comfortable with anything less than 5% rewash, and many are running higher than that. They pride themselves on reducing those costs, but this reduction negatively impacts labor, utility and textile replacement costs. 

Labor has always been the largest cost of processing textiles. We waste labor when we give workers goods that must be carefully sorted because of the number of rejects. The least expensive way to process a textile item is to do it right the first time.

If you’re averaging 5% rewash and you can lower that to 2%, how much labor can you save? The 3% reduction in rework should translate into a 5% increase in productivity, because you won’t have to reprocess the work and employees will be better able to establish a reasonable pace at their workstations.

Textile replacement costs are normally your second-highest cost. Many low-cost wash formulas rely heavily on large amounts of chlorine bleach to cover for the more expensive chemicals. Nothing is more corrosive or damaging to fabrics than high concentrations of chlorine bleach. 

I have seen many managers brag about their chemical costs while complaining about their textile replacement costs. Some managers blame customers, saying they are not sending the product back to them. I believe it’s human nature for healthcare workers to react to poor wash quality by throwing away unsuitable items, especially when they lack confidence in the laundry to remove the stain or do a better wash job the next time around.

The ability to keep an item serviceable during its expected life is one of the keys to reducing textile replacement costs. Longer service life means a reduced cost per use and translates directly into fewer dollars spent on textiles. Also, if you purchase a quality textile product and process it properly, the end-user will respect the item, use it properly and make sure it’s returned to the laundry. 

To lower processing costs, we need to make the best use of every utility dollar spent. Stain formulas normally run with high concentrations of chemicals and at higher-than-normal processing temperatures. By reducing the amount of rewash loads, we reduce the cost of utilities. By using less water, gas and electricity, we reduce the cost of doing business. 

I dare say that there isn’t a laundry in the country that wouldn’t benefit economically from a reduction of 2-3% in rewash, even if it doubled their cost per hundredweight. What manager in the country wouldn’t be willing to spend up to an extra penny per pound to save an additional 3 or 4 cents per pound through labor, linen and utility expense? Have we focused on the wrong item to control?               

About the author

Eric Frederick

Eric Frederick served 44 years in laundry management before retiring and remains active in the industry as a laundry operations consultant. You can contact him by e-mail at elfrederick@cox.net or by phone at 540-520-6288.

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