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Pitching for New Outlays in Tight Financial Times (Part 1)

“My laundry really needs new equipment and goods, but COVID-19 has made finances very tight. How can I pitch these needs to upper management for the best chance of approval?”

Equipment/Supply Distribution: Scott McClure, Pellerin Laundry Machinery, Kenner, La.

The largest operational expense in any laundry has historically been labor. Since the pandemic, many laundries are having to increase wages to attract and maintain their employees. 

Now more than ever, ownership is challenged with a smaller labor pool calling for higher wages. Figuring out how to produce more linen with fewer employees is a major key to succeeding during this pandemic.

There are many ways laundry equipment can be utilized to save labor. One of the hardest tasks in a washroom is manually loading and unloading conventional washers and dryers. 

If your laundry needs to produce as low as 1,000 pounds per hour of linen, you should consider a small automated continuous batch washer (CBW) system to produce your linen. 

An automated tunnel wash system can streamline your laundry production by processing small manageable loads while using less labor and increasing production capabilities. Systems can also be set up to be automatically loaded, washed, extracted, dried and unloaded with the use of simple sling and shuttle/conveyor systems. 

Not to mention, the CBW system can be expanded for increased production as your facility grows. 

Another benefit of tunnel washing systems is the water/sewer savings. In many cases, tunnel systems use 70% less water than conventional washer-extractor systems.

There are many ways to automate and save labor within the flatwork finishing and folding process. For example one operator utilizing an automatic towel folder can process two to three times the number of folded products than one operator can fold by hand.  Depending on your operation, sorting small-piece folders may be the right choice. 

Automatic cornerless feeders for sheet and table linen ironers can produce more linen per operator by eliminating the need to find and clip corners of sheets or feed linen by hand. 

Utilizing sling systems to automatically transport linen from your wash aisle directly to your ironers and folding stations can reduce labor while utilizing the vertical footprint of your facility. 

Depending on what is best for your operation, using conveyors to accumulate your folded linen can reduce labor by eliminating the need for employees to be stationed behind each ironer or folding system.

Laundry equipment and service distributors should be eager to assist with realistic payback analysis showing the advantages of new labor-saving laundry equipment solutions over existing operations. 

We generally recommend solutions that offer sufficient labor and utility savings that yield less than a five-year ROI. But with today’s volatile labor market, we are seeing eight to 10 year ROI’s being justified.

Increasing your throughput capabilities of pounds per operator hour (PPOH) should be a key factor in getting new laundry equipment solutions approved for your facility.

Consulting Services: David Graham, Performance Matters, Fort Mill, S.C.

Good day ALN readers!

It is my fervent hope that you are doing extremely well and that your operations are doing better today than pre-COVID. Many are doing just that! COVID is behind us, so let us accelerate smartly into our future.

There are many manufacturers that are recovering just as you might be. This offers you a great opportunity to get what you want at the price you can afford. How do you do it?

Be smart and be aggressive. Accessing new equipment may have never been easier but nothing lasts forever.

1.  Whoever purchases your equipment must get three competitive quotes for your needs and do it quickly. If the owner purchases equipment, the owner should get input from the team as to what they need to improve their operation. Getting them involved, since they may be closest to the action, makes complete sense. Get away from any top/down management and go bottom-up. Owners are smart but may not know it all. 

Some manufacturers and suppliers may have excess inventory and want to move it even at a low margin. Check for incentives whether they be manufacturer or governmental. Check with your accountant for tax advantages.

2. There are multiple ways to pay for these purchases. Cash is, and always will be, king. However, in this instance, we are using financing. 

We can get manufacturer financing in many cases and get it at very good rates. Remember, they are hungry right now. Your other option would be financing from a bank or other financial entity. Interest rates have never been better, and you should shop for multiple alternatives. Again, check with your accountant for tax advantages.

3. Calculating a return on investment (ROI) is a huge selling point to your senior leadership. A poorly thought-out or arbitrary request will only get you turned down immediately. Perform your ROI honestly and do it conservatively. Show them why this will help your customers, your employees and your company. 

You always want to under promise and over deliver in your ROI calculations. There are many models on the Internet that you can access, or I could certainly assist you. Just reach out to me. 

4. If you are challenged for financing, I have had many clients over the years utilize their valid service agreements as collateral. 

5. As far as products and other suppliers go, you, more than likely, have a primary supplier. You need back-ups always and forever.

Great pricing, great tickets to the ballgame and a smile from someone you love can only get you so far. If they cannot deliver the goods timely and completely, then you must look at your options.

Excuses to your customers for supplier inadequacies will only get you so far even with a great relationship. You will lose the business shortly.

In summary, be fired up and get your team fired up but execute like a surgeon when it comes to moving your team and operation forward. If you do not continue to invest in improvements, you may go out of business eventually.

Until next time!

Check back tomorrow with insights from healthcare laundry, equipment manufacturing and textiles experts!

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