Proactive Laundry Equipment Replacement Plan for Solid ROI (Conclusion)

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Planning and communication are key to developing a laundry equipment replacement strategy. (Image licensed by Ingram Publishing)

Matt Poe |

Tracking, quantification essential in replacing machines, experts say

CHICAGO — TMI Hospitality, which manages nearly 200 hotel properties in 26 states, uses equipment built by Alliance Laundry Systems in its laundries, according to Sid Lien, TMI vice president of procurement.

He says the company has found the equipment lasts 20 or more years. 

“The question we had to ask ourselves is, ‘Should we maintain equipment this long?’” Lien says.

MEASURING UP

“I like to say that you can’t improve what you can’t measure,” says Bill Brooks, North American sales manager for Alliance’s UniMac brand. “So, getting a baseline and then focusing on bringing equipment-monitoring technology that keeps an eye on operations to prove out the ROI of new equipment and ensure the operation maintains a high level of efficiency is a prudent path.”

Lien says TMI Hospitality has an asset-tracking mechanism that allows visibility to the number of times equipment has been repaired and at what cost.

“The goal is to stay on top of this so equipment is replaced proactively rather than reactively,” he says. “There are times, however, when a machine will go down and the quoted repair cost does not make sense when compared to replacement. This has a compounding negative impact.”

The repair may still be necessary to keep the laundry running, according to Lien, but replacement may soon follow to avoid more unexpected operational downtime and related costs.

He says having a replacement plan is the best method for two reasons.

“First, you have a plan to follow, and, second, you are able to create a matching capital budget that removes year-to-year fluctuations that are inevitable without a detailed plan,” Lien says.

There are typically three ways a centralized operating organization will handle this, according to Lien.

Some procurement platforms have asset-tracking functionality. Other organizations maintain an asset-tracking database (e.g., Microsoft Access) for similar assets, such as laundry equipment, heating and cooling, etc.

Finally, some manufacturers or distributors have the ability to provide reports that show equipment age and the cost of replacement parts. Each of these options will help in creating a schedule, according to Lien.

Rick Murphy, sales manager for Whirlpool Corp. Commercial Laundry, says a facility manager or operator needs to know the number of years the equipment operated before needing to be replaced in helping to create a schedule. Also, managers and maintenance need to be diligent in documenting operations, and make sure a preventative maintenance program is in place. 

However, Murphy cautions that laundries need to be aware that circumstances and events can change a replacement timetable. 

“Say a laundry facility is in a hotel, and that hotel sees an increase in business. It is likely the equipment mix will need to be updated, which could mean replacing old equipment to maximize space,” he says. “Recognizing this change as it’s happening can help facilities manage schedules long-term.”

Lien says a laundry should review its maintenance records and the equipment replacement schedule. After that, quantify the benefits that will be gained by replacement (i.e., time, energy, etc.). Finally, he says that if competing manufacturers or distributors are going to be considered for equipment replacement, start the process at least three months prior to the designated replacement date.

“By doing this, you allow time to review equipment needs, equipment specifications, potential utility rebates, the equipment removal/installation plan and all competing proposals,” Lien says.

Brooks says an important first step for laundries seeking to plan for equipment replacement is to meet with a distributor and obtain a quote for what equipment is needed to meet the demands of the laundry.

Murphy says that manufacturers and distributors should be used as a trusted resource. They’re often accustomed to industry trends and new product innovations, and can guide laundry and linen service providers as needed.

A laundry also needs to determine the production parameters of the new equipment, according to Keith Ware, vice president of sales for Lavatec Laundry Technology Inc., including the development of a layout for it. Is it bigger in size, does the laundry have enough utilities, and does the plant have the ability to process in other departments the added volume? 

“Often, we see someone purchase a new tunnel that produces more than the finishing department can take away,” says Ware. “If finishing is not designed to handle the added volume, will your new tunnel be handcuffed by the downstream departments?”

Brooks also recommends completing a laundry cost analysis study to understand if new equipment changes production outputs.

Miss Part 1? Click here to read it.

About the author

Matt Poe

American Trade Magazines

Editor

Matt Poe is editor of American Laundry News. He can be reached at mpoe@atmags.com or 866-942-5694.

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