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What Challenges Lie Ahead in 2006? (Part 1 of 4)

What issue or issues most greatly affected your operation and, more generally, your specific industry segment during 2005? What are the primary issues that your operation and your industry segment will face this year?CONSULTING: Chip Malboeuf is vice president of operations for Turn-Key Industrial Engineering Services, Charlottesville, Va. It provides facility planning and process improvement services for companies in the laundry industry. His experience includes process engineering and plant design.
Turn-Key Industrial Engineering Services is not your traditional laundry consultant. We’re an industrial engineering firm that focuses on the laundry industry, and the only licensed professional industrial engineering company serving this industry today.
We help laundries solve many issues ranging from improving the bottom line through process improvement, to designing a new laundry facility or renovating an existing facility, to disaster recovery analysis. I feel it will be more beneficial to readers if I address this question based on the types of issues our clients are facing rather than what types of issues we as consultants are facing.

Process Improvement

Laundries should always be focused on improving the bottom  line of their operation through continuous process improvement (lowering labor, utility and inventory costs to name a few). With revenue per pound remaining relatively flat, operators can improve the bottom line by lowering and then maintaining operating costs.
We’ve helped laundries identify bottom-line savings opportunities ranging from $45,000 to more than $250,000 per year. We helped one laundry lower its plant labor by 1.3% through the development and enforcement of production standards. After implementing the standards, the plant management team was trained on how to use the standards to improve flow through the plant and keep labor costs lower. The labor savings was worth more than $12,000 per month to the facility’s bottom line.
Another improvement opportunity is in energy usage. The rising cost of natural gas has placed added emphasis on energy conservation. We’ve helped laundries lower utility costs, as well as labor costs, through improved production scheduling, better equipment maintenance programs, and identification of other energy-savings opportunities (improved mechanical room systems, energy reuse analyses, etc.).
The laundry management team should always strive for continuous process improvement. Each individual improvement is incremental and may have a relatively modest impact by itself. However, the sum effect of all the improvements creates a substantial amount of cost savings for the facility.

Facility Planning

The laundry industry continues to grow. With this growth comes the need to increase efficiency and/or capacity to service the expanding customer base. Many of our clients are planning for the future through development of a master plan. The future may entail building a new facility or expanding the current facility. Planning for either option is made easier through the development of a master plan.
This process allows the laundry to identify its current capacity and what it will need to meet its future growth while maintaining a balanced flow through the plant. The master plan provides a road map for the laundry to follow, providing information about when to add equipment, where to add equipment, staffing requirements and utility usage.

Disaster Recovery Analysis

The devastating disasters that have hit many of us personally over the past two years have heightened everyone’s awareness of disaster recovery planning.
Does your facility have a business continuation plan? Does your business have enough insurance coverage so that it can continue to serve your customer base and rebuild the laundry? We’ve helped clients examine these questions and others through a disaster recovery analysis.
This analysis not only helps the facility determine if it has enough coverage, but also if it has the correct coverage. The analysis documents the cost to continue business (relocate offices, replace inventory, set up warehousing, etc.) and the cost to rebuild the laundry. Most laundries discover that their coverage not only doesn’t cover the cost to rebuild, but the policy also has inadequate business continuation coverage.
Documenting all the costs associated with a business continuation plan and rebuilding costs can be an enlightening experience. I can’t stress this enough. Facilities need to be prepared for any type of disaster that may strike them.

Looking Ahead

Our efforts will continue to focus on the issues facing laundries throughout North America and the Caribbean. During 2006, we’ll continue to identify improvements and opportunities that will allow laundries to grow and better serve their customers through a safe and efficient operation, all while enabling the laundry to become more profitable.EQUIPMENT DISTRIBUTION: Jeffrey Barman became co-president of PWS-The Laundry Co., a full-service with offices throughout the West and Southwest, in 2005. He was CEO of LuckySpin Laundries, a PWS affiliate that acquired and sold the SpinCycle chain of coin laundries.
For PWS Inc., the biggest OPL equipment distribution operational issue in 2005 was managing our growth. We expanded our geographic footprint from California and Nevada to include Arizona, New Mexico and Texas, opening full-service offices in Phoenix, Albuquerque and Houston. In conjunction with this expansion, we added new lines of OPL equipment which, while very exciting, brought with them the attendant issues of training and marketing.
In 2006, we foresee our biggest operational issue to be adding suitable labor to our service staff. Providing timely and high-quality service is one of our highest priorities but we anticipate it will be increasingly difficult to find the employees we will need to fulfill our operational goals.
We’re considering recruiting and relocating experienced technicians from outside our territories, while also focusing on adding entry-level talent to the staff to go through long-term training.
We feel sure that many of our industry colleagues share our concern on service staffing levels, but we also believe that an over-riding issue, especially in the first half of the year, will be the cost of natural resources. This includes, of course, but is not limited to, the cost of natural gas.
Our outlook for 2006 is quite positive, for both our fellow distributors and our collective customers.

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