Equipment/Supply Distribution: Janice Ayers Davis, TLC Tri-State Laundry Companies, Valdosta, Ga.
Janice Ayers Davis
Where did all the linens go?
Scrubs return home with the doctor. Pillows, gowns and blankets exit the hospital with the patient, soiled washcloths get flushed down the toilet, placed in the hazmat bag, cut into rags, or often end up in the morgue, funeral home or furnace.
The hospitality folks have heartaches of their own, to include textiles checking out with the travelers, bath blankets ending up at the pool down the street.
A few scenarios:
- The ambulance service just dropped off a patient and picked up extra linens for additional patients.
- The nurse is frustrated with the linen shortage and discovered a secret hideaway for extra pillows, sheets and bath blankets.
- The tech sends the new mommy or patient home with extra comforts to include blankets and pillows.
- The hotel guest uses the textiles for shining shoes or mopping up, creating difficult-to-remove stains.
Linen loss through misuse, abuse, stockpiling and wear-and-tear create tremendous stress for healthcare and hospitality staff, the on- or off-site laundry managers responsible for processing the linens, the vendors that supply the textiles, the finance folks, and, most importantly, the end user.
Regardless if you are a supplier or recipient, it is “dirty laundry,” literally and figuratively speaking. Each segment of the industry has its challenges allocating and securing the proper amount of textiles.
The impact that insufficient inventory has on hospitality, healthcare and other segments are significant, including:
- Increased overtime.
- Lost sales.
- Hospital scores are affected and the funds allocated to the hospital impacted.
- You can’t transit a patient to a hospital room or a guest to a hotel room if linens are not available.
- The budget is shot, based upon additional product being ordered to cover for the loss.
- Extra linen is purchased in an effort to quickly meet the accelerated demand for additional linens.
Based upon the input of dedicated professionals, providing continued education and communication with the staff increases awareness and decreases loss.
Grover Evans, laundry manager for Emory Health Systems, is one of many of these professionals. He meets daily with the Emory leadership team and shares obstacles and solutions. Grover walks alongside his laundry team and maintains a line of communication with his textile supplier in order to meet last-minute emergencies.
Based upon continued technology, such as RFID chipping and dispensing machines that track volume and/or weight, coupled with tried-and-true best practices, the harsh impact of linen loss will continue to be minimized.
Networking and speaking with peers, as well as getting involved with a local or national chapter of Association for Linen Management (ALM), subscribing to industry magazines, such as American Laundry News, or posting your questions on a website such as ALM Forum Discussion Digest can be helpful.
A special thanks to John Highsmith, consultant; James Forlini, CLLM, sales professional; Grover Evans, laundry manager; and Loyd Hill, hospitality consultant, for their wisdom and contribution to this article.
Consulting Services: Sam Spence, TBR Associates, Saddle Brook, N.J.
Purchasing and inventorying textiles in a linen rental business can be a tricky proposition.
To generate income, textiles must be in circulation, not sitting on a shelf in a stock room. Cut it too close, and we do not have the product needed to service our customers.
Following Lean Six principles, excess inventory is identified as one of the “Eight Deadly Wastes.” For these reasons, several factors should be considered when deciding what stock inventory to purchase and when to purchase it.
Product shortages affect plant operations in several ways. First, shortages create special deliveries, which are costly. A route supervisor’s time could be better spent performing customer service duties as opposed to making emergency deliveries. It is also costly to operate delivery vehicles.
All in, expect to pay about $1.50 per mile making deliveries. This can add up quickly.
Additionally, inventory shortages lead to packing errors in the plant. Routes are most efficiently and reliably packed when plant staff can begin a route and fully complete it before moving on to the next. By having to circle back to finish one last item, or divide short product up among the routes, errors occur.
Finally, shortages lead to customer ill will, which leaves us vulnerable to our competition and product hoarding. One of the first questions asked by a competitive sales representative will relate to shortages. If that pain is uncovered, the account could be in jeopardy. If our customers do not trust us to make complete deliveries, expect them to hoard our product.
We can take several steps to reduce these risks. First, identify your top movers. These are the items, such as bar towels and bib aprons, that most customers rent and are delivered on every route. Run weekly usage on these items and determine an average daily need.
Depending on your replacement budget, you can expect to replace 10% of these items weekly. Following this math, you should always have a half-day supply of these items in stock.
I am a firm believer in budgeting, and a linen replacement budget, properly managed, can be very helpful. Replacement budgets vary quite a bit from company to company, sometimes net of replacement charges, sometimes not, but the fundamentals remain the same. Calculate average replacement rates of your products and dedicate 85 to 90% of your budget to these products by injecting it monthly.
The remaining budget should be reserved for unexpected or less predictable replacements. The goal here is to make inventory replacement a simple, repeatable process while managing costs.
Remember to consider freight breaks when ordering. Most textile suppliers provide free freight on orders over 1,500 or 2,000 pounds. If your order comes up a bit underweight, consider adding a bale of your heavy movers, such as bar towels or wash cloths, to make up the difference.
Finally, implement a Kanban system in your stock room. This involves posting simple cards on your shelves indicating the upper and lower inventory limits as well as package quantities and order quantities for every item kept in stock. When inventory levels fall below the limit, it is time to order more.
By taking these simple steps, we can be sure to manage inventory effectively and properly service our customers.
Healthcare Laundry: Gregory Gicewicz, Sterile Surgical Systems, Tumwater, Wash.
It’s early December and the weather has taken a nose dive. Flu season has kicked into high gear. Linen orders are through the ceiling due to high patient census, patients squeezing elective procedures into the calendar year, and holiday preparations. Fortunately, you upped linen orders in anticipation. But it was not enough! Sound familiar?
Or … it’s mid-July. The weather is balmy, school is out, flu cases are down, and doctors are on vacation. Soiled linen returns are minimal. Customer linen orders are smaller, but not small enough to account for the small returns. Do we order more linen to hit the orders? Or short the customers?
Linen costs are typically a laundry’s second largest expense, after labor. Effectively managing linen inventory can be the difference between success or failure. Trimming down linen purchases can help the bottom line. But customers with inadequate inventory will leave. Conversely, customers with abundant fresh new linen are great for satisfaction scores. But they can drive us into the red.
Therefore, how effectively we manage linen inventory influences customer satisfaction and our financial health. Effective linen inventory management requires accurate measurement, effective budgeting and clear customer expectation setting.
To manage linen inventory, we must first accurately and regularly measure the key indicators. We need to quantify how much linen customers need based on item usage, typically as some multiple of delivery frequency versus patient days/procedures/or another volumetric measure. For example, if a clinic does 90 procedures per week, each one requiring one bath blanket, a flat sheet, a pillowcase, and a patient gown, and we deliver three days per week, then we will need to ensure they receive more than 30 of each item per delivery.
We also want to measure returns by weight or by item. If by weight, one can expect back between 7% and 11% more than was sent out. Next, we want to compute linen vendor pricing. Finally, we must measure loss rates attributed to ragout, theft and damage.
With these key measurements, we must now set a monthly linen budget, taking into account linen costs, linen replacement rates by customer, based on the above, and seasonal volume fluctuations. Finally, we must have an expectation-setting meeting with customers where we discuss these topics and build parameters into their contracts where they are charged for excessive verifiable losses.
With a customer that is losing (or hoarding) excessive linen, collaboration and education backed by data are always the best policies. Show their clean/soil ratios; show linen they are damaging and explain alternative practices; teach how to order properly and not hoard linen; instruct on proper bed makeup policies that conserve linen. They will thank you for helping them manage their linen, and you will reap the benefits of a manageable linen budget.
As a last resort, if losses don’t improve, you must pass on these costs. Put this in your contract!
Always remember … it is better to provide an adequate supply of linen to customers and charge on the back end than to short critical items and potentially impact patient safety.
Miss Part 1 with insights from experts in commercial laundry, textiles and uniform manufacturing? Click here to read it.