Volume business

All commercial laundries are challenged to achieve the labor and utility efficiency needed to reduce expenses. The smaller the volume, the higher the cost of many key supplies per pound produced.

By contrast, economies of scale reduce the possibility that a laundry will become more expensive and less environmentally friendly. A decision to build volume by adding sister facilities' laundry work or outsourcing maximizes potential to increase efficiency.

But it restricts the flexibility to wash whatever goods you want when you want them. Environmental services professionals are challenged to judge whether the more supple approach justifies continuing to invest in a dedicated on-premises laundry (OPL).

Alternative arrangements

As scarcity of supplies that are dependent on harvesting natural resources such as energy, water and natural textile fibers fluctuates and their pricing varies accordingly, the stability of alternative health care laundry arrangements often becomes more attractive.

Renting linens instead of owning them as part of a laundry contract with an outside provider greatly simplifies the function and often is the most efficient choice. Rental laundry operators organize the laundry work from hospitals and health care facilities so they can share textile product inventory. Huge washloads make for economies and high efficiency in operating washing, drying and finishing equipment. On a per piece basis, these savings could be one-third to one-half the energy requirement of a small OPL and one-fourth to one-third of the water needed.

Of course, machinery efficiencies can be achieved through outsourcing techniques other than rental. A commercial facility that contracts its laundry work for hospital-owned goods delivers these. A co-op laundry sized properly to handle at least several hospitals with outpatient facilities providing additional work can produce enough volume to return the joint investment in high-capacity equipment and associated infrastructure. The latter offers the option of the co-op hiring its own management or contracting the facility's operation to a commercial launderer.

A third possibility is for a hospital to continue to wash some items in-house, but outsource specialty items with other hospitals to a commercial operation. This strategy is focused less on laundry efficiency and more on providing economic benefits and maintaining a positive relationship with the community.

Making the decision

Every operation in every business steadily revisits whether to leave the current operation relatively intact but improve its endurance or change to another option. The most efficient choice is usually the one found to produce better, faster and cheaper results due to an evaluation that looks broadly and objectively at the end-to-end cost and relative impact of all options.

High-quality service provided on time is the most popular argument for keeping a small-volume OPL. However, underloaded equipment sometimes jeopardizes this quality and raises labor and supply costs. In addition, measures of textile appearance, cleanliness and timeliness such as rewash, reclaim and discard rates that impact the quality of goods in service are sometimes not tracked.

The case for perpetuating any laundry is strongest when plant costs are tracked to prove they are not rising dramatically per pound produced. This starts with separately metering the laundry's utilities to ensure an accurate reading of its water and energy use. It's important to gauge equipment efficiency to reveal whether washing machines are using more water than they should or a boiler is as efficient as it used to be.

Likewise, an equipment life forecast should be conducted, including an assessment of the financial capability to replace and upgrade it. Better machinery almost always translates to better cost control by providing for less water and energy depletion per pound of laundry.

Amounts spent on textile inventory also need to be documented. Linen investment is sometimes limited to fewer par levels because less time elapses between when goods are taken off beds and the same ones are placed back on. But goods so frequently deployed often must be replaced sooner because they wear out faster. A good sustainability analysis would evaluate alternative textile products objectively with a return-on-investment analysis independent of current vendors. Ongoing studies to address abuse, misuse and waste of goods are needed as well.

Individual worker productivity also should be measured to determine true employment cost with pieces or pounds per hour measured for every production worker. Real-time systems are available to automate such measurement. Also at the heart of labor expense is the cost of laundry staff turnover, higher-priced benefits and workers' excessive idle time. Expertise is a labor issue as well. Is there a succession plan in situations in which one individual has managed a laundry facility for a long time?

Finally, the likely future demand for hospital laundry services should be determined. How is the workload being affected by changes in the hospital's inpatient-to-outpatient business ratio? With outpatient volume growth expected to far outpace inpatient volume growth, bed linen requirements may decrease while the need for patient gowns and other products associated with ambulatory care increases. How well is the operation positioned to handle this and any other anticipated change in business?

Proper documentation and quantification of each of these factors can provide the basis for comparison with locally available alternative laundry business models: co-op, outsourced laundry-only service or linen rental. The hospital can rate the efficiency factors in the alternative operations to assess how cost and quality would fare with each, leading to the choice of the most efficient option.

Underlying these efficiency measures is their link to economies of scale. The more pounds of laundry handled, usually the more repetitive the processes, facilitating greater quality control; the more expensive the equipment, the easier it is to justify the use of machines with components that conserve utilities and incorporate robotics, decreasing water, energy, chemicals and labor costs; the more efficient the manual tasks, the easier it is to increase pounds per operator hour as individuals refine their skills; the more abundant the inventory, the more it will decrease the cost per piece; the more experienced the management, the more likely they'll use a greater variety of operating techniques to improve effectiveness; and the more numerous the laundry customers, the more likely there will be work in the foreseeable future.

Sustainability issues

A related issue involves the use of reusable textile products instead of their disposable equivalents. With insourcing's higher investment expense per piece and laundering cost per pound, outsourcing makes the choice of reusables even more efficient and environmentally friendly in operating and patient rooms.

Manufacturers of disposable packs must include a wide variety of items to cover all possible surgical scenarios, which often leaves many items unused. Once a pack is opened, it's contaminated. All contents must be used or they're wasted, as everything must be incinerated or landfilled.

This can be a substantial solid waste generator. In 2003, an operating room (OR) nurse at a Washington, D.C., hospital was asked to save all the excess materials from disposable OR packs for one week. By the next day, she had already filled her office with the waste.

Another example that favors reusable products is the patient gown. Most hospitals avoid paper, but some don't. Disposables cost more and cradle-to-grave sustainability studies confirm textiles are better for the environment. Additionally, more water is needed to manufacture a disposable gown for a single use than to wash a reusable for its lifetime.

The historic pattern for increased sustainability involving laundry is to substitute reusables for disposables and to wash, dry and finish in the largest machinery possible. Once disposables are out of the picture, they don't come back.

Repeating the process

However a health care facility launders, this assessment process should be repeated periodically, factoring in how the business has changed.

Efficiency is the most cherished laundry attribute, because best practices in textile services combine the green of monetary savings with the green of resource conservation.

Bill Mann is director of industry affairs for the Textile Rental Services Association. He can be reached at bmann@trsa.org.