After lockdown: Operating profitably at 50% capacity28 September 2020
As locked-down hotels reopen over the summer, hospitality laundries are likely to find business slower than back in the good old days pre-Covid-19. Richard Neale of LTC Worldwide has some ideas on how newly re-opening laundries can work their way into profitability even when running at reduced capacity.
It could be two years before the hospitality industry worldwide is operating back at 100% capacity in all sectors, for both business and leisure. Leading chemicals suppliers are coming up with some novel ideas and major machine manufacturers are expected to follow suit shortly. This month, LCNi looks at the management actions which could make all the difference, without any significant investment. Strong discipline and a sound knowledge of laundry technology will support the return to profitability, while everyone gets back to normal.
You may need to take control of unused linen stock lying in hotels which have not re-opened or in closed-off floors of underutilised hotels. You will not have enough free cash to maintain your circulating stock without linen purchases, if you allow any stock to lie idle and not earning its keep. Linen is so valuable that it is worth devoting time and space to getting this right. Minimising stock lying idle on hotel shelves will also help the hotel to maintain correct linen circulation and assist basic security. You have probably already paused any unfulfilled textile supply contracts and your aim should be to manage with what you already have, until you are close to your old volumes.
You must get the maximum life out of every piece of linen rental stock which you own, by following the advice published by LCN1. You need to confirm this by continuous monitoring in a slightly different way to how you might have done it before. The standard technique is to divide your issues for each classification (over, say, a six-month period) by the number of new items of that classification injected over the same period, in order to maintain the service. You should no longer be buying any new stock. Instead you will be injecting your ‘second-hand’ stock, rescued from idle hotels when you re-started operations. Your average life will be less than it would have been with new stock. Initially it should increase up to around 200 cycles and then slowly drop back, but it should never fall below 100 wash and use cycles.
One major challenge in order to ensure linen life may be the laundering of soiled linen that has been sitting at your clients premises for three months. Therefore, dialog with your detergent partner may be required to ensure aged staining is effectively dealt with, whilst minimising chemical damage.
If you are only operating at 50% capacity, then you need to attempt to maintain your transport costs at as close as possible to 50% of what they used to be. This means a root and branch review of your transport arrangements, thinking outside the box and potentially either operating with only half of your drivers and vehicles; or, if you are optimistic about volumes building quickly (and have an agreeable staff) you could open up with all your vehicles and staff, but only work them for half their normal hours. Some national government support schemes (in the UK for example) are designed to support this financially.
Sorting and washing
If your washhouse is based mainly on washer-extractors, then you are probably best to operate all of them, because this gives you the flexibility to match the load size to the machine capacity and will not cost any extra. You need to avoid underloading if at all possible, because a machine loaded to 50% capacity will incur double the normal unit wash cost per item. This also means that you need intelligent sorting, merging small classifications if necessary. Your sorting supervisor’s aim should be to process only full loads, with no significant over-loading or underloading.
Remember that wet towels can contain around 23% moisture, so you may consider taking this into account in your loading factors after discussion with your detergent partner and equipment supplier. You can verify the safety of this simply by regularly check weighing a few of the towel loads as they leave the tumble dryers.
If your washing is based mainly on CBTWs, then you should control these carefully. If you have two or more then you should aim to operate only one, but this may cause a bottle neck in drying. It costs a lot in water and energy to stop a CBTW when it is working intermittently, and this cost varies with the washer design. The best technique is probably to work out the machine hours needed to process the day’s workload and then get your supervisors to stick rigidly to these. The team will quickly get used to the discipline involved and you will save a lot in ‘invisible’ utilities.
Tumblers are usually the most energyinefficient pieces of laundry equipment. The cost implications are made worse by the fact that drying demands far more energy than washing, especially for towels. Economy starts with hydro-extraction, because it is fifteen times more expensive in energy terms (per litre of water evaporated), to evaporate the moisture in the dryer, than it is to spin or squeeze it out. This calls for maximum spin speeds in the washer extractors, for the right spin time, and at least 30 seconds (preferably 60 seconds) at full pressure in the membrane press.
Ironers use less than half of the energy of the tumbler (per litre of water evaporated), so it makes sense to minimise conditioning of sheets, pillowcases, duvet covers and table linen. Only use the tumbler to open out the flatwork items and never to enable higher ironing speeds.
Direct gas-fired tumble dryers are generally much cheaper to operate than steam-heated ones, because all of the products of gas combustion go into the drying air stream, with no losses to the boiler flue, steam distribution system or condensate collection system2.
When capital does again become available for limited investment, it is worth fitting automatic cycle terminators to your gas fired dryers. If some of your dryers are dedicated to drying towels, then just retrofitting terminators to these gives an even quicker payback.
As with CBTWs, if you have two ironers, you should really aim to operate with just one, which means examining your procedures carefully. You may need to move your sheet feeder aside for part of the day, in order to hand feed small work, unless you have a very versatile feeder on one of them. Of course, the easy solution is to keep them both hot all day, but this is almost certainly the wrong decision. A hot but idle ironer will probably be radiating up to 15kW of heat energy, wasting around 30,000 kWh per 2,000-hour year and costing you around £1000 p.a. Can you really afford to do this?
Getting through all of your work with just one ironer calls for strong discipline and some thoughtful engineering. Minimising moisture retention from washing is just as important as it is for towelling, which will also help when you minimise or eliminate conditioning in your tumblers. If, even then, you have higher moisture levels going into the ironer you may have to compensate by slowing the ironer slightly, offsetting this by maximising bed coverage. The objective is to maintain or improve on your historical productivity. Asking your engineer to re-tune the ironer to improve its performance often brings unexpectedly encouraging results. Eliminating cold spots and variations in steam pressure should pay immediate dividends. Matching precisely the diameters of the clothed rolls to that of the beds and improving the vacuum extraction will both improve heat transfer.
Overheads Controlling your fixed costs might involve some of the most difficult decisions, but you cannot afford to duck these. A large laundry often has justifiably high overheads for management, administration, financial control and so on. A full staffing review, based on local circumstances, needs to be undertaken now and as circumstances develop. If your supervisors are ‘working supervisors’ whose hours are included in the ‘pieces per operator hour calculation’ (PPOH), then you simply need to ensure that they spend most of their time on the workroom floor as a leading operator. It is the desk hours which you need to halve, which includes managers, directors and owners. If you are to continue paying non-productive staff, then the hours for which you are paying must be effectively halved and that can lead to some hard deliberations.
Well run laundries usually monitor labour productivity by measuring pieces per operator hour (ppoh), achieving results which vary from close to 200 ppoh right down to only, say, 60. Seasonal laundries serving the summer leisure market frequently fail to achieve in winter the productivity they can boast about in summer. The best way of controlling this is to estimate the workload in pieces in forthcoming weeks, whatever the season, and only allow operational staff the hours to deliver this at the summer ppoh productivity rate. If this sounds difficult that is because it is difficult, but hard times are likely to be with us for the next two years and this might be the only way for many laundry and rental operators to survive. Many laundries are looking closely at operating hours and going from two shifts to one or only operating on Monday, Wednesday and Friday, so again think outside the box when considering alternative working patterns.
This month we have concentrated on making the laundry still profitable at half of the historical volume right across the board.
In a future Material Solutions feature, LTC Worldwide aims to concentrate on two of the major costs after labour, which are water and energy, where most have major savings still possible. By then you should aim to have finished the suggestions made here. The worst thing you can do now is to do nothing.