About 10 years ago there was a general agreement that workwear rental was where the profits were being made. Linen hire was seen as being fraught with problems, with stock “vanishing” into thin air and mysteriously appearing at car boot sales throughout the land. Back then it was almost de rigueur for hotel guests to carefully pack at least one towel into their luggage, with a consequent loss of stock at the laundry.
Hotel housekeepers logically argued that as the linen was not on their premises, it must be in the laundry. This was often followed by a request to “get round here as quickly as possible, as we’ve run out of stock”.
Workwear, on the other hand, was seen as a very steady business. All you had to do was to issue a set of three garments to each wearer, charge for the rental, plus processing of one item per week and then sit back and wait for the wearer to have holidays, go on sick leave, go on extended holidays, or just not bother to send his garments in. It was even better if the laundry “lost” a few garments, as then the more conscientious wearer would take his garments home for laundering. Brilliant!
Easy profits
I remember when first getting involved in the workwear rental industry and developing computer systems for monitoring the day-to-day usage of garments, that in some cases a presentation rate of 10% was the norm. It wasn’t difficult to work out how profitable rental could be! So what went wrong?
Why are we now seeing articles in the press telling us that workwear will one day (perhaps) be profitable again? How is it possible to lose money when the basic arithmetic dictates that you can’t lose? Why are companies insisting upon contracts with separate rental and laundering prices, reducing your income from the ‘process gap’?
Hopefully, this article and the others in the series will provide some of the answers. We start by looking at the first steps: taking on the contract, purchasing the stock, issuing the garments, and controlling the charges levied.
Control is the first step on the path to profitability in the workwear sector. Control is essential. The world’s largest businesses didn’t get there by accident. They did it by total control, which extended beyond their production plants; reaching backwards into their suppliers’ plants and forwards into their customers’ marketing of the end product; encompassing advertising, merchandising and aftersales monitoring of customer satisfaction levels.
Quality control
However, during the last quarter of the 20th century “control” became more narrowly focussed by the prefix of “quality”. External auditors were appointed to check the levels of control that were defined in the quality manual.
It is relatively straightforward for industries that merely buy and sell goods to introduce a control system. Goods are ordered, received, inspected, accepted or rejected; then the accepted goods are placed in available stock, before being sold to customers. Quality control is reasonably easy to build in.
Call centre
Similarly financial institutions such as banks can easily introduce call centre technology, allowing your call to be answered by any available operator. The control is applied by the caller, who identifies him/herself by a password, prior to gaining access to the information at the operator’s fingertips.
Workwear rental is different. This hits home at the point where the caller says: “I am Jim Andrews and I haven’t got a coverall in my locker. Where is it?” No matter how efficient the original quality control the garments were inspected, approved, labelled, packed, delivered and signed for now the wearer says that his locker is empty. Control has to extend beyond the buying and selling of the product and needs to take in areas such as collection, processing, repairing, packing out, and delivery back to the customer premises even down to loading the individual locker compartments.
Control, in a workwear rental environment, needs to have more “tentacles” than a pair of octopi doing a quickstep! Control also walks hand in hand with the second essential factor accuracy.
Let’s look now at the steps that need to be taken to ensure a successful implementation of that hard-won workwear rental contract.
Steps to success
Why should the wearer of an extra-large garment pay the same rental price as the wearer of the regular garment? In the past the answer would have been: “Because we can’t manage the contract any other way, therefore we use an ‘average’ price.”
But an average-price policy means that the control you can apply is limited. The addition of 10 tall wearers to this contract can result in a small profit becoming a small loss.
There are modern computer systems that will easily enable you to replace the word “average” with “precise”. There are companies using modern technology to collect vast volumes of data through the proper use of garment identification and a total tracking system. The data may never be required, but when Jim Andrews calls with his query, the answer can be quickly and accurately given.
Doesn’t it sound better to say “Jim, we have one of your garments in the laundry, awaiting new pockets, and the other two were delivered to your premises on March 3 and March 14,” than to say “We’ve no idea where any of your garments are, I’ll put you through to stores who’ll sort you out”? For we all know what happens next. Another garment leaves the stores without documentation. Worse still, from the day of issue, it then gets processed for free. Control is therefore an essential element of contract management.
The first step is to agree with the customer that the rental element of the contract will vary according to the size of each wearer. Larger sizes cost more than regular sizes and this should be reflected in the rental charges levied.
Then we need to ascertain who will wear the products we supply, and to record how many changes per week will be required. Some wearers, such as maintenance staff, may only need to change once per week, whilst packers in a food plant may need to change at least once per day. Using pre-shrunk garments, each wearer is supplied with the correct garments and the size recorded. The completed list should then be printed for the customer and formally agreed and signed for. Now the fun begins!
The wearer list is used as a basis for ordering garments from the relevant suppliers. At this point a control tentacle should be placed in the stores. Do we already have some of these in stock? Answer: “Don’t know boss, we’re too busy to check, so we’ll just order them all anyway. Besides, the extra stock is bound to come in useful somewhere, isn’t it?”
The problem is that this scenario keeps repeating itself. It’s easier to order all the garments than to mess around checking in the stores isn’t it? Yes, it is, but don’t forget that dormant stock is dormant money.
A computer system that can automate the entire process will quickly produce a picking list for available stock in the stores, plus purchase orders for the remainder. If the stores controller has a workstation handy, then the chances are that it will be used. Proper control of stock will then pay dividends quite quickly.
Saving money
The use of a “just-in-time” system can help to reduce stock levels by £1,000s within the first year of installation. The purchase orders will need to be received in time to enable the stores staff to print labels for each wearer’s items, with the label containing every piece of required information, from a choice of locker number, wearer’s name, product code and size, plus, of course, the relevant contract details. Please don’t even think about printing the day and the route number on the label, as this makes life awkward when the transport manager needs to re-organise his routes and move this contract from a Monday to a Thursday.
The label can also contain a barcode, which uniquely identifies the garment. I’ll deal with the importance of this in another article. As an alternative, an RF-ID (transponder) device can be sewn into the garment if required. This achieves the same objective as a barcode but gives a quicker read rate in the processing plant. This might be a specific requirement for some food contracts, where a rapid turnaround of garments is called for. The higher cost of using RF-ID can be outweighed by the quicker scanning rates and by using daily deliveries to reduce the number of garments in circulation. However, the potential economies of this should be examined carefully. It is beneficial to use software systems that work with both barcodes and transponders, enabling you to use the higher cost product only where it is either needed, or is customer specified.
After the garments are correctly labelled they are normally put into banded “wearer packs” and then delivered to the customer premises, where they should be checked by the customer and signed for. The associated paperwork should list the names of each wearer and the products rented, as well as listing the unique identification codes.
Locker problem
This step is important, as there has been an odd instance of garments being delivered and then placed in lockers that were the property of another laundry supplier. That supplier then, quite correctly, withdrew those lockers, including the brand new garments. Not only did it take two weeks to get them back, the wearers had to manage with temporary garments loaned free of charge by the new laundry supplier. A signed delivery note is the only definite proof that the new garment stock has been handed over to your customer and is obviously very useful when situations such as this arise.
To summarise, there is more to the setting up of a workwear rental contract than appears at first sight. There are a series of decisions to be made by various departments. Purchasing errors can be very costly, as can fitting errors, as can a lack of control of the garments. It is vital that at all times the contract is properly managed, but special emphasis is needed in the early stages, to ensure a positive and confident relationship with the customer who uses the product.
In the next article we’ll look at the reasons for using barcodes or transponders and the importance of these to every department within the laundry. The different types of contract will also be looked at. We’ll discuss how one company in Manchester has progressed with their barcode system over the past decade.
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