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RETHINKING THE LAUNDRY PROCESS

Jeffrey F. Solarek, CMRP, CPIM. C.P.M., CIRM, APP, CPCM, CPSM

03-02-09

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Table of Contents

1. Abstract Page 3

2. Project Overview Page 4

3. Improvement Process Page 5

4. Results Page 11

5. Innovation Page 13

6. Sharing our knowledge Page 14

7. Supporting Documentation Page 16

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ABSTRACT

Linen expenditures and laundry processing account for a large portion of our six

members Health Delivery System’s (HDS) budget. As a part of our of our continuous

improvement quality process, we identified the need to streamline our linen and laundry

operations in order to improve efficiencies and drive out costs. Our goal was to utilize

modern methodology and technology to implement and sustain linen and laundry best

practices – therefore driving savings and nursing satisfaction throughout the system.

A cross-functional team from the areas of Laundry Management, Supply Chain

Operations, and Strategic Improvement was created to identify and implement process

improvements. This team mapped current processes in the areas of production and

distribution. They then determined desired “end-state” goals for the laundry operations,

including baseline metrics and flow requirements. Existing processes were then

amended to achieve these end-state goals.

As a result of this linen and laundry process improvement initiative, our HDS has

experienced significant reductions in operational costs and processing errors. We have

increased focus on laundry compliance, cost reduction/containment, standardization

and utilization, and we have greatly improved our nursing satisfaction ratings.

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PROJECT OVERVIEW

Project Title: Rethinking the Laundry Process

Challenge

Linen expenditures and laundry processing account for large portion of our Hospital

Delivery System’s (HDS) budget. Our six member hospitals spend in excess of five

million dollars per year on linen for our patients. We identified the opportunity to

increase savings and improve customer satisfaction by driving out inefficiencies and

costs with our laundry processing. Some areas presenting opportunity were:

Improve flow of soiled and clean linen

Increase linen standardization

Enhance linkage/communication between the laundry, hospital linen distribution

and nursing

Eliminate unnecessary laundry handling and other unproductive activities

Improve safety and ergonomics of our laundry employees

Reduction in cycle time of soiled laundry processing

Diminish inventory tie-up with unnecessary levels of linen

Increase internal customer satisfaction by decreasing frequent stock outs

Cut down space constraints, due to excessive laundry

Focus on cost reduction then cost stabilization

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Opportunity Evaluation

Laundry process improvement was identified as an area with high potential rewards

based upon its large impact on our organization’s nursing satisfaction and budget.

Industry studies prove that deployment of lean techniques and philosophy enable an

organization to reduce number of processes, touches, travel, and mistakes, as well as

standardize work – all leading to cost reduction and improved customer satisfaction.

Vision and Leadership

The Chief Purchasing Officer, Director Material Management and Director of

Strategic Improvement recognized the savings and improved customer service potential

afforded to the organization as part of the opening of a new laundry plant. They

proposed the re-engineering of some of our laundry and distribution functions to better

utilize the new laundry facility. These concepts were presented to the laundry

management team who agreed that improving our laundry flow and procedures would

greatly benefit the organization.

IMPROVEMENT PROCESS:

Phase I

A cross-functional project team headed by a Laundry “Champion” was chartered

from the areas of Laundry Management, Supply Chain Operations, and Strategic

Improvement. The team was to identify and implement a “best practice” solution for our

laundry and linen management group. Once implemented, this solution needed to

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enable us to drive out supply and labor costs, improve customer satisfaction, and

sustain these achievements on an on-going basis.

With the above goals in mind, our project team identified the following essential

features required to make our laundry processing facility world class:

Knowledgeable and trained laundry personnel

Comprehensive laundry management support

Ease of “usability” for laundry personnel

Ability to build on early successes and communicate the successes

Establishment of a culture of continuous improvement

Project Team Composition

In an effort to gain buy-in and ensure all areas of the laundry process were

represented, we assigned stakeholders (Laundry Management, Supply Chain Experts,

Strategic Improvement and Nursing) key roles on the project team. They were involved

on a daily basis in re-engineering our laundry processes. In addition to the daily

resolution of laundry issues, the team conducted bi-weekly meetings with constituents

to discuss the progress of the project and recommend process changes.

Key team participants and their duties are listed below.

The Vice President Supply Chain and Chief Purchasing Officer was the

overall sponsor of the project team. Her duties were to provide project

guidance, expertise and communication with our HDS senior management.

The Director Material Management was involved because of his overall

accountability for the laundry and linen distribution function. He also has

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expertise in procurement, logistics and operations. The Director’s charter

was to keep the project on schedule, drive improvement, work out bugs and

problems, drive internal change management and provide supply chain

expertise.

The Director Strategic Improvement participated due to his expertise in lean

processes, Six Sigma and production expertise. He has worked in several

production plants and is a Six Sigma Black Belt. Our black belt kept us

focused on the “principle of lean” (see Exhibit A).

The Director Capital Acquisition was involved he is responsible for

procurement of all equipment and capital assets. He provided expertise and

guidance on warranties, equipment quotes and contractor relationships.

The Laundry General Manager was a key participant on the team due to his

depth of knowledge of the existing laundry and laundry flow process. The

General Manager also has two extensive industry expertise and certifications.

The Laundry Management Team Leaders were involved due to their depth of

knowledge of the existing laundry and laundry flow process. The team leaders

also have linen and laundry industry certifications.

A Strategic Improvement Fellow was involved due to her expertise in lean

processes, Six Sigma and production expertise. She also had prior laundry

production experience.

The hospital based Linen Distribution management team was involved due to

their hospital linen distribution expertise. They were the key communication

connection with nursing on the project.

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The Laundry Maintenance Staff was involved due to their key knowledge of

the laundry equipment as well as their ability to fine-tune the equipment.

Phase II

The Project Team mapped existing processes in the areas of laundry production

(see Exhibit B), linen distribution (see Exhibit C), and linen standardization to name a

few. They then determined desired “end-state” goals based upon market benchmarking

and best practice findings. The goals included baseline metrics, and other requirements

such as features, solutions and price.

Benchmarking

Benchmarking for the project was accomplished through a variety of methods

including:

Market research from our laundry association and laundry publications (see

Exhibit D)

An industry study completed by National Association Institutional Laundry

Managers (NAILM)

Internal analyses and statistical calculations from our internal lean engineers

and Six Sigma Black Belts

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Best Practices

Key best practice findings from Association Laundry Managers (ALM) were used to

evaluate the project’s progress and results. Examples of some of these best practices

are:

National average healthcare costs for laundry processing is between .28

cents to .34cents per pound

National average healthcare costs for replacement linen is between .10

cents and .13 cents per pound

National average healthcare costs for linen transportation is between .04

cents and .06 cents per pound

Linen Health Delivery Systems have an average fill rate exceeding 99%

Evaluation Process

The team used the following process to evaluate and implement suggested laundry

improvements:

Define our customer requirements

Document the value stream

Select Improvement tools

Develop action plans

Transition action plans to operations

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Phase III

The project team met bi-weekly to identify specific needs and issues at the laundry

facility and at each individual hospital in our HDS. They recommended process

changes based upon their ability to achieve our desired end-state goals. Once

accepted, all recommended changes were tested, and then institutionalized after

meeting our matrix criteria. Examples of some of the process changes we implemented

are outlined below:

We merged a three shift, seven day a week laundry operation into a one shift

seven day operation which resulted in reduction of seven full time equivalent

positions.

Cameras were added which helps us document inaccurate laundry picks,

machine failures and unauthorized access.

We developed cart audits to ensure accurate picks.

We added special signage and visual cues identifying specific laundry processing

areas, thus improving speed and accuracy.

Work procedures for new equipment were documented and communicated to

operators in an effort to ensure safety and productivity.

The “5-S” system was implemented to keep the laundry warehouses clean and

organized (sort, set in order, shine, standardize and sustain).

We employed a “reduce touches” philosophy which reviews unnecessary

handling and other unproductive activities.

Heating and ventilation was improved which added to employee satisfaction.

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A timer was added to our boiler which allowed us to have the equipment ready

for operations when employees arrived for work.

We implemented an automated preventive maintenance process and software to

ensure equipment uptime.

Phase IV

Matrix tracking was utilized during testing and implementation of each change to

ensure continuous improvement during and after its completion (see Exhibit E). During

implementation, the team tracked and compared our “before” reports to “after” reports

(see Exhibit F). As issues were identified and resolved, we used the information

learned to re-engineer our laundry processes as needed. Post implementation, we

continue to use the same process and report to track our cost savings and laundry

process efficiencies.

Information Technology (IT)

IT was used throughout the laundry project to establish benchmarks, track changes,

and ensure quality (just to name a few uses). Some examples of how we used IT are:

We utilized reporting tools from the laundry management software together with

internal data to compare cart pars with actual usage (see Exhibit G). This

enabled us to revise carts pars without compromising customer service.

Matrix tracking reports were created to support the process improvement prior to

and following implementation. This allowed us to track cost per pound and labor

improvements.

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We developed linen and laundry websites to enhance end-user customer

satisfaction. The sites include lists of all stock items, hours of operation, key

contacts, item descriptions and linen saving ideas.

RESULTS:

Impact

Our process reengineering initiative has had a wide-ranging financial and quality

impact on our organization. Some of the changes are set forth here, and summarized in

Exhibit F.

We reengineered the soiled laundry sorting station which resulted in the

reduction of a 1/2 of a labor equivalent. This allowed us to redeploy the person to

another critical area saving $12,480 labor dollars annually.

The tunnel washer conveyor was redesigned, which resulted in the reduction of

1.5 FTE’s of a labor equivalent. This change allowed us to redeploy the labor to

another critical area, saving $37,440 labor dollars annually.

We redesigned the dryer alarm system and reconfigured the dryer gas pressure.

This increased dryer production from 1,875 to 2,400 pounds a day.

A strobe light alarm was added to the tunnel washer which notifies us of a

pending problem that could shut down the tunnel washer. This change increased

production by 2.2 %.

We reevaluated and amended our logistics and delivery strategy. Changes made

resulted in the redeployment of truck driver hours to other needed areas. The

impact was $11,995 in labor savings and $2,389 annual fuel savings.

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Our washcloth folding procedures were revised, resulting in redeployment of 40

hours per week to other needed areas. This is a $24,960 improvement in labor

efficiency. We accomplished this with a simple idea of adding plastic totes to the

hospital linen carts and filling the totes with bulk washcloths.

We revised our scrub folding procedure which resulted in redeployment of 14

labor hours per week to other areas. This is an $8,736 improvement in labor

efficiency. We accomplished this by changing the scrub production area to a

cellular layout.

We reduced our sheet drying time from nine minutes per load to four minutes per

load which increase our daily sheet load by ten loads per day.

A continuous laundry par analysis was instituted on all nursing par carts. This

allowed us to reduce linen inventory levels without reducing service levels.

Magnitude

We calculated the overall magnitude of the project on our organization to date.

Some key statistics are:

Reduction of 29 full time equivalent employees from the laundry startup high

mark

Redistribution of $105,179 in labor costs to other needed areas

52% reduction in our cost per pound from the start up high

Increased focus on laundry compliance, standardization and utilization

Supply chain optimization including logistics, laundry management and

forecasting

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Reduction in rework related to processing errors by following lean philosophy

(see Exhibit A)

Over 15.1% cost advantage over laundries in our geographic area

16.1% increase in volume in one year

Sustainable Processes

We require our laundry management team to utilize key laundry reports daily and

monthly in order to resolve issues and look for opportunities to improve productivity (see

Exhibit G). We review flow patterns in order to reduce linen touches and remove links in

the supply chain.

Measurement and Reporting

Exhibit H is one example of our linen and laundry report. These reports are used to

track hospital linen demand by area, then analyze linen turns and fill rate for

improvement opportunities. We also utilize our linen and laundry management software

to provide key metrics and statistics to nursing units.

INNOVATION:

Our team developed several new and innovative approaches to accomplishing our goal:

We formulated a “team effort” approach to drive laundry optimization. This effort

consisted of laundry cross functional teams which drove synergy and expertise.

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We developed linen and laundry websites which includes a list of all stock

laundry items, hours of operation, key contacts and linen awareness. The

website has allowed clinician’s quick reference to item descriptions, cost, and

linen saving ideas.

Deployed the DMAIC method of define, measure, analyze, improve, control and

monitor. This allowed us define our customer requirements, document the value

stream, select Improvement tools, develop action plans and transition action

plans to operations.

SHARING OUR KNOWLEDGE

Our organization has been proactive in sharing our knowledge and laundry

experiences both internally and externally.

Internally

Our group communicates through our department newsletter called “The Laundro

Chat”. We also communicated our progress and successes through our monthly staff

meetings, on our department websites and at hospital management forum meetings.

Finally, we communicated our success through a presentation to senior management.

Externally

Team members have also shared our laundry reengineering experiences outside

our organization through presentations at trade associations and through industry

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publications (including articles in the National Association Institutional Laundry

Managers (NAILM) local newsletter and the American Laundry News.

LESSONS LEARNED

By deploying lean methodology, principles and practices, an organization can

dramatically boost efficiency and performance. A team approach and assignment of a

team leader to keep the project on track are keys to success.

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SUPPORTING DOCUMENTATION: Attached, Exhibits A through H

Exhibit A: Principles of Lean From their 1996 book Lean Thinking, James P. Womack and Daniel T. Jones defined a set of five basic principles that characterize a lean enterprise:

1. Specify value from the standpoint of the end customer by product family.

2. Identify all the steps in the value stream for each product family, eliminating every step and every action and every practice that does not create value.

3. Make the remaining value-creating steps occur in a tight and integrated sequence so the product will flow smoothly toward the customer.

4. As flow is introduced, let customers pull value from the next upstream activity.

5. As these steps lead to greater transparency, enabling managers and teams to eliminate further waste, pursue perfection through continuous improvement.

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Exhibit B: Flow of laundry production

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Exhibit C: Hospital Linen Distribution Mapping and Flow

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Exhibit D: Example of market data Hospital Annual Linen Inventory Replacement % USA Market

Item

USA Market USA Benchmark

Range

Average Mean Low High

Total Annual Replacement % 81.1% 77.1% 51.0% 110.1%

Blanket 97.1% 84.2%

47.1%

146.1%

Towel 134.0% 125.0% 59%

210%

Fitted Sheet 68.9% 65.3%

37.1% 99.5%

Flat Sheet 72.1 54.7

39.1%

118.2%

Gown 79.1% 62.1%

33.2%

125.1%

Pillowcase 67.1% 63.2%

33.2%

106.1%

Thermal 72.1% 57.1%

30.1%

115.1%

Underpad 92.1% 88.1% 51

133%

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Exhibit E: Example of Matrix Reporting

1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun

Hours

Avg daily labor hours soiled transport time 85.1 84.3 81.2 79 76 74.2

Avg daily labor hours soiled sort 41.2 40.1 39.2 37.6 37.4 36.5

Avg daily labor hours soiled conveyer time 152.1 144.3 141.2 139.5 135.4 129.5

Avg daily labor hours tunnel washer 99.3 88.2 85.2 84.3 79.6 77.6

Avg daily labor hours dry time 121.2 119.6 118.2 117.5 115.4 112

Avg daily labor hours washcloth folding time 7.5 7.5 7.5 0 0 0

Avg daily labor hours scrub folding time 10 9.5 9.25 9 8 8

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Exhibit F: Before and After Tracking Results:

Description Before After Result

Soiled laundry sorting station

5 FTE 4.5 FTE .5 FTE or $12,480 redeployment of labor

Tunnel washer conveyor

1.5 FTE 0 FTE 1.5 FTE or $37,440 redeployment of labor

Dryer alarm system

1875 pounds per hour

2400 pounds per hour

575 pound increase or 30.6% improvement

Tunnel washer strobe light alarm

8 hours 10.2 hours 30% improvement

Logistics and delivery strategy - fuel

$26,759

$24,369

$2389 Fuel Savings Improvement

Logistics and delivery strategy - labor

$85,680

$73,384

$11,995 labor savings redeployment

Washcloth folding 7.5 hours 0 $24,960 improvement in labor efficiency

scrub folding 10 hours 8 hours $8736 improvement in labor efficiency.

Nursing inventory carts

Limited inventory par

analysis

Quarterly review of 212 cart profile for inventory

optimization

212% increase

sheet drying 9 minutes per load

4 minutes per load

80% increase

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Exhibit G: Cart Analysis Report

Stock # Description Daily PAR

Daily Rec. PAR

PAR Variation

Issue Qty.

Average Daily Qty

Qty Value

Qty Weight

Average Daily Weight

100 SHEET FITTED 35 20.0 15.0 516 16.645 192.53 412.800 13.316

101 SHEET FLAT 40 28.9 11.1 746 24.065 347.9 746.00 24.065

102 SHEET DRAW 10 6.2 3.8 161 5.194 46.63 99.981 3.225

103 PILLOW CASE 60 28.7 31.3 742 23.935 69.21 148.400 4.787

106 WASHCLOTH 150 117.9 32.1 3047 98.290 85.27 182.820 5.897

107 TOWEL BATH 65 81.8 -16.8 2114 68.194 443.69 951.300 30.687

108 BLANKET BATH 40 29.7 10.3 767 24.742 554.48 1188.850 38.350

109 BLANKET THERMAL

9 7.5 1.5 194 6.258 280.49 601.400 19.400

121 GOWN PATIENT 10 3.8 6.2 99 3.194 25.86 55.440 1.788

122 GOWN IV TELE

LG 40 25.6 14.4 662 21.355 219.22 470.020 15.162

Department Totals 474 360.7 113.3 9322 300.711 2321.5 4977.571 160.566

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Exhibit H: Example of linen Analysis Report

Par cart analysis daily usage minus daily par

Daily Par

6 month usage

1 month usage

Daily usage

Daily Par - Daily Usage

Blanket 30 4500 750 25 5

Towel 30 4701 784 26 4

Fitted Sheet 25 4235 706 23 2

Flat Sheet 25 4106 684 23 2

Gown 25 3905 651 21 4

Pillowcase 30 3826 638 21 9

Thermal 25 2589 432 14 11

Underpad 15 1996 333 11 4

Washcloth 40 5232 872 29 11

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REFERENCES

Womack, James P. and Jones, Daniel T. 1996 (Simon and Schuster)

authors “Lean Thinking” book Exhibit A

The Association for Linen Management is formerly NAILM, National Association

Institutional Laundry Managers. 2161 Lexington Road, Suite 2 Richmond, Kentucky

40475. The Association for Linen Management (ALM) was founded in 1939 by

Heywood Wiley to provide a network for the flow of information among its members

leading toward their professional development and the advancement of the technologies

they employ.

Website www.almnet.org exhibit d