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Laundry Operating Costs

Reducing Laundry Costs

While laundry costs represent a small percentage of the total hospital running costs, the amount in real terms is considerable. Estimates for running laundries for the former Transvaal and Cape Provincial Administrations alone for 1993/1994 was just under 66million. This excluded all capital expenditure. Likewise laundry costs for a hotel are considerable and a quality product is of prime importance.

What does it cost to launder an article or one kilogram of linen and how are the costs made up? How can costs be reduced without affecting quality? An attempt is made to address these questions in this section.

The former Transvaal Provincial Administration (TPA) undertook an extensive survey of the 21 laundries under their jurisdiction during 1992. This exercise was undertaken to rationalise the whole system and reduce costs.

Of the 21 laundries, four use continuous batch machines with 14 machines in use. The other laundries use washer-extractors and side loaders. The most economic laundry was the Ernest Bond Laundry attached to the Baragwanath Hospital where excess of 1 200 000 articles are processed per month and five continuous batch machines are used. Table 10 indicates the weighed average costs and percentages for the 21 laundries plus the Earnest Bond figures. A breakdown of percentage costs for laundering in Europe in 1992 is set out in Table 11.

It is not possible to make conclusive comparisons between the Transvaal and European cost percentages except to mention a few items where the differences are considerable. See figure 12, a histogram of the percentage of various cost factors in laundries in the Transvaal and Europe for 1992.

Labour costs

The TPA's average percentage labour cost is 56.06%, whereas that in Europe is 31.8%. It is fairly well established that productivity is low in many industries in the RSA and even in laundries with continuous batch washers, the labour costs are high. Indeed in some smaller laundries using less efficient types of machines, the labour costs are less per article laundered.

This, inter alia, emphasises the need for training and management in the industry. It was stated in the TPA investigation that salaries paid to managerial staff in their laundries was too low. This may well have been the case in 1992 but any increase in salary must be accompanied by an increase in skills and productivity.

Textile costs and control

This represents a major cost item of 22% in Europe. The TPA charges the hospitals a levy of 75c per article laundered. This levy includes 4c for replacement which represents 5.3% of the total. Presumably the European percentage includes the initial capital outlay together with replacement costs. These costs highlight the need for efficient laundering to extend the life of the linen and for effective control of linen.

Energy and water costs

The energy costs at TPA laundries are 13.01% of total costs - this includes water. The European percentage includes effluent as well. The European percentage is 6,7% of the total - considerably lower than the TPA's 13,1%. Most laundries in the RSA are not energy efficient in terms of the use of steam, electricity or water. Most of the washers do not use a water recycling system. Water recycling in a country like South Africa should be mandatory for laundries, as water is one of our scarcest resources. Laundries which use steam are best attached to hospitals where the same steam generating plant can be used for sterilizes, heating and the provision of hot water. This is well illustrated at the Ernest Bond Laundry which is attached to Baragwanath as they use a common steam generating plant. The cost of energy at Ernest Bond is 11.17 % of the total cost, considerably lower than the majority of the 21 TPA laundries.

Tumble dryers use considerable energy and add-on equipment is available for the recovery of heat. One bolt-on application to free-standing tumble dryers takes the exhaust air from the dryer, passes it through a filter bag and channels the hot air into the dryer before the heater battery (FCRA Digest Issue No 439, Dec 1986).

Table 10 Weighted cost per article (April 1992) at 21 TPA laundries together with the Ernest Bond laundry costs.

WEIGHTED AVERAGE FOR 21 TPA LAUNDRIES

(April 1992)

ERNEST BOND LAUNDRY

(April 1992)

ITEM

Cents per article

%

Cents per article

%

Salaries

38.12

56.06

24.14

50.8

Maintenance

3.53

5.19

1.85

3.89

Energy (incl. Water)

8.85

13.01

5.31

11.17

Diverse

3.21

4.72

4.38

9.22

Transport

1.72

2.53

0.43

0.9

Equipment & Buildings

6.52

9.59

4.36

9.18

Cost of Capital

6.05

8.90

7.05

14.84

Total

68.00

100

47.52

100

Table 11 Percentages of laundry cost in Europe 1992

ITEM

%

Direct wages & management

28.8

Indirect wages

3.0

Textiles

22.0

Water and effluent

2.0

Energy

4.7

Depreciation

8.3

Admin and interest

11.2

Clothing

0.9

Transport

6.5

Sales

1.1

Maintenance

4.7

Chemicals

3.7

Diverse

3.1

Total

100.0

Figure 12 Histogram showing percentages of laundry costs for provincial laundries in the former Transvaal province and European laundries 1992

The steam usage can either be calculated from the equipment manufacturer's steam usage levels related to the hours that the equipment is supplied with steam or the FCRA target steam consumption figures can be employed at the rate of:

4,275 kilograms of steam per kilogram of linen processed, based on normal finishing equipment with conventional washing machinery (washer-extractors) and heat recovery units; or
  1. 3,775 kilograms of steam per kilogram of linen processed, based on normal finishing equipment with a counter flow CBW machine and heat recovery units.

It should be noted that these FCRA figures are TARGET figures and it is likely that actual steam consumption will be higher.

If electricity is used the FCRA target consumption figure of 33,5Kwhs per 100 kilograms of linen processed can be used.

Laundries use considerable amounts of water. For example a CBW machine discharges in the region of 85m³ of effluent per day. Other machines discharge considerably more for the same amount of linen laundered. The recovery of water from first and second rinse water is common practice for tunnel washers. In the larger laundries where a  number of separate washers are used, it is advisable to integrate water saving as a separate total engineering system. As an example of the need for this approach, in one laundry where overalls contaminated with lead are washed, the water from the washers has to be fed into a separate lead settling tank before re-use. Water saving devices that do not impair the washing process should be used wherever possible.

There are usually three elements that make up the cost of water:

  • Cost of water "in" to the laundry
  • Costs to"soften" the water
  • Cost of effluent (to dispose of the water down the drain)

South Africa has hard water in most inland areas (up to 330 ppm CaCO¸) which needs to be softened. In most cases where water softening occurs, a base exchange water softener is employed that requires the use of Sodium Chloride to regenerate the resin in the softener. Thus the costs of Sodium Chloride for softening purposes and the equipment must be taken into account.

In recent years effluent charges have been introduced to South Africa, and depending upon the local municipality, these charges will vary considerably. The charge is normally based on the application of the Mogden formula to samples taken from the main sewer outlet from the laundry. The costs are based on a combination of:

  • the biological oxygen demand (BOD)
  • chemical oxygen demand (COD)
  • temperature
  • pH of the effluent
  • total dissolved solids (TDS)
  • volume

There are a number of ways that a laundry can reduce this charge via the prudent use of chemical treatment and settling/flocculating tanks. However, the volume of water charged for effluent purposes is normally based upon a calculated cost per kilolitre (cubic metre of 1000 litres) of the total volume of water metered into the laundry, less a percentage for evaporation.

For those laundries located within the area of a hospital, based upon the local municipality, recent legislation has been adopted whereby the hospital is NOT charges per kilolitre of water but rather on a "flat rate" based on the number of patient bed days the hospital achieves. The current charges levied in Johannesburg are R26.00 per 10 patients per month. This cost is exceptionally low.

An important project on saving energy and water in the UK in the eighties was the Low Energy Laundry constructed at Swindon. The plant processes an average of 45000kg of work per week through two continuous batch machines and seven washer extractors. The most important benefit of the energy saving equipment was a steam consumption 24% lower than "normal". A report and in-depth description and evaluation of the system is available from the FCRA Research and Consultant Group.

Transport costs

While the TPA's average transport cost appear to be low - 1.72 c or 2.53 % per article, at one laundry the equivalent cost is 7.04c or 9.07% of the total. At the Ernest Bond laundry the transport costs are small as the laundry is on site at the Baragwanath Hospital. The average European percentage cost is 6,5% which is a major item. Transport costs require careful assessment.  These costs are on the increase with regular fuel cost increases and vehicle replacement costs being extremely high. This fact together with that of  control and management may contribute toward making the on-site laundry a more popular choice than an off-site laundry for some institutions.

Textiles

The choice and handling of textiles can have a considerable influence on the total laundering cost. As stated previously, cotton textiles are generally used in hospitals and other related organisations. Poly-cotton are commonly used for sheets and pillow cases in hotels. Most textiles in these industries are expected to last 24 months (150 - 200 washes) based on correct stock holding levels. However incorrect laundry practices, eg: over bleaching, over washing and extended tumble drying times, can reduce the expected fabric life of 24 months by 20%.

The quality of the fabric purchased will also influence the fabric life. Harris relates an instance in the textile rental industry where poly-viscose blended fabrics and poly-cotton fabrics were compared with similar conventional laundering. The poly-viscose fabrics were unusable after 15-18 months of normal wear whereas the poly-cotton fabrics were serviceable after 3yrs. The poly-cotton fabrics cost  20% more than poly-viscose, but the total cost saving on the textile budget of the poly-cottons was 80%.

Commercialisation

Commercial organisations vary in their quotations. Costs of 58 cents and 60 cents per article (mid 1994) were quoted by one commercial laundry for a hospital laundry service to a public sector hospital in 1992. From our investigations it appears that some commercial firms are providing quotations that are too low which does not allow them to provide a quality service and product. While we encourage privatisation and competition, the cost per article must be weighted against the quality and convenience of the service.


This information courtesy of Division of Building Technology, CSIR.

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