Textile Processing Cost Benchmarks

In the laundry processing business, many facilities fail because they cannot manage to meet simple processing cost benchmarks. Others have difficulties making decisions or justifying upgrades because they do not understand these benchmarks. Up until recently, little effort had been put into consolidating the necessary data into understandable terms that facility managers and executives will be able to put into practice. Fortunately, there is now a comprehensive study available that aims to do just that.

Cost per Pound (Processed and Delivered)
The study, compiled by American Laundry News, forecasts that laundries will reach an average per pound cost of $1.10 in 2013. However, that number is not reflected in the study as data was only available through 2011. The cost per pound (processed and delivered) for the study ranged from $0.78 to $1.05.

Processing and Production Benchmarks
Within that $0.78 to $1.05 per pound cost are several different aspects that must be accounted for, including processing and production. For an efficient facility, the study determined that these costs should be between 48 and 69 cents per pound. Here is how those benchmarks break down ideally:

Processing cost: this is the direct cost of labor and the benefits associated with hiring and maintaining labor (e.g. health insurance, retirement pensions, etc). This should be between 18-23 cents per pound processed.

Administrative costs: the costs of non-production employees and management. This should be around 3-5 cents per processed pound and delivered.

Maintenance and repairs: the costs associated with labor and materials needed for routine maintenance. This should be around 7-11 cents per lb. processed and delivered.

Equipment depreciation: obtain this by dividing the equipment's value over its lifetime (for the study, this was 15 years). This should be around 4-6 cents per pound processed.

Property depreciation and property taxes: 3-5 cents per lb. processed and delivered.

General supplies: 2-4 cents per pound processed.

Chemical supplies: 3-5 cents per pound processed.

Utilities: 8-10 cents per pound processed.

Distribution and Replacement Benchmarks
In addition to your processing and production costs, you will need to take into account the cost of distribution and replacement of textiles. The study determined that this should be roughly 30 to 36 cents per pound processed and delivered. This breaks down into two categories. Distribution and return cost, which includes drivers, fees, tolls, fuel, vehicle maintenance and repair, labor, and so forth, should cost between 13 and 15 cents per pound processed. Textile replacement cost was between 17 and 21 cents per pound.

These benchmarks were set as ideals to be reached when your facility is operating at its best. To make the most of your laundry processing business, break down your costs per processed pound and delivered, and determine where you are unacceptably outside of these benchmarks, then cut back.

Sustainable Best Practice Standards

There is a big development currently in the works in the laundry service industry. ASTM (International Technical Committee D13 on Textiles) is in the process of developing a new international standard concerning laundry cleaning best management practices. If successful, the standard will in effect identify and define clear practices with which businesses in the field should be aiming to meet regarding their environmental impact. The goal is to increase energy efficiency and reduce consumption in all respects. Thus, the new development can be seen as a comprehensive effort to target wasteful practices worldwide and eliminate them in due time.

The Environmental Impact of the Laundry Industry

The laundry service industry (i.e. medical linen and hospital laundry service organizations) has a major environmental footprint. These companies use billions of gallons of water each year as well as tons of detergent as they process a vast number of linens in their facilities each and every day.

That being said, ASTM is committed to an overhaul of the ways in which businesses are currently operating. They hope that their new eco-friendly standards will lead to a significant reduction in water usage and promote long-term sustainability of the industry at large. As it currently stands, the newly proposed international standards have a good chance of passing. Once this has happened, commercial laundry facilities will be assessed and subsequently evaluated on a performance scale to determine whether they meet the mark.

A List of ASTM's Best Practice Standards

ASTM is serious about its efforts, and this is demonstrated by the extensive list of areas which are to be included in the proposed international best practice standards. They are all geared toward promoting eco-friendly operations. This includes the implementation of water reuse technology, boiler heat recovery, wastewater heat recovery, using eco-friendly low temperature detergents, as well as installing energy-efficient lighting in facilities and having an energy audit performed to provide a thorough assessment of a company's current performance. ASTM is also pushing for the promotion of alternative energy forms, namely the use of solar energy systems to reduce consumption.

If successful, the international best practice standards will be a monumental step in the laundry industry. It will likely take some time for the certification process to go into effect, but we will probably start seeing many businesses making the move to using eco-friendly technologies as a means of preparing themselves for review. ASTM encourages owners of these facilities to support WK35985.