HGlobal eyeing the Indian Market

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Whether you are a hotel or hospital, linen management is one of the most daunting and time-consuming tasks. If you do not have enough expertise in linen procurement and quality, your linen supplier may take you for a ride. Your outsourced laundry service could be a nightmare in maintaining your linen wash quality, delivering ontime or losing your valuable linens without any accountability. Chances are, your in-house laundry service is costing your property more than you realize. You may have a general idea of what it all takes but not the full picture.

Mohan K, Director, HGlobal USA, shares his knowledge with Clean India Journal on why linen rental makes sense for hotels and hospitals in India now than ever before. And also, how a Singapore based global linen management company is targeting India as their high potential growth market.

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Today, In India, the bed linens, towels, blankets and duvet cover that are used in hotels and hospitals are managed primarily in two ways: OPLs (On-Premise Laundries) and Outsourced laundry service of customer-owned goods (COG).

Problems in linen purchasing

Quality

Most of the linen distributors have no idea of quality. They try to find rejects, stock lots and overruns from any factory on an opportunistic basis. There is no transparency on the manufacturer or their process. Lack of quality management systems, preventive and corrective action plans, delay response to any quality concerns and lack of resolution in case of any issues are of some of the significant challenges that the customers face today. Most of the times, the hotels or hospitals have no idea how long their linen lasts and is it a reasonable lifetime. It’s challenging to determine the cost of poor quality.

Consistency

Since most of the distributors are buying what is available from the mills, there is no guarantee that you get the same kind of products all the time. The whiteness, hand-feel, design, weight or thread count would vary from shipment to shipment unless it is manufactured to strict performance specs.

Delivery

The hotels or hospitals are at the mercy of distributors on when the delivery of their order happens. Especially smaller customers who may not have the same leverage as big ones may not get the priority or attention that they deserve.

Investment

The data shows that hotels and hospitals spend almost one-third of their budget on linen. Poor quality, lack of timely delivery from laundries, variable occupancy rates missing items could lead to buying more than adequate PAR (Per Available Room) level of inventory.

Linen Management after the purchase

On-Premise Laundry

Benefits

1. Inventory Control- The linen stays within the facility. So, there are fewer chances of losing the asset and may provide better visibility on what is available in hand
2. Delivery: OPL provides better ability to service and flexibility when there is an emergency for delivery

Challenges

1. Procurement – Linen procurement comes with risks of supply, cost variation, and quality
2. Space and Real Estate – Most of the hotels lack space. In big cities, they could be located in prime areas with the highest cost per square foot. They are better off utilizing the space for some other purposes like a lounge or extra rooms
3. Typically the laundry capacity and resources are planned for a 100% occupancy, and this leads to an underutilization of resources when consistently occupancy is lower.
4. Investment on inventory for linen procurement could be expensive and the funds can be better utilized in other areas
5. It is costly to maintain and upkeep the laundry machines for better efficiency. The older the machine gets, the lesser the efficiency hence higher the cost

Customer Owned Goods

Benefits

1. There is no overhead of operating a laundry. Less staffing, fewer hassles and better utilization of space
2. May work out cheaper than On-Premise Laundry due to real estate costs, opportunity costs and resource costs like buying water for hotel operations

Challenges

1. Investment on inventory for linen procurement could be even more expensive and the funds can be better utilized in other areas
2. The outsourced laundry costs are very high
3. Linen loss and linen life are always a mystery
4. Lack of availability of right infrastructure, service levels, lack of quality mindset in this traditional industry in many markets
5. Low efficiency at laundry due to the sorting of various linen from various hotels

Why renting Linen is the Solution

Linen Rental Programs typically have minimal upfront costs for the customer. For example, companies like HGlobal, not only provide an RFID (Radio Frequency Identification) based IoT (Internet of Things) technology platform to all the stakeholders like manufacturers, laundries and hotels or hospitals to transact but also help execute the entire process right. They alleviate your pain in capital investment of linen procurement, laundry infrastructure or managing outsourced laundries that do not meet their commitments. They take your quality and financial risk out of the equation so you can focus on running your business. They help you maneuver your occupancy rate variance providing visibility to linen cost per occupied room so you can manage your finances better.

Environmental Impact

Linen Management also has other environmental implications like the consumption of valuable resources like water and energy. Today there are sophisticated washers that can handle up to 5,000 pounds of laundry per hour using four times less water than a conventional machine. Particularly tunnel washer technology can process linens using less water, energy, and workforce than smaller OPL machines. New commercial dryers have built-in sensors to prevent over-drying that can waste energy and damage fibers.

Besides, internal water recycling systems can be installed so water can be reused again. Usage of nontoxic detergents by professional chemical companies like Ecolab and P&G that are 100% biodegradable and don’t release harmful chemicals into the air or water, can help reduce the impact to the environment. Also, precision detergent pumps can reduce waste and prevent buildup.

In the last 20 years, more and more hotels are shutting down their on-property laundry (OPL) operations and bringing on a partner to take over, saving time, money, resources and space by moving to a COG or rental model.

The cost is always a significant consideration. For many companies, what works best is a choice of either buying or renting, or in some instances, a combination of both.