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Management
Practices
Bridges to Operational Management
ONE KNOLLCREST DRIVE CINCINNATI, OHIO 45237 (513) 761-9255 (513) 761-0467 FAX
http://www.standardtextile.com
Linen Management Practices - Bridges to Operational Management Copyright 1998, Standard Textile Co.,
Inc. All rights reserved. No part of this book may be reproduced in any manner whatsoever without written
permission, except in the case of brief quotations embodied in critical articles and reviews.
Printed in the U.S.A.
Published by Standard Textile Co., Inc., One Knollcrest Drive, Cincinnati, Ohio 45237
Phone: (513) 761-9255, Fax: (513) 761-0467
ControlTex is a registered trademark of Standard Textile Co., Inc.
Tex Tyler is a trademark of Standard Textile Co., Inc.
TEXknowlogySM is a service mark of Standard Textile Co., Inc.
Library of Congress Catalog Card Number: 98-60557
Second Edition, November 2004
First Printing, October 1998
Composed in AGaramond and ITC Officina Serif, Adobe Systems Incorporated.
Edited by Judy Kehoe, Frank Kerley, and Jim Gilbert.
Cover design and publication design by Amy M. Clark.
Cover photography by Rick Dieringer Photography.
ISBN 0-9663708-1-3
Contents
Forward .................................................................................x
Introduction..........................................................................xi
A Multi-Billion Dollar Industry ...................................................................................xi
A Unique Commodity ...............................................................................................xii
Supplier Relationships.................................................................................................xii
Table of Contents
Chapter ThreeConsumption.................................................23
Utilization Measurements ...........................................................................................24
Tex Tip: Sharing Costs with Consumers.........................................................................24
Calculating Utilization................................................................................................25
Clinical Practices for Consumption.............................................................................26
Financial Responsibility ..............................................................................................26
Sample Policies ...........................................................................................................27
Sample Calculations....................................................................................................30
Departmental Linen Utilization Costs................................................................................... 30
Par Level Stocking Levels....................................................................................................... 31
Chapter FourRetrieval.........................................................35
Retrieval Guidelines ....................................................................................................35
Measurements.............................................................................................................35
Tex Tip: Soil Factors ....................................................................................................36
Retrieval and Procurement ..........................................................................................36
Soil Factors .................................................................................................................36
Sample Calculation .....................................................................................................38
Soiled vs. Clean Weight......................................................................................................... 38
vii
Index ...................................................................................87
viii
Forward
Standard Textile has always focused on working with our clients to reduce total delivered cost over
a healthcare textile products useful life. To accomplish this we have committed to 3 basic business
philosophies:
1. Develop professionals with the appropriate level of expertise to assist our clients.
2. Develop products that will maximize the efforts of our partnership.
3. Invest in technological tools to make it easier for all the participants in the value chain to achieve
positive results.
Our focus has made possible this book of knowledge. This first edition is a compilation of key success
factors and business practices to help linen management professionals at all levels become more effective
at their job. We recognize this to be a continuous work in process. As we collect data of improved business
practices from the field, the hardcopy of this book will be reprinted. Between printings we will continue
to lead the industry by featuring the most up-to-date edition electronically through our TEXknowlogySM
On-line Information Service website.
Our clients have made countless contributions to this volume, either in the form of ideas, evaluation or
direction. Healthcare textile management is a field enriched by the experiences and learning of others and
we have attempted to bring that knowledge to your desktop.
The book is divided into nine chapters and follows the linen products through the recirculating linen
trail. Throughout you will find we have used a few basic conventions to demonstrate the concepts we
are reviewing. Tex tips are presented by Standard Textile Co., Inc.s virtual assistant Tex Tyler. Tex
is an animated character that functions in all of our software applications to help guide the way. The
tips he presents in the written format are designed to call out special points of emphasis for an industry
newcomer. The other tools we have used to convey more advanced concepts include charts, tables and
example policies. These have all been created for illustration purposes and have often been provide by
other clients. Because every situation is unique, please carefully review and evaluate any material in light of
your local requirements before implementing.
It is our sincere hope that this book, its corresponding website support and the examples within expand
our ability to help you achieve the desired results within your linen system. This tool is designed to further
advance the commitment Standard Textile Co., Inc., has made to its clients through maximizing the
effectiveness of our professionals, products and technology.
To our clients who have contributed to this book through the learning we experienced together, thank
you. To everyone reading this book today, we look forward to creating our next edition with your
involvement.
- Standard Textile Co., Inc.
ix
Table of Contents
Introduction
A Multi-Billion Dollar Industry
As the Health Care industry copes with dramatic changes in managed care, cost reductions, and reengineering, facilities struggle to provide patients and staff with a simple commodity: linen.
Why are sheets, blankets, surgical scrubs and a host of other items so difficult to manage? Consider these
1994 statistics1:
33 million patients were admitted to hospitals
96 million patients visited Emergency Rooms
24 million patients underwent surgery
The majority of these patients require linen during their medical visit. The estimated cost of laundering
sheets, blankets, and other items necessary to support this patient volume is over $4.1 billion dollars
annually. It is estimated that another $550 million - $1.1 billion or more is required to replace linen that
was lost or worn out during the year.
In aggregate, these statistics sound impressive; however, an individual facilitys linen budget may only
account for less than 1% of the facilitys total budget. Therefore, more effort and resources may be focused
upon patient care, medical equipment and facilities expenses.
Limited financial recognition can impact all aspects of linen management including procurement,
distribution, end user consumption and other critical functions. This impact can be seen in the following
examples.
Nursing and administrative staff searching for linen when inventory stocking levels are inadequate.
Linen stored in inaccessible locations, reducing the quantity available to end users.
Scrub apparel in inappropriate sizes for doctors and other staff members.
Removal of linen and supplies by parents of each newborn infant.
Linen thrown into a trash dumpsters instead of soiled linen containers.
Destruction of new linen for maintenance activities (i.e. painting, construction).
American Hospital Association, Hospital Stat, Emerging Trends in Hospitals (1995-96 edition), as published in Health Care State
Rankings 1996,
1996 Morgan, Morgan, & Quitno, Editors, Fourth Edition.
xi
These incidents are not unusual, but can be prevented using Standard Textile Co., Inc.s proven
management practices. Over 50 years of experience with our healthcare textile customers has shown
us that linen is an asset worth protecting. Reaching that goal requires implementing basic policies that
support consumers and control linen related costs.
A Unique Commodity
Although linen is a basic commodity, it has unique qualities which make it complex to manage. Unlike
a single use item, linen is a reusable product which requires the coordination of people, materials, and
processes to maintain the asset for multiple uses. Specifically, it requires:
24 hour accessibility; inaccessibility can cause crises for staff and patients
Coordination within the supply chain (procurement, distribution, consumption and retrieval) for
every use
Timely processing by laundries to maintain inventory levels
High standards of cleanliness, requiring separation from other supplies during distribution or
retrieval.
Availability for more expensive, revenue generating services to be performed (surgery, patient care,
examinations, etc.)
In addition to controlling a circulating commodity, managers also face the challenge of less time, new
responsibilities, limited linen knowledge, and cost reductions while still providing quality patient care.
Supervisory responsibility is being delegated to managers with no previous linen experience. This can
result in less time devoted to linen management when managers are responsible for more products and
services than ever before.
Supplier Relationships
Linen management requires the coordination of suppliers, distribution staff, consumers, and management
to control costs and provide quality products. Health care facilities continue to consolidate their
operations in response to market pressures. Responsibility for negotiating goods and services has
centralized to the corporate level, resulting in fewer but much larger contracts with linen suppliers. These
relationships encourage individual facilities to work cooperatively, not competitively, with a limited
number of suppliers. There is also an increasing need to form supplier alliances where all parties share
responsibility for cost reductions, especially in a guaranteed cost and performance agreements.
The combination of a unique product in a changing environment creates the need for all participants in
the linen supply chain to create and monitor processes that result in a mutual, cost effective relationship
for all parties.
xii
Linen
Management
Practices
Bridges to Operational Management
Chapter One
The Basics
Goals
Despite the changing internal environments and new relationships with suppliers, a linen manager must
continually balance five goals to have an effective linen management program:
Description
Circulating Inventory
Because of linens recyclable nature, circulating inventory can be at one of four stages - processing,
consumption, retrieval, and distribution - at any one point in time. These quantities are actively
circulating throughout the linen cycle, as opposed to being stored in boxes, waiting to be injected into
the cycle.
Compliance
Federal, state, and local government regulations which insure quality processes are in place and
routinely followed. These regulations typically address safe and proper linen handling, employee
training, and awareness of facilitys mission, patients, and products.
Consumers (End Users)
Individuals who are the direct users (consumers) of textile products, including patients, and medical
facility staff. Consumers are the primary driver of linen processing and replacement costs, but may not
be financially responsible for their usage.
Consumption
Consumers determine how, when, and where linen is used. Consumption (utilization) patterns are
the primary driver of linen costs. If linen is thrown out, new items must be purchased. If clean linen is
placed into a soiled linen hamper, it must be re-processed. Therefore, controlling linen utilization is
one of the most beneficial, yet often neglected, methods of cost control.
Customer Owned Goods (COG)
Linen system where the facility using the linen also owns the products. Also referred to as NOG (Not
Our Goods), a term used by commercial laundries to indicate that the customer owns the product.
Customers
Entity or persons financially responsible for the payment of linen processing and purchases. These
may include retail customers of a commercial laundry, facility members of a cooperative laundry, or
consumers charged for using products.
Discards
Linen products intentionally removed from circulating inventory due to wear, stain, or other reasons
which make it unsuitable for use.
Distribution
Moving linen within a facility, typically from a linen staging area to consumer departments. An
effective linen distribution program provides the right product at the right time and in the right
quantity.
Equipment
There are two basic types of equipment: Machinery (Washers, dryers, conveyors, extractors, folders)
and Utility (laundry bags, bulk carts, and bins). This equipment will vary based on the type and
volume of linen processed.
Information Systems
Information systems serve to turn data into information and ultimately into knowledge. Utilization,
inventory, distribution, productivity and staffing data is crucial to analyzing current operations and
identifying opportunities for improvements. Determining how to manage and store linen and laundry
data is critical since volumes of information are created daily.
Inject
New linen intentionally added to circulating inventory to increase the quantity available for use.
Labor
The cost of a persons time to perform any functions necessary to make an item ready for a consumer.
It may include managerial or hourly labor as well as the cost of their benefit programs.
Linen
A generic term for reusable textile products. Linen products are:
1. Purchased by a customer (laundry or patient care facility)
2. Processed by a laundry
3. Used by Consumers
Typically, a customer purchases linen according to specifications which usually include weight, size,
fabric content, price, country of origin and intended product use.
Mixing
Term used when 2 or more distinct groups of goods are combined, often for processing. This situation
typically occurs when there are 2 separate groups of linen owned by 2 different customers.
Mysterious Disappearance
Items removed from the linen cycle via unauthorized means. These items may mysteriously disappear
via theft from staff, patients, or visitors, inappropriate disposal (throwing linen into trash receptacles),
or inaccessible inventory stashes.
Overhead
Costs other than purchases, processing, or labor that are necessary to run a business or department.
These costs include utilities, depreciation, supplies, and other expenses.
Par
A par is the quantity of a linen item used in one 24 hour period. For instance, 800 flat sheets may be 2
par if a facility uses 400 sheets per day.
Par Levels (Standards)
Par Levels are the specific quantities required for each item for a specific distribution point. For
example, 100 sheets, 120 bath towels, etc. may be the par levels (daily requirements) for a specific
distribution point.
Processing
Industry term for laundering or cleaning linen. It includes the equipment, wash formulas, and
chemicals used during the cleaning process. Linen is subjected to higher water temperatures, multiple
chemicals, and complex wash cycles to produce hygienic products that are ready to reuse. It also
includes the methods used to make clean, dry linen ready to use (folding, stacking, binding, etc.).
Procurement
New linen must be continually purchased to feed the circulating linen inventory. Replacing lost
or worn linen or the startup of a new department or facility are the two most common reasons for
purchasing new linen.
Rental
Linen system where the processor, not the using facility, owns the products.
Retrieval
Collection of soiled linen from chutes, utility rooms and other areas is a crucial element of linen
circulation. If soiled linen is not collected on a timely basis, inventory is unavailable for processing and
cannot be redistributed to users.
Stock Keeping Unit (SKU)
A Stock Keeping Unit (SKU) is a unique item which is often a combination of a type, size, and color
of a product. For instance a facility may have many scrub SKUs, with 1 SKU being a small, unisex,
jade scrub shirt.
Suppliers
Companies, other than the linen using facility, who sell products or services. This may include the
linen business partner or commercial laundry that processes linen.
Transportation
Transportation is the activity, equipment and cost necessary to transport linen from one facility to
another. Transportation costs can be significant, especially if the travel distance is extensive. It is
essential that transportation is carefully planned to balance costs and customer service. The processor,
especially if they are in a different location than their customers, must consider the service area,
customer requirements, daily linen volume and truck capacity.
Traditional Linen
Model Steps
Wash - Processing linen to make
ready for use by end users.
Use - Using linen for intended (or
unintended) purposes.
Return - Collecting soiled linen to
be processed.
The Traditional Linen Model was particularly applicable to facilities which had a onsite laundry since
all linen literally remained within the facility. Today, many facilities have contracted with commercial
laundries to process their linen. These laundries may be located 10 to 100 miles away, increasing the
potential for linen to leave the system, so the traditional model does not accurately describe how linen
circulates.
Policy Development
The Linen Flow Model shows that five primary processes must occur to keep linen circulating and
inventory supplies consistent. Each process must be defined and have a formal policy to insure that
activities occur in a timely, controlled manner.
The linen cycle is dependent upon the coordination of dozens of consumers and multiple suppliers, so
policies must address a wide variety of people and needs. Without policies in place to control linen flow
and use, additional labor, processing, and replacement costs will be incurred. Below are situations which
may occur if policies are not documented or followed.
Customer service issues arise from inadequate delivery times and inventory quantities, resulting in
poor use of managerial time.
The number of individual inventory items, or stock keeping units, expands in response to specific
user requests.
Labor costs increase when users inventory needs are unknown; multiple orders, phone calls and
deliveries are required to satisfy user requests.
New linen replacement costs increase to compensate for linen that was used improperly, stored in an
inaccessible area, or removed from circulation.
Policy Components
Policies must address specific linen using activities and focus on each of the five primary processes
shown in the Linen Flow Model
Model. Policies serve to structure these processes by providing a framework for
consistency. Each policy includes five components and must be approved by the appropriate staff members
who can continually enforce defined procedures.
1. DefinitionWhat is the goal of this policy? what actions are required for this process to be
implemented and enforced?
2. WhoWho is involved in the execution of this policy?
3. Equipment and SuppliesAre equipment or supplies required for this practice?
4. InformationWhat data is required to monitor this policy?
5. Security
SecurityAre there steps required to maintain the security of linen assets?
6. CommunicationWhere, who, and how will this policy be communicated to affected parties?
How often will the policy be reviewed?
Standard Textile Co., Inc., has helped numerous institutions establish effective policies that coordinate
linen products, users, and practices to support an effective linen management program. Each chapter
includes sample policies that can be customized to fit your facilitys linen management program.
7
Cost Elements
Replacement/PurchaseReplacement is the cost to purchase new linen that will replace old or
missing linen. Other purchase costs are incurred for start up inventory (i.e. for a newly opened
department or facility).
ProcessingThe combined cost to sort, clean, iron, and fold linen so that it is ready to distribute
to users. For customers of a commercial laundry, this is usually expressed as a cost per pound or
piece.
Utilities
UtilitiesWater, sewer, electric and other utility costs associated with processing.
OverheadThe fixed costs associated with running the department or facility. This may include
depreciation, lease costs, or rent.
LaborThe cost of hourly and managerial staff, including hourly wages, salary, and benefits.
EquipmentThere are typically two types of equipment costs - machinery (washers, dryers,
ironers, folders) and utility (storage or exchange carts). These costs may be expensed directly as
equipment or have their depreciation included in Overhead costs listed above.
Miscellaneous
MiscellaneousAdditional costs such as office supplies, association dues, etc.
These cost elements are typically used for three different types of analysis:
ProductEvaluation of a products purchase or replacement cost. The product may be linen or
equipment necessary to process or deliver linen.
SuppliersEvaluation of products and/or services offered by one or more suppliers
PoliciesEvaluation of the cost impact of a linen using policy, service or practice
Measurements
Using cost elements in an analysis allows you to turn data into information that motivates the report reader
to take action. There are a variety of measurements that can be used, but they must be meaningful to the
developer and the user of the report. The result of a study should be 1) a cost that is understood by the
user and 2) can be compared to another cost or point in time. These measurements are usually stated two
ways:
1. In TotalThe grand total cost. For instance, spending $125,000 annually for replacement linen is
a total cost.
2. Cost per Unit of Activity
ActivityThis is a popular and useful cost measurement since it shows the total
cost divided by multiple units, people, or time. Examples include:
Cost per Adjusted Patient Day: (linen processing and/or replacement cost) / (adjusted patient
days)
Cost per Discharge: (linen processing and/or replacement cost) / (discharges)
Cost per Each: (product cost) / (items per case or pack)
Cost per Pound
Pound: (linen processing and/or replacement cost) / (pounds)
Labor Cost per Activity: (labor cost per minute) X (minutes per activity)
Examples of these types of analyses are shown at the end of chapters 2 - 7.
10
Whoa!!!
Once youve gathered all those process or product related costs, you have to
tell someone what all those numbers mean. Consider the following points
prior to writing any reports.
11
Chapter Two
Distribution
Goals
An effective linen distribution program provides the right product at the right time in the right quantity, at
the right place. Balancing these four goals is a challenge for the most experienced linen manager as well as
for the novice.
To achieve these goals, there must be cooperation and communication between the department which
supplies the products and consumers. Keeping an open line of communication is increasingly important
since fluctuating patient volume and associated linen requirements can change dramatically within just a
few hours. More importantly, there needs to be a common set of practices and expectations to guide that
communication. Sample policies and measurements are included in this chapter to support these goals.
Distribution Guidelines
1. Distribution schedules must support consumers work routines and patient acuity. In todays
healthcare environment, patients have a higher acuity level than in the past. Patients typically stay
fewer days, but may need more linen during their stay. It is more important than ever that linen is
accessible 7 days a week, 24 hours per day. Therefore, deliveries need to be scheduled to support
increased patient acuity and work routines (patient baths, bed changes, etc.).
2. Each distribution location must have a defined set of products and par levels. The distribution
department must also periodically review the product selection with consumers to insure they
receive appropriate products, in the correct quantities, for their changing needs.
3. Track usage data, by product, for each location. This data will be used to monitor and measure
each locations consumption patterns and can also be used to determine linen related costs for each
consumer.
4. Identify high volume users and periodically review utilization. A relatively small number of
distribution points may account for a high percentage of a facilitys total linen utilization. These
areas should be reviewed continuously, using credible data to maintain controls and identify
opportunities for improvement.
5. Monitor locations of low volume consumers. As the number of clinics and outpatient services
grow, the number of linen stocking locations can increase dramatically. Examination rooms,
cabinets and offsite storage locations should be periodically inspected to avoid build up of noncirculating linen.
13
Item
Description
Flat Sheet
Pillowcase
Bath Blanket
Bath Towel
Lab Coat
Cost per
Each
$
$
$
$
$
5.75
1.65
4.97
1.57
8.05
Weight
per Each
$ 1.50
$ 0.25
$ 1.30
$ 0.40
$
-
Processing
Cost/Lb.
$
$
$
$
$
0.25
0.25
0.25
0.25
-
Processing
Cost/Each
$
$
$
$
$ 1.00
Item
Description
Cart #1
Standard
Cart #2
Standard
001
Flat Sheet
Pillowcase
Bath Blanket
Bath Towel
100
150
75
125
75
100
50
100
002
003
004
15
16
Departments
3. After considering consumer priorities, establish delivery routes based on departments that
are close to one another. Delivering to the 1st floor, 3rd floor, and 1st floor again can create an
unnecessary trip that results in wasted labor. After reviewing distribution points, a delivery time
schedule can be developed as shown below.
Delivery
Time
6-7 am
7-8 am
8-9 am
9-10 am
10-11 am
11-12 noon
Weekends 6 am - 2:30 pm
Shift
OR Scrubs & Linen
Inpatient Areas
Inpatient Areas
ER & Radiology Linen
Inpatient Areas
Prepare exchange cards for
next day
12-1 pm
1-2 pm
Lunch
Low Volume Clinic Deliveries
Prepare exchange cards for ER & Radiology Linen - 2nd
next day
Delivery
Lunch
Prepare exchange cards for
next day
2-3 pm
3-4 pm
4-5 pm
5-6 pm
6 pm to
6 am
Break
Inpatient Areas - 2nd Delivery
Inpatient Areas - 2nd Delivery
Inpatient Areas - 2nd Delivery
Security Dept. Access
4. Look for opportunities to consolidate delivery times, especially to low volume users. If the linen
department currently delivers five days per week to low volume clinic users, review opportunities
to consolidate deliveries to two or three days per week.
5. Examine equipment being used for linen deliveries. If utility equipment is too small or in
disrepair, the facility will incur additional labor costs to compensate for inadequate equipment.
Distribution equipment should hold enough product to properly supply consumers for their hours
of operation during a 24-hour period and reduce the potential for multiple trips between the linen
department and distribution locations. Exchange carts typically supply one distribution location
while utility carts should supply enough to restock two or more distribution locations. Elevator
availability and storage places should also be evaluated. Finally, delivery and storage equipment
must provide a cover for all clean linen to protect against cross contamination.
17
July
August
September
October
November
December
2. Review utilization with input from consumers. If utilization reports are available, review them
with responsible parties at each distribution point. Focus on items which appear to have above
average (or below average) utilization. There may be opportunities to identify clinical practice
changes which would drive linen utilization to appropriate levels.
3. Review product list with consumers and make alterations if appropriate. Based on utilization
reports and clinical practices, there may be items which would be more cost effective for
consumers to use. In addition, there may be items that consumers currently receive, but rarely use.
Both situations present opportunities for changes to the current delivery schedule.
4. Examine current par levels. After reviewing utilization history and receiving customer input, there
may be opportunities to increase or decrease the current quantity of goods delivered. Patient care
practices and changes in patient volume continually create the need for adjustments to par levels,
especially of high volume, basic items (i.e. sheets, towels, etc.).
5. Review existing delivery times. Linen deliveries should support patient care routines and staff
requirements. When timing changes affect patient or staff consumption practices, linen delivery
times may also require adjustment.
18
Average % Total
Facility Usage
(100,000 lbs)
Par Level
Review Date
Responsibility
4 West Medical
10,000
10.0%
12/5/97
Linen Mgr
4 East Surgical
8,000
8.0%
12/5/97
Linen Mgr
3 West L&D
7,500
7.5%
12/5/97
Linen Mgr
Emergency Dept
7,400
7.4%
12/8/97
Linen Mgr
Distribution
Point
19
Facility Personnel
1.
2.
3.
4.
Materials Management staff has the primary responsibility for linen preparation and delivery to inpatient and clinic
departments.
Users located in off-campus locations will be responsible for picking up their linen at the Linen Room between the hours of
7:00 - 4:00 p.m., Monday - Friday only.
MMC staff who wear scrubs but do not work in OR, RR, or Sterile Processing must report to the Linen Room to receive
scrubs.
Any end user issues regarding linen distribution times or quantities should call the Assistant Materials Manager.
Materials Management is authorized to use linen exchange carts for delivery to inpatient units.
Linen for clinics will be transported via covered utility cart.
Requests for new equipment must be approved by the Assistant Materials Manager.
Information
1.
2.
3.
4.
5.
Inventory par levels for each unit will be reviewed by the Assistant Materials Manager every 6 months. These par levels are
used as a guideline for daily linen distribution.
Any changes to par levels must be approved by the unit's charge nurse.
Delivered quantities will be recorded on a daily basis using ControlTex linen management software.
Supplier issues will be recorded in a phone log and reported to the Assistant Materials Manager on a regular basis.
Between the hours of 4:00 p.m. - 7:00 a.m., users must contact the Security Department to enter the Linen Room and must
record what quantities were taken.
Security
1.
2.
The Linen Room will be locked between the hours of 4:00 p.m. - 7:00 a.m., and when no staff members are present in the
room.
Between the hours of 4:00 p.m. - 7:00 a.m., the Security Department has the only access to the room and must accompany
any users requesting linen.
Distribution List
Materials Management Linen Staff
20
Nursing Administration
Security Department
Date
Sample Calculations
Labor Cost Calculations
Purpose
To calculate a cost that fairly represents the amount of time associated with a product, service, or
policy. Benefit percentages are included to estimate the true value cost of the labor required.
Costs to Include
1. Hourly Wage - the gross cost per hour earned by the employee (before taxes).
2. Salary - the annual gross salary earned
3. Benefits - benefits provided to employee (vacation, health insurance, etc.) expressed as a percentage
of their hourly wage or salary. This information can usually be obtained from the facility's
personnel department. Common percentages are 20% - 35%, depending upon the position and
benefit plans.
Calculation Descriptions
Hourly
Salary
$10.00 / hour
$25,000 / year
25%
25%
$2.50 / hour
$6,250 / year
$12.50 / hour
$31,250 / year
2,080
N/A
Annual Cost
$26,000 / year
$31,250 / year
$2,166 / month
$2,604 / month
$500 / week
$601 / week
$12.50 / hour
$15.02 / hour
$0.21 / minute
$0.25 / minute
Base Rate
X Benefit Percentage
= Benefit Cost
Rate with Benefits
Annual Hours (40 hrs/week x 52 weeks)
21
Chapter Three
Consumption
Goals
Linen consumptionhow, when, and where linen is used - is the primary driver of linen costs - and must
be controlled to satisfy financial, distribution, and consumer requirements. For instance, acquisition
costs increase when linen is thrown away since new items must be purchased. If clean linen is placed into
a soiled linen hamper, it must be re-processed, resulting in additional processing costs. There are many
situations in each facility where misuse and inappropriate utilization result in unnecessary costs.
Controlling linen consumption is one of the most beneficial, yet often neglected, methods of cost control.
A cost effective, controlled linen management program includes:
1.
2.
3.
4.
Below are several examples of inappropriate use that result in unnecessary linen costs.
Utilization Problem
Resolution
23
Utilization Measurements
Measuring a linen using activity identifies if products are being used properly and are cost effective. The
following indicators show how much linen is used:
1. Poundsthe total weight of an item(s)
2. Pieces - number of pieces used
3. Coststhe costs associated with using an item(s). These costs may include:
Processingcost to process (launder) the item
Replacementcost to purchase a new linen item
Laborcost to prepare or distribute linen
Patient volume is another important measurement. The terminology can vary, but a few examples are
listed below:
1. Census/Inpatient Daysthe number of adult patients, at one point in time, in a specific
department
2. Adjusted Patient Daysa portrayal of both inpatient and outpatient volume
3. Dischargesthe number of inpatients discharged each day. Adjusted Discharges include both
inpatient and outpatient discharge activity
4. Proceduresthe number procedures performed in a given day. Usually applies to an outpatient
department such as Operating Room cases or outpatient surgeries etc.
5. Office Visitsthe number of patients seen in a given day; usually applies to a clinic
24
Calculating Utilization
Once a linen consuming activity is defined, it can be measured. This measurement will create a
benchmark that can be compared over time or to industry standards. Once these measurements are
created, it is essential that they are reviewed periodically to identify problem areas where excessive usage
may create additional costs.
1. Start with sample data. If youve never tracked utilization, start tracking it on a trial basis by
focusing on 510 departments that use a large volume of linen. These departments can account
for over 50% of your facilitys total usage.
2. Use a computer database to record your data. Standard Textile Co., Inc.s ControlTex linen
management software is available from Standard Textile Co., Inc., to record these entries. Software
programs specifically designed to track linen consumption allow you to enter data and easily create
reports that summarize usage by pieces, pounds and dollars. These reports can be distributed to
consumers and be used as the basis of financial accountability.
3. Identify high volume consumers. Using the utilization data, determine the consumers which
use the most linen and focus on them first for process improvement opportunities. Typically,
30%35% of the distribution points can consume over 70% of the total facilitys annual pounds
processed.
4. Review data with consumers. After tracking usage for 60-90 days, review the data to make sure it
is complete, consistent, and accurate. Once you have accurate utilization information, it should be
reviewed with the linen using departments to identify areas for improvement.
5. Develop an Action Plan. After identifying opportunities for improvement, a plan of attack can
be developed with the cooperation of consumers. An Action Plan (as discussed in Chapter 7)
provides a list of specific tasks and responsibilities necessary to reach a goal and have proven to be
effective at guiding process improvement.
6. Expand your analysis. After having experience with this sample analysis, expand your analysis to
include moreif not alllinen using departments (if appropriate).
25
Sample practice guidelines, developed in cooperation with Standard Textile Co., Inc., clients, are included
in this chapter. These guidelines can serve as a starting point for developing policies in your facility.
Financial Responsibility
Ideally, consumers should share costs and assist in developing policies that control linen utilization.
However, developing shared cost responsibility is typically a 4 step process.
1. Develop a credible data source. Tracking daily linen usage is typically the first step in defining
the products, quantity, weight, and costs applicable to each department. If data has never been
tracked, it may take 6-8 weeks to develop a reliable database of usage and costs.
2. Increase awareness through information. Distributing linen usage reports and sponsoring events
that inform users of linen related costs are a good first step in raising linen awareness.
3. Include consumers in decision making. Linen utilization committees are an excellent method to
receive input and address concerns regarding suppliers, products, services and policies.
4. Implement an accounting mechanism to make patients or units financially responsible for linen
utilization. Consulting your facilitys accounting or financial department will clarify the exact
requirements for transferring budgets and charging departments.
26
Sample Policies
General Guidelines
Daily Care
1.
2.
3.
4.
1 fitted sheet
1 flat sheet
1 pillowcase
1 pillow
1 thermal blanket
Substandard Linen
1. Substandard linen is any linen that is unacceptable for use due to stains, holes, or inadequate size.
2. Any facility staff members finding substandard linen should place these items in the hamper marked Reject
Linen.
3. Do not throw out any linen
4. Materials Management staff will collect Reject Linen from each unit on a weekly basis.
5. Materials Management staff is responsible for the disposition of Reject Linen. All items will be counted
before disposing of or returning items to the laundry for credit.
Incontinence Care
Incontinent patients will be cared for in accordance with skin care and infection control policies.
Incontinence pads are suggested for patients who are likely to be incontinent or have post procedural/surgical
drainage.
An incontinence pad should be used for lifting as well as for fluid absorbency and does not require a
drawsheet below it.
27
1 fitted sheet
1 flat sheet
1 pillowcase
1 pillow
1 thermal blanket
Facility Personnel
1. Environmental Services staff is responsible for cleaning and making up discharge beds.
2. Materials Management linen staff is responsible for having linen available in each department to be used for
making up discharge beds.
Equipment and Supplies
1. Clean linen will be available in the linen storage area of each department.
2. Soiled linen bags will be supplied through Environmental Services.
Information
1. Environmental Services will be notified by the Admissions Department of patients discharged and beds to
be changed.
Security
1. Clean linen for discharge beds will be kept in primary linen storage areas, not Environmental Service carts
or closets.
Distribution List
Materials Management Linen Staff
Environmental Services
28
Nursing Administration
Security Department
Date
Basic patient linen (sheets, towels, etc.) will be stocked in each departments primary storage area (exchange cart
or closet) on a regular basis.
Excess patient linen is not to be kept in patient rooms. This excess clean linen is reprocessed at the end of the
patients stay, resulting in increased costs to MMC.
Newly purchased, boxed linen will be stored in a secured area in the linen department and injected into
circulating inventory as needed. These items must be laundered prior to distribution to consumers.
Staff Apparel
Scrub apparel items will be restocked daily in the mens and womens locker rooms in the Operating Room and
Labor and Delivery departments only.
Lab coats are available for pickup in the linen room.
Facility Personnel
1. Materials Management linen staff is responsible for stocking linen in primary storage areas (exchange carts or
closets) on a regular basis.
2. End users are responsible for stocking linen in secondary storage areas (examination rooms, auxiliary closets).
3. End users are responsible for picking up lab coats in the linen room. No lab coats will be delivered to individual
offices.
4. OR, RR, and Labor and Delivery doctors and nurses are the only authorized scrub users.
Equipment and Supplies
1. Exchange carts, linen closets, and locker room shelves are the primary storage areas outside of the linen room.
Information
1. Requests for new lab coats or additional scrub apparel should be forwarded to the Linen Supervisor.
2. Requests for changes to inventory stocking times or locations should be forwarded to the Assistant Materials
Manager.
Security
1. Stocking locations are intended to balance staff accessibility and reduce opportunity for loss. We ask all MMC
staff members to remember this when storing linen in secondary stocking areas.
2. Unauthorized scrub apparel users will be questioned by Security Department staff.
Distribution List
Materials Management Linen Staff
Nursing Administration
Security Department
Date
29
Sample Calculations
Departmental Linen Utilization Costs
Purpose
To calculate linen utilization costs by department, including grand total and patient volume related
costs. This information can be used to increase user awareness or as a tool to recharge linen expenses to
individual linen using departments. This information can also be produced using Standard Textile Co.,
Inc.s ControlTex linen management software.
This type of information can be produced for inpatient or outpatient linen users. The Patient Activity
referred to below represents the measurement that is most relevant to the linen using department. Census,
discharges, procedures, or office visits are all types of patient activity measurements that can be used.
Calculations
Distribution Point: 4th Floor Medical/Surgical Unit
formula
a
b
c=aXb
d
e=cXd
f
g=a/f
h=c/f
i=e/f
30
Flat Sheet
Patient
Gown
Total
1,050
1.25
1,313
$
0.30
$ 393.75
965
1.09
1.36
$
0.41
685
0.6
411
$
0.30
$ 123.30
965
0.71
0.43
$
0.13
1,735
1,724
$
0.30
$ 517.05
965
1.80
1.79
$
0.54
Account
Number
10-14-989
10-14-222
10-14-220
10-14-990
10-14-550
10-14-804
Department Description
4th Floor Medical/Surgical Unit
3rd Floor Womens Clinic
2nd Floor Opthamology
5th Floor ICU
Emergency Department
Operating Room
Total Costs
Linen Expense
$ 2,553.68
$
517.05
$
253.05
$ 2,719.56
$ 2,205.93
$ 4,705.94
$ 12,955.21
Calculations
Distribution Point: 4th Floor Medical/Surgical Unit
formula
a
b = a / 30 days
c = b x 10%
d=b+c
Flat
Sheet
2,120
71
7
78
Pillow
Case
2,275
76
8
84
ermal
Blanket
875
59
3
62
Patient Incontinent
Gown
Pad
1,035
1,225
35
41
3
4
38
45
31
Calculations
The calculations include assumptions about the type and number of items taken during each instance.
Several values are calculated to provide a range of potential losses that could be incurred.
Average Number of Patients Transferred:
formula
Frequency
- per day
b=aX7
- per week
21
c = a X 30
- per month
d = a x 365
- per year
Total
90
1,095
Pillow
Case
Bath
Blanket
Patient
Gown
Pillow
$ 5.50
$ 1.75
$ 5.75
$ 5.95
$ 5.75
$ 11.00
$ 1.75
$ 5.75
$ 5.95
$ 5.75
c=aXb
d
c=cXd
32
Flat
Sheet
Total
30.20
1,095
$ 33,069.00
Calculations
Policy Change Proposal: Single Item Substitution:
Replace Thermal Blankets with Bath Blankets
formula
a
b
c=aXb
d
e=cXd
f
g=eXf
Description
Current
Proposed
ermal
Blankets
Bath
Blankets
50.00
2.75
137.50
$
0.30
$
41.25
365
$ 15,056.00
74.00
1.50
112.50
* $0.30
$
33.75
365
$ 12,319.00
Difference
24.00
-1.25
-25.00
* $ 0.30
-7.50
365
-$2,737.00
33
Proposed
Difference
Proposed - Current
Qty
Weight
Qty
Weight
Qty
Weight
c=aXb
e=aXd
g=aXf
Flat Sheet
1.25
2.50
2.50
0.00
Draw Sheet
0.75
0.75
0.00
-0.75
Pillowcase
0.25
0.50
0.25
-0.25
Thermal Blanket
2.75
2.75
2.75
0.00
Patient Gown
0.65
0.65
0.65
0.00
Incontnent Pad
1.5
1.50
0.00
-1.50
n=h+i+j+k+l+m
o
p=nXo
q
r=pXq
34
Current
8.65
6.15
-2.50
$ 0.30
$ 2.60
$ 1.85
-$0.75
14,600
14,600
14,600
$37,887.00
$ 26,937.00
-$10,950.00
Annual Cost
0.30
0.30
Chapter Four
Retrieval
Goals
Retrieving soiled linen is a crucial element of linen circulation. If soiled linen is not collected on a timely
basis, inventory is unavailable for processing and cannot be re-distributed to consumers. Delays in
processing increase the potential for linen to be permanently stained and unusable.
Retrieval Guidelines
Typically, soiled linen is collected in a reusable barrier type linen bag or plastic bag. If the correct soiled
linen bag is used, all types of soiled linen may be placed into the same bag. Bagged, soiled linen may be
collected via laundry chutes or laundry carts on a daily basis to insure that all linen continues to circulate.
Inpatient areas, Emergency Departments, and other linen using departments may require more than 1
collection per day to keep rooms and hallways clear.
To avoid cross contamination, we recommend that soiled linen must be covered during transport. Upon
arrival at the laundry, all soiled linen is handled, sorted, and processed as though it were infectious.
Protective garments, appropriate wash temperatures, and chemical formulas are mandated to insure that
all linen is hygienically clean and ready for reuse.
Measurements
The timing, frequency, and quantity of soiled linen should be monitored to insure the process is effective.
There are several simple measurements that can be reviewed regularly (daily, weekly, monthly) to check
these activities.
35
Soil Factors
The amount of waste within soiled linen will vary depending upon patient acuity,
products, and utilization factors. Industry benchmarks indicate an average factor of
7%10% weight difference between soiled and clean linen.
Total Par in
System
1
2
2
2
7
When soiled linen is not collected on a timely basis, it accumulates in retrieval areas (chute room, patient
floors, clinic areas, cart staging area). In the example above, one extra par level of linen is required to
support an inefficient retrieval activity. In this example, not only are additional quantities necessary to
support a higher par level, but replacement purchases are also higher, as shown in the example below.
formula
a
b = a X 10%
c=a+b
Description
Daily Requirements
10% Safety Stock (10%)
Circulating Requirement
Purchase Requirements
Cost per Each
Total Purchase Cost
Dollar Value Increase in Par
1 Par
1,000
100
1,100
5 Par
5,000
500
5,500
6 Par
6,000
600
6,600
7 Par
7,000
700
7,700
4,000
1,500
1,440
4,000
2,600
1,440
4,000
3,700
1,440
60
$ 6.00
$ 360.00
1,160
$
6.00
$ 6,960.00
2,260
$
6.00
$ 13,560.00
$ 6,600.00
$ 6,600.00
In this example, we show that there is a substantial investment required to maintain an extra par in
circulating inventory. In this example, an additional purchase of $6,600 is requiredfor one productto
support an additional par level. This cost can be avoided by maintaining a regular collection schedule that
supports a constant flow of goods through the linen cycle.
36
Nursing Administration
Environmental Services
Date
37
Sample Calculation
Soiled vs. Clean Weight
Purpose
To calculate the number of soiled pounds retrieved and its relationship (as a percentage) to clean pounds
delivered. This number can be compared to an industry or historical benchmark to determine if the
quantity of linen retrieved is similar to the quantity of linen delivered. The benchmark shown below
is an average for hospital facilities. The patient and product mix will directly influence the appropriate
benchmark for your facility.
formula
January
March
YTD Total
c=a-b
117,343
105,898
11,445
126,730
113,311
13,419
125,792
114,370
11,422
369,865
333,579
36,286
d=c/d
10.81%
11.84%
9.99%
10.88%
10.00%
10.00%
10.00%
10.00%
0.81%
1.84%
-0.01%
0.88%
855
2,088
-15
2,928
a
b
38
February
f=d-e
g=fxb
Chapter FiveProcessing
Chapter Five
Processing
Goals
The primary goal of processing is to make linen clean and ready for consumers. The basic activities
necessary to achieve this goal include:
SortingPre-sorting
Sorting
entails separating soiled linen into categories of similar items. Post-sorting
also categorizes linen but after the products are clean. Categories may include, but are not limited
to: flat goods (sheets, pillowcases), blankets (thermals, bath blankets, spreads), OR linen (OR
wrappers, gowns, and towels), and OR apparel (scrubs and warm up jackets).
Processing
ProcessingThe combination of formulas and equipment (washers and dryers) necessary to make
linen hygienically clean.
ProductionEquipment (ironers, folders, etc) and processes necessary to fold, count and prepare
linen for distribution.
These detailed processes, procedures, equipment, chemistry, and productivity issues make it worthy of
expert attention. National and local trade associations like NAILM (National Association of Institutional
Linen Managers) and TRSA (Textile Rental Services Association) provide training in a number of
specialized disciplines. Publications such as Laundry Digest
Digest, Laundry News, and Materials Management
Magazine also provide information on industry trends and accomplishments. Keeping abreast of changes
in industry practices is a valuable method of maintaining and improving processing related skills.
The Association for the Advancement of Medical Instrumentation is currently in the process of competing
the following draft document: AAMI Recommended Practice: Processing of Reusable Surgical Textiles for Use
in Healthcare Facilities. It is anticipated that the document will be available by the Fall of 1999.
Tex Tip:
The
American
Laundry
39
Basic Elements
The heart of laundry operations is comprised of the physical space, procedures, equipment and timing
required to process soiled and prepare clean linen. Capacity is the quantity of linen that can be processed
within a 24 hour period. Processing includes the equipment, wash formulas, and chemicals used during
the cleaning process. Production includes the methods used to make clean, dry linen ready to use (folding,
stacking, binding, etc.). The basic elements which support these activities include:
EquipmentThere
Equipment
are two basic types of equipment: Machinery (Washers, dryers, ironers,
conveyors, extractors) and Utility (laundry bags, bulk carts, and bins). This equipment will vary
based on the type of linen processed. Because of frequent use, equipment must be well maintained,
clean and in adequate supply.
Labor
LaborPeople are a primary component of laundry operations. Although there is a minimum
number of staff required for daily operations, additional labor may increase a laundry's production
capabilities. Regular overtime will address infrequent problems such as machinery breakdowns or
changes in volume. Extra shifts may be needed for permanent capacity expansion should additional
customers or other factors create the need for expansion.
ActivitiesFolding, sorting, inspection, counting, and cart loading activities vary by facility. These
activities directly affect labor requirements and will impact the customer if performed incorrectly.
For instance, some laundries are not allowed to presort soiled linen; therefore staff requirements
are higher for clean linen production staff. Laundries that perform minimal quality inspections will
shift quality control responsibility to their customers.
Standardized policies and procedures and education will streamline basic activities. However, these tasks
should be reviewed periodically to identify opportunities to improve quality and improve effectiveness.
Typically, opportunities exist to reduce double handling, standardize exchange cart building, or improve
quality control.
40
Chapter FiveProcessing
Measurements
Each of the activities listed can be measured to determine if they are effective. There are two basic types
of measurements, but the elements and names used for the measurement will vary between companies
and industries. As previously mentioned, national trade associations and publications can be used as an
excellent reference.
41
Sample Policy
Memorial Medical CenterLinen Processing Policy
Policy Definition
It is MMCs intention to provide quality, clean linen to their patients and staff. To meet this need, we have
contracted with ABC Laundry Services to be our linen processing supplier. Soiled linen received by ABC from
MMC will be handled in such a way to produce minimal agitation and cross contamination. Universal/Standard
Precautions will be followed in processing, handling, and preparing linen for distribution to MMC. Finally, all clean
linen will be transported in clean, covered containers to insure quality clean linen.
Any MMC staff member having concerns about linen cleanliness should discuss these concerns with the Materials
Manager, who will forward these concerns to ABC. Any sharps found by ABC will be documented and forwarded
to MMCs Infection Control department. Equipment, patient possessions, and other non linen items found in
MMCs linen by ABC will be returned on a regular basis or as requested by MMC.
Facility Personnel
1. The Materials Management Linen Supervisor will report patient, linen staff or end user concerns to the
Assistant Materials Manager in a timely manner for follow up.
2. Infection Control will receive and review sharps incident reports in a timely manner.
3. The Assistant Materials Manager will communicate with ABC Laundry on timely basis regarding MMC
concerns.
Equipment and Supplies
1. Carts containing clean linen are the property of the supplier and should not be used for any purposes other
than the distribution of clean linen or collection of soiled linen.
2. Incident report and other forms are available from the Materials Management office.
Information
1. Incident reports are kept on file in the Materials Management office
2. The ABC Laundry procedure manuals which details the laundrys processes and procedures, are available
through Materials Management.
Security
None Required
Distribution List
Materials Management Linen Staff
42
Nursing Administration
Infection Control
Date
Chapter FiveProcessing
Sample Calculations
Linen Costs per Pound
Purpose
To calculate the total costs charged by an external laundry to process linen and provide any
additional services or products requested by linen using facility.
Costs to Include
1. Routine Processing Costsregular
Costs
costs charged by the supplier to clean and transport linen from
the laundry to the facility. There may be one or more rates charged by the supplier depending
upon the type of linen processed.
2. Supplier Labor Costscosts that reflect the suppliers time required to provide mending, repair, or
other services to the facility.
3. Miscellaneous Chargesmiscellaneous
Charges
charges for supplies or services provided by the supplier that
are not reflected in routine processing for supplier labor charges.
Linen Cost Per Pound: Calculation of all costs
Monthly Processing Charges
Total Pounds
127,155
0.280
$ 35,603.40
Miscellaneous Charges
Repair & Mending (@$8.00 per hour)
108.00
182.00
$ 1,187.50
$ 1,477.50
$ 37,080.90
127,155
$
0.292
43
Pounds
115,343
Costs
$28,835.75
22,145
$ 6,532.78
44
$
$
137,488
84.00
127.50
$35,580.03
$
0.259
Chapter FiveProcessing
Productivity Measures
Purpose
One way to measure how effective a laundry processes product is to measure the labor used to
process linen compared to the amount of linen processed. Below are two measuresPounds per
Operator Hour and Cost Per Operator Hourwhich are frequently used.
Pounds & Cost per Operator Hour: Based on 6 Day/Week Processing, 1 Shift
Formula
a
b
c
d=a/c
e=b/c
Pounds
230,000
Costs
$ 31,500
3,700
3,700
62.2
$
8.51
45
Overhead Costs
Purpose
To calculate how overhead costs contribute to linen costs per pound. Overhead includes utilities and
miscellaneous costs that are not direct product or labor costs. Overhead costs are especially important
to processing suppliers since utilities, direct costs, and other supplies contribute significant costs to their
operations. These costs are reviewed periodically (monthly, bi-monthly) to monitor cost effectiveness.
Costs to Include
1.
2.
3.
4.
Direct Coststhe cost of chemicals and other items used directly for processing
SuppliesCover gowns, gloves, and other items used during processing
Supplies
UtilitiesElectric, gas, water, & sewer costs
Miscellaneous Expensesoffi
Expenses
ce supplies, advertising, periodical subscriptions, floor space,
membership dues, and other general expenses.
Overhead Cost Calculation
April
Pounds - 98,000
Total $
Cost/lb
divide by
pounds above
46
Electricity
Gas
Water
Sewer
$ 4,909.00
$ 1,425.00
$
578.00
$
221.00
$
$
$
$
0.0501
0.0145
0.0059
0.0023
$ 19,636.00
$ 5,700.00
$ 2,601.00
$
884.00
$
$
$
$
0.0477
0.0138
0.0063
0.0021
$ 7,133.00
0.0728
$ 28,821.00
0.0700
Processing Supplies
547.00
0.0056
$ 2,079.00
0.0051
General Expenses
476.00
0.0049
$ 1,904.00
0.0046
$ 8,156.00
0.0832
$ 32,804.00
0.0797
Chapter FiveProcessing
Equipment Costs
Purpose
To calculate how much equipment expenses adds to linen costs per pound. These costs can either be
annual depreciation costs from capital equipment or machinery (washers, dryers, folders, etc.) or from
utility equipment that is purchased and expensed (utility tubs, exchange carts, etc.). Accounting practices
vary between facilities, so it is best to check with your Accounting or Finance Department for the proper
depreciation and expense methods.
Costs to Include
1. Depreciationannual depreciation from high value machinery or other equipment
2. Utility equipment expensepurchase costs of low value utility equipment that is replaced
periodically, but not depreciated.
Straight Line DepreciationCapital Equipment/Machinery
Machinery Name
Purchase Cost
Depreciated Live
Annual Depreciation
Washer
250,000.00
20
12,500.00
Ironer
10,000.00
20
500.00
Folder
25,000.00
10
2,500.00
Total Cost
285,000.00
15,500.00
Annual Pounds
25,000,000
Depreciation Cost/lb
0.0006
Purchase Cost
$
5,700
$
1,250
$
575
$
375,000
Total Expense
Annual Pounds
382,525
2,500,000
Equipment Cost/lb
0.15
47
Chapter SixProcurement
Chapter Six
Procurement
Goal
Procurement must address when, why and how much product is required. Not only must inventory
requirements, labor, products, and suppliers be considered, but four common conditions complicate the
process.
Numerous LocationsAs a recyclable product, linen may be at any one of five stagesprocessing,
distribution, consumption, retrieval or lost/damagedat any one point in time. In addition, linen
may be stored in hundreds of locations including exchange carts, closets, and examination rooms,
making it difficult to access, circulate, and estimate quantities in use.
Inconsistent Product Mix
MixIf there are no written product specifications, or if several suppliers
provide similar products, the circulating inventory can become a mix of sizes, colors, styles, and
quality. This can create "hoarding" of preferred items and reprocessing of clean, unwanted items.
Inventory vs. LaborAppropriate
Labor
circulating inventory levels typically result in adequate linen
quantities for consumers and fewer unanticipated restocking trips. However, if linen inventory
decreases, more frequent delivery trips of smaller quantities are necessary, resulting in increased
labor time. This additional labor may come from linen staff, nursing, suppliers, as well as require
administrative time to address complaints.
Price vs. ValueAn inexpensive product is not necessarily a cost effective product. The old saying
"you get what you pay for" also applies to linen. Saving $1.00 on a flat sheet that will last less than
half as long as a more expensive product doesn't "save" money. In fact, it will incse costs if you
purchase two inexpensive products to match the effectiveness and life span of one cost effective
product.
49
Why Buy?
New linen purchases are either an ongoing requirement or a one time event. Each of these situations is
described below.
Circulating Inventory Replacement
ReplacementExisting
Existing inventory levels are maintained by replacing lost
or worn out goods. This is a recurring situation that is necessary to keep sufficient quantities in
circulating inventory.
Start Up Inventory
InventoryOpening a new facility or department or implementing a new product creates
the need for new linen inventory. Once this inventory is established, it must be maintained
through replacement orders. This is a one time event that requires more product that the current
circulating inventory can provide.
New linen purchases typically require input from several parties before approval. Staff members
may provide information about the type and quantity of product required and suppliers provide
availability and shipment data. These people, as well as historical data and recent trends, are a
valuable source of information for determining the proper product quantities and delivery timing.
Procurement Considerations
Procurement requires understanding present conditions and expectation of future changes to the cycle.
There are six conditions which represent historical and future events and must be considered to develop a
sound procurement plan.
Linen Replacement FactorsSince linen is a recyclable product, it can leave the circulating
inventory intentionally due to wear or stain. It can also leave unintentionally as a result of
mysterious disappearance. These two situations influence the quantity purchased. Reviewing
your facility's specific replacement history or using industry benchmarks can guide procurement
decisions.
Par Levels. Determining a standard inventory stocking level for each department is a valuable
method for allocating inventory. When all par levels are added together, they determine the
daily quantity necessary for the entire facility. This is the first piece of data necessary to calculate
an accurate quantity to purchase (as shown in the following section). The initial steps involve
speaking with users to determine what products they need and use on a daily basis. Historical
delivery data defines quantities required. As shown below, the average daily usage is calculated, and
10% more is added to allow for variations in linen using activities. For example:
50
Chapter SixProcurement
formula
Pillowcase
2,120
71
18.5
3.82
7
78
ermal
Blanket
2,275
76
18.5
4.1
8
84
497
17
18.5
0.9
2
19
Patient
Gown
1,035
35
18.5
1.86
3
38
Cost Per UseProcurement decisions typically isolate the acquisition cost, but dont incorporate the
costs incurred over the life of the product. Typically, processing costs over a products life will
cost 300% more than the initial acquisition cost. Evaluating a product based on its cost per use
is a more accurate method of determining the true value of a product. For example:
a
b
c
d = (a*b) / c
e
f
g=e*f h=d+g
Annual
Annual
Processing Processing
Purchase
Replacement Weight
Total Cost
Item
Replacement Washings
Cost per
Cost per
Cost
Cost per Use per Each
per Use
Percent
per Each
Pound
Use
Thermal Blanket #1 $ 18.00
50%
50
$ 0.18
3.5
$
0.25 $
0.88 $ 1.06
Thermal Blanket #2 $ 22.00
50%
50
0.22
3.0
0.25 $
0.75
$ 0.97
b
c
d = (a*b) / c
e
f
g=e*f h=d+g
Annual
Annual
Processing Processing
Purchase
Replacement Weight
Total Cost
Item
Replacement Washings
Cost per
Cost per
Cost
Cost per Use per Each
per Use
Percent
per Each
Pound
Use
Thermal Blanket #1 $ 18.00
85%
50
$ 0.31
3.5
$ 0.25
$ 0.88
$ 1.18
Thermal Blanket #2 $ 22.00
35%
50
$ 0.15
4.0
$ 0.25
$ 1.00
$ 1.15
Your Order
Processing Time
to create, approve
& submit order
Flat Sheets
3 days
Linen
Manufacturers
Lead Time to
create order and
deliver to your
facility
7 days
After Delivery to
your facility, time
to receive & ship
to laundry for
processing
2 days
Laundrys Lead
Time to Process
& deliver goods
before use
2 days
51
Procurement Elements
At many facilities, we found that linen purchases were created from a reaction to a crisis, copied from
historical orders, or made based on visual estimates of existing supplies. These purchases were made in
response, or reactively, to a need or crisis. Low inventory levels or consumer complaints are often the
driving force behind this reactive behavior. Anticipating new linen needsor being proactive
proactiveresults in
consistent inventory levels and minimal complaints.
A more stable procurement plan can be established by understanding the basic elements which affect each
purchase decision. These elements require knowledge of the consumers needs, recent trends, inventory
stocking policies and supplier purchase requirements.
To describe the basic elements, we will use a sample purchase decision for flat sheets. In this situation, we
have determined the facilitys requirements for 1 day (1 par). We expanded the analysis to calculate what
would be necessary to support a 5, 6, or 7 par circulating inventory supply. The following pages describe
each of the basic elements included in this example:
Procurement ExampleFlat Sheet Requirements for 1 Month
TARGET PAR LEVELS
formula
a
Description
Daily Requirements
1 Par
1,000
5 Par
5,000
6 Par
6,000
7 Par
7,000
b = a * 10%
100
500
600
700
1,100
5,500
6,600
7,700
66
330
396
462
1,166
5,830
6,996
8,162
4,000
4,000
4,000
Inventory Requirements
1,830
2,996
4,162
1,440
1,440
1,440
390
1,556
2,722
c=a+b
d = c * 6%
e=c+d
Circulating Requirements
Loss Factor (annual loss = 72%; monthly loss = 6%)
Total System Requirements
52
Purchase Requirements
Cost per Each
6.00
$ 2,340.00
6.00
6.00
$ 9,336.00
$ 16,332.00
$ 6,996.00
$ 6,996.00
Chapter SixProcurement
Daily RequirementsThe average quantity required to supply the facility for one day. Typically,
a par level system is used to determine the average consumption for each department and
then added together to get the total facility requirements for 1 day. All remaining processes
(distribution, retrieval, and processing) are assumed to be a multiple of average daily
consumption.
1st Par Location 2nd Par Location
Distribution Linen Room
Consumption On Beds
In carts & rooms
Retrieval
In Retrieval Area
Processing
Laundry
In Transit
Total
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Total Par in
System
1
2
1
2
6
Safety StockAdditional stock kept (usually in linen room) to provide for increases in patient
activity. This is usually stated as a percentage of a daily requirement (10%, 15%, etc.).
Circulating RequirementsThis is the total quantity necessary to meet the Daily
Requirements and Safety Stock.
Replacement Factor
FactorThis
This is an estimate of the percentage of inventory expected to be removed
from circulating linen supplies. This estimate is usually stated as a percentage and includes loss
due to discard, or mysterious disappearance. Historical facility replacement rates can be used or
an industry benchmark such as Standard Textile Co., Inc.s ControlTex norms may be used.
Total System RequirementsThis is the total quantity necessary to meet Daily Requirements,
Safety Stock, and the Replacement Factor.
On Hand Inventory
InventoryThis
This is the total amount of inventory that physically exists in circulating
inventory. On hand inventory can be based on the results of a physical inventory count or an
estimate of existing supplies.
Inventory RequirementsThis is the required amount to retain after On Hand inventory
quantities have been deducted from Total System Requirements.
On Order
OrderThis is the quantity of product that is expected to be received in the near future. This
is typically the sum of the purchase orders which are expected to be received.
Purchase RequirementsThis is the total amount which should be immediately purchased and
injected into circulating inventory to meet Total System Requirements. This amount should be
compared to the suppliers requirements for order quantities and availability.
Cost Per EachPurchase cost as determined by supplier or contractual.
Total Purchase Cost
CostTotal cost of suggested replacement order to increase inventory levels.
Dollar Value Increase in Par
ParDollar value investment difference between par levels.
53
a
Avg. Daily
Usage (1 Par)
1,479
2,274
2,765
309
Description
b
Estimated
Price per
Each
$
$
$
$
7.00
3.00
7.50
8.00
Total Investment
c=a*b
d
Required
Annual
Invetment Replacement
1 Par
Factor
$ 10,353
$ 6,822
$ 20,738
$ 2,472
85%
110%
65%
72%
$ 40,385
e=c*d
Required
Replacement
per Item
$
$
$
$
8,800
7,504
13,479
1,780
31,563
Since the costs are based on the percentage of goods which must be replaced, reducing the replacement
percentage through consumer awareness programs and other efforts will reduce the annual replacement
costs, as shown below.
formula:
a
Avg. Daily
Usage (1 Par)
1,479
2,274
2,765
309
Description
Total Investment
b
Estimated
Price per
Each
$
$
$
$
7.00
3.00
7.50
8.00
c=a*b
d
Required
Annual
Invetment Replacement
1 Par
Factor
$ 10,353
$ 6,822
$ 20,738
$ 2,472
$ 40,385
75%
92%
65%
59%
e=c*d
Required
Replacement
per Item
$
$
$
$
7,765
6,276
13,479
1,458
28,979
A savings over $2,500 was achieved by reducing the amount of replacement necessary to maintain the
same par level. The value of a single par level remains the same, but the acquisition costs necessary to
maintain the inventory levels can decrease as a result of utilization changes or other practices.
54
Chapter SixProcurement
55
Sample Policy
Memorial Medical CenterNew Linen Purchases Policy
Policy Definition
It is MMCs intention to purchase quality linen which balances patient care, staff requirements, and cost effectiveness. Materials
Management has determined that the primary linen supplier, Standard Textile Co., Inc., will be responsible for supplying goods based
on the their ability to provide quality, cost effective products to MMC.
Goods will be procured based on contractual agreements, following pre-determined specifications for linen items. As part of the
XXX Purchasing Alliance, MMC will submit all new linen purchase orders to our primary linen supplier for fulfillment. Should the
primary supplier be unable to provide requested products within a reasonable time period, orders will be submitted to a secondary
linen vendor for fulfillment.
An approved list of existing linen and apparel items is available from the Materials Management department and should be reviewed
prior to submitting a new linen requisition. Materials Management will process purchase orders and forward them to the supplier.
Orders submitted to the supplier from individual departments or staff without the permission of the Materials Manager will not be
honored.
Facility Personnel
1.
2.
3.
The Linen supervisor will review inventory levels monthly to determine if new linen is required to maintain par levels. A
Purchase Order Requisition will be filled out and submitted to the Assistant Materials Manager.
Department Managers must requisition new linen required for department expansions, newly hired staff, or other events
that require increases to existing supplies.
Materials Management staff will process orders to suppliers.
Purchase Requisition forms and the Linen Supply list are available from Materials Management.
Information
1.
2.
Linen room inventory par levels will be reviewed weekly to determine the new linen needs.
New linen requisitions submitted by departments will be charged to their budget.
Security
1.
Distribution List
Materials Management Linen Staff
56
Nursing Administration
Date
Chapter SixProcurement
Whoa!
Before pulling out your calculator to analyze any linen related costs,
answer these questions:
What specific product, situation, or process do I want to
evaluate? (Hint: Write it down so you can refer to it and
explain it to others.)
Where do I get the data I need ? (if I dont already have it)
Do I have the tools necessary to calculate these costs
(spreadsheet, calculator, etc.)?
Is a pie chart or graph a better way to illustrate costs? If so,
which costs do I include?
57
Replacement Purchase
Purpose
To identify the quantity of goods to purchase in order to maintain adequate circulating linen par levels.
Procurement analysis should incorporate historical usage and replacement factors, anticipation of future
changes, and knowledge of desired par levels.
Calculations
Procurement ExampleFlat Sheets Requirements for 1 Month
TARGET PAR LEVELS
formula
a
Description
Daily Requirements
1 Par
1,000
5 Par
5,000
6 Par
6,000
7 Par
7,000
b = a * 10%
100
500
600
700
1,100
5,500
6,600
7,700
66
330
396
462
1,166
5,830
6,996
8,162
4,000
4,000
4,000
Inventory Requirements
1,830
2,996
4,162
1,440
1,440
1,440
1,556
2,722
6.00
$
6.00
$ 9,336.00
$ 16,332.00
$ 6,996.00
$ 6,996.00
c=a+b
d = c * 6%
e=c+d
Circulating Requirements
Loss Factor (annual loss = 72%; monthly loss = 6%)
Total System Requirements
58
Purchase Requirements
390
6.00
$ 2,340.00
Chapter SixProcurement
Calculations
Start Up InventoryNew Department Example
formula
Description
Estimated Activity
a
Number of Beds
b
Anticiapted Occupancy
c = a * b, or other estimate Estimated Patients/Procedures
New Inpatient
Unit
New
Outpatient
Department
20
80%
16
N/A
N/A
80
d
e
2
2
1
1
f=d*e
=c
=f
16
4
80
1
64
80
6.4
I=g+h
71
88
j=6*I
6 Par Requirement
426
528
$6.00
$6.00
$2,556
$3,168
g=c+f
h = g * 10%
k = supplier cost
l=j*k
59
Purchase Costs
Purpose
To calculate the total cost to purchase an item, including purchase costs, discounts, and associated
freight charges.
Costs to Include
1. Purchasethe suppliers listed or quoted price
2. Discountsa percentage or fixed sum that is deducted from the purchase price of the product.
Discounts may be given for large quantity purchases, discontinued items, or as rebates for
contractual compliance.
3. Freight
Freightthe cost to transport the item from the supplier to the final destination. This cost may
either be included in the price of the product or listed as a separate cost. If freight is charged
separately, it often includes the cost of transporting many different items. Therefore it can be
difficult to calculate how much freight cost is attributable to individual products. Several common
freight terms are listed below:
Prepaid
Prepaidincluded in the price of the product
FOB Destinationfreight paid by the supplier from the original storage location to the final
destination
FOB Shipping Point
Pointfreight paid by the purchaser of the product from the original storage
location to the final destination.
Example: New Linen Purchase Cost per Each- Bath Towels
Cost/Case
$ 252.50
5.05
Net Cost
$ 247.45
60
144
$
1.72
Chapter SixProcurement
New linen purchase costs may also be reflected on a cost per clean pound processed. This calculation
reflects purchases over time: monthly, semi-annually, or annually. This calculation also includes the
purchase of multiple items, not just a specific product. Calculating linen purchases per pound is shown
below:
Example: New Linen Purchase Cost per Pound
Annual New Linen Purchases
322,565
2,827,685
0.114
Calculations
Cost Per UseSingle Item (Flat Sheet)
formula
a
b
c=a/b
d
e
f=d*e
g=c+f
$ 5.25
$ 100.00
$
$
0.05
$
$
0.38
0.43
1.25
0.30
61
Calculations
Cost Per UseTwo Similar Items (Flat Sheets)
formula
a
b
c=a*b
d
e
f=d*e
g=c+f
h (1,000/ day)
i=g*h
62
$0.06
1.4
$0.30
50
$0.07
1.25
$0.30
$0.42
$0.48
365,000
$0.10
1.1
$0.30
$0.38
$0.45
365,000
$175,200
$0.33
$0.43
365,000
$163,642
$156,950
Chapter SixProcurement
Calculations
Annual Lab Coat Costs
formula
Description
Costs
Purchase Cost:
a
$8.25
Processing Costs:
b
d=b*c
e
2
52
104
$1.25
f=d*e
$130.00
g=a+f
$138.25
63
Calculations
Waste Disposal Costs per Pound
formula
a
c=a/b
1,000
5,000
0.20
Purchase Cost
Weight per Each*
Waste Disposal Cost/Pound
Waste Disposal Cost/Each
Cost per Use
Disposable Pillow
$ 2.95
0.85
$0.20
$ 0.17
$ 3.12
Surgical Towel
$ 0.50
0.1
$ 0.20
$ 0.02
$ 0.52
* Soiled weight of disposable items may be considerably higher than weight prior to use. Sample weights of
items prior to disposal may be sampled prior to calculations.
64
Chapter SixProcurement
Calculations
Costs Per Use: Reusable vs. Disposable Pillows
formula
Acquisition Cost
c=a/b
5.50
365
2.95
6.0
0.015
e=c*d
Disposable Pillow
6.0
0.492
6.0
0.090
2.950
0.035
0.85
0.20
i=g*h
0.170
j=e+f+I
0.125
3.120
Acquisition Cost
c=a/b
0.95
50
f=d*e
h=d*g
1
$
0.02
0.20
0.50
0.02
0.10
$
N/A
0.50
0.20
0.30
$
0.06
0.08
N/A
$
0.52
65
Product Standardization
Purpose
To reduce costs by reducing the number or similar items in circulating inventory. Standardizing to a
single or limited number of products or styles can reduce the purchase, labor, and storage costs necessary
to support multiple items. In the example shown below, purchase costs can be reduced by standardizing
scrub apparel from three styles to one style.
Calculations
Step 1: Define Current Order Requirements: Scrub Apparel (3 Colors)
Blue
Scrub
Shirts
formula
Misty
Scrub
Shirts
Misty
Scrub
Pants
Pattern
Scrub
Shirts
Pattern
Scrub
Pants
Total
Requirements
225
225
175
175
100
100
1000
On Hand Inventory
165
195
95
155
45
65
720
c=a-b
Order Requirement
60
30
80
20
55
35
280
24
24
24
24
24
24
2.50
1.25
3.33
0.83
2.29
1.46
11.67
15
72
48
96
24
72
48
360
d
e=c/d
66
Blue
Scrub
Pants
Pieces to be Purchased
$ 5.95
$ 5.75
$ 5.95
$ 5.75
$ 9.95
$ 9.25
i=g*h
Purchase Cost
$428.40
$276.00
$571.20
$138.00
$716.40
$444.00
$ 2,574.00
Chapter SixProcurement
Calculations
The calculations below indicate the order requirements necessary to support the same number of users
and the resulting order requirements from the supplier.
Step 2: Define Proposed Order Requirements: Scrub Apparel (1 Color)
formula
a
b
c=a-b
d
1 Color
1 Color
Scrub Shirts Scrub Pants
500
500
On Hand Inventory
Order Requirement
Case Pack (items per case from
supplier)
305
195
24
415
85
24
720
280
8.13
9
3.54
4
11.67
13
216
$5.95
$1,285.20
96
$5.75
$552.00
312
e=c/d
Cases Required for Order
f =e rounded to whole no. Full Cases to be purchased
from Supplier (cases rounded to
whole number)
g=d*f
h
i=g*h
Pieces to be Purchased
Cost Per Each
Purchase Cost
Total
Requirements
1,000
$1,837.20
Below are the purchase cost savings that result from standardizing scrub apparel from 3 colors to 1 color.
In addition to purchase costs, there may also be a resulting decline in the amount of labor or storage
associated with fewer styles.
Step 3: Calculate Standardization Savings
3 Color
Scrubs
1 Color
Scrubs
Savings:
1 Color vs.
3 Colors
15
13
360
$2,574.00
312
$1,837.20
48
$736.80
67
Calculations
This example compares the cost of preparing surgical towel packs by facility staff vs. incurring a service
charge by the supplier to provide similar towel packs. The calculations involve five steps as shown below.
Example: Supplier Provided vs. Internally Built Surgical Towel Packs
Step 1: Calculate Acquisition Cost per Use
formula =>
Surgery Towels
Wrapper
Acquisition: Total Pack
Linen
Acquisition
Cost
$1.250
$5.000
$6.250
Lifetime
Uses*
15
50
c=a/b
Linen
Total Linen
Acquisition Components/ Acquisition
Cost/Use
Pack
Cost/Use
$0.083
6
$0.498
$0.100
1
$0.100
$0.183
$0.598
*Lifetime uses will vary based on product quality, facility practices, and other factors.
68
e=c*d
Chapter SixProcurement
c=a*b
Weight/Ea
0.21
Processing
Cost/lb
$
0.28
Processing
Cost/Ea
$
0.059
0.095
0.154
Wrapper
0.34
0.55
0.28
a
Hourly Wage
(w/benefits)
$
12.50
c=a*b
750,000
13.33
500
6,665
50
2,000
h=f*g
i=e/h
100,000
$
0.067
Cost/Pack
$0.598
$0.448
$0.250
$0.067
$0.090
$1.45
70
$1.85
$1.45
$0.40
8900
$3,560.00
Chapter SixProcurement
Calculations
Example: Payback required for Scrub Apparel Dispensing Machine
Cost to lease machine: $24,000 annually. This is the cost to which we will compare any facility
costs (scrub replacement).
Labor costs, if significant, could also be included in this calculation, but we excluded from this
example.
After calculating several reduction percentages, the example shows that new scrub replacement
purchases would have to be reduced by nearly 50% to compensate for the annual cost of the
dispensing machine.
Percent Reduction Required
formula
a
b
20%
$50,000
Current Scrub
Replacement Costs
30%
$50,000
50%*
60%
$50,000
60%
70%
$50,000
20%
c=a*b
Potential Replacement
Cost Savings
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Annual Dispensing
Machine Lease Costs
$24,000
$24,000
$24,000
$24,000
$24,000
$24,000
($14,000)
($9,000)
($4,000)
$1,000
$6,000
$11,000
Savings or (Loss)
40%
50%
$50,000
Potential Percent
Reduction in
Replacement Costs
e=c-d
30%
40%
$50,000
70%
72
formula
2.0
3.0
c=a*b
Total Hours
6.0
8.13
e=c*d
48.78
g=e/f
12.0
$
4.07
Chapter Seven
Physical Inventory
Goal
Physical inventories traditionally have been used to determine the amount (quantity and cost) of linen
owned or used by a facility. However, counting linen throughout a facility can be a labor intensive process,
so the reasons behind the physical inventory process must be examined. Historically, physical inventories
have been used for 4 purposes.
Determine Valueto calculate the financial worth of linen assets.
Support Procurement Decisions- to calculate the quantity of goods necessary to reach a desired
inventory par level or balance existing inventory levels.
Identify Non Circulating Linento find departments where excess linen is stored so it can be
retrieved and recirculated.
Calculate Lossto compute the quantity and cost of items missing since the last inventory and
determine product replacement rates.
After determining that a physical inventory count is required, consistent procedures must be followed
to insure a complete and accurate count. The guidelines listed on the following pages will guide you in
performing an accurate, efficient count.
73
74
Patient Rooms
44
56
21
Exchange Cart
75
100
50
Other Storage
25
25
15
Total
144
181
86
Item
Ancillary
(Clinics)
Linen Room
Linen
Storage
Laundry
Count
Total
Flat Sheet
1,200
900
2,500
720
2,200
7,520
Pillow Case
1,500
1,200
1,800
720
1,600
6,820
Draw Sheet
800
200
400
200
1,600
3. Once the results are tabulated, investigate products with relatively high, consistent loss rates.
Physical inventory counts will reveal losses in many items. Several items may have above average
loss rates. These items should be reviewed with users to identify ways to reduce losses. Losses
(Mysterious Disappearance) can be calculated using this formula:
Calculation
+ Beginning Inventory
- Recorded Discards
quantity of recorded items (usually due to wear or stain) that were removed from
system since last physical inventory
- Ending Inventory
= Mysterious
Disappearance
Tex Tip:
Inventory
Tracking
Description
quantity of unrecorded items removed from system since last physical inventory
Inventory Tracking
Standard Textile Co., Inc.'s ControlTex software allows you to track
physical inventories, purchases, and discards. The reporting features
allow you to monitor perpetual inventories, mysterious disappearance
rates and comparative reports. To find out more about the software,
contact Standard Textile Co., Inc. at 1-800-999-0400.
75
76
January
July
February
August
March
April
October
May
June
Calculations
formula
Flat
Sheets
d=a+
b-c
e
f=d-e
g
Bath
Towels
10,000
12,500
14,500
1,440
2,880
2,160
ermal
Blankets
Grand Total
8,750
45,750
780
7,260
175
220
250
35
680
11,265
15,160
16,410
9,495
52,330
7,785
9,695
7,075
5,950
30,505
Mysterious Disappearance
3,480
5,465
9,335
3,545
21,825
1.50
$ 15.75
5.50
1.75
h=fXg
$ 19,140
$ 9,564
$ 14,003
$ 55,834
i=f/a
34.80%
43.72%
64.38%
40.51%
98,540
47.70%
77
Chapter Eight
Action Plans
Goal
Not only are linen managers charged with supervising the daily activities of their department, but they
are often asked to perform cost analysis, implement special programs, train staff members, and monitor
supplier's performance. We have provided you with tools to support these activities, but perhaps the most
important key to successfully meeting these challenges is organization.
Many great ideas have come and gone, often because no one outlined the specific actions that must occur
to meet the goal. One of the most effective tools for organizing a project is an Action Plan. This plan
provides a "blueprint" for a project that outlines the specific steps necessary to complete a project, without
being too complex to create, monitor, or revise. An effective Action Plan contains four key elements:
Specific, concisely written, project goal - what policy, procedure, activity, or report should be in
place at the end of the project?
Steps required to complete goal - what specific actions are required to meet the goal?
Target dates - what is a reasonable time estimate for completing each step?
Responsible parties - who must be involved to complete each step?
Monitoring mechanism - what measurement indicates that the project is completed and reaches
the desired goal?
Action Plans are effective for both long and short term planning. Using this template for a process
improvement goal or for a daily guide is an effective way to monitor the processes, people, and times
that must be coordinated to reach a goal or provide a service. Once an Action Plan is complete, it serves
as a monitoring tool for management and staff. Each step can be reviewed regularly - usually weekly or
monthly - and revised as needed.
Examples of several Action Plans are listed on the following pages. Each one was designed for a specific
goal and shows the key steps and target dates necessary to complete the project.
79
Target Date
Responsibility
Comments
Jan 15th
Linen Supervisor
Jan 30th
Linen Supervisor
Feb 1st
Materials Mgr
Feb 15th
March 1st
Linen Supervisor
April 1st
Materials Mgr
Action Plan Example: Implementation Action Plan Used as Project Status Report
Project Goal: Coordinate
Changeover to New Processor
Est. Date:
Responsibility
Current Status
6/3
Asst. MM to coordinate
Done
week of 6/10
Done (conversion
planned for Aug 4th)
6/3
Linen Supervisor
Done
week of 6/10
Done
week of 6/10
Done
6/24 - 6/25
week of 6/17
Asst. MM
7/5
Open
8/6
Open
80
Action Plan Example: Implementation Action Plan Used as Project Status Report
Linen Awareness Day Action Plan
Expected Date
Responsibility
Comments
Preparation
Work with Value Analysis
Committee to establish
date, time, and
participants
Optain administration
support and
involvement
Define materials to use
Prepare Materials
Communicate date and
event throughout
facility:
- Flyers - two weeks
prior
- Article in hospital
publication - one
week prior
- E-mail departments 2
days before
Day of Event
Set up visual aides
Follow-Up
Publish article in
hospital publication
summarizing event
Critique with Value
Analysis Committee
81
People
Distribution
Products
Review Purchasing
Practices
Train staff to
Review current
respond promptly clean linen delivery
and courteously to time schedule
users
Review current
product line for
standardization
opportunities
Responsibility
Linen Manager &
Supplier Contact
Review JCAHO
standards with
linen staff
Responsibility
Linen Manager & Linen
Staff
Responsibility
Materials Manager &
Linen Manager
Monitor 3 high
volume users
with ControlTex
utilization data
82
Consumers
Responsibility
Materials Manager &
Linen Manager
Review inventory
stocking levels in
linen room
Review linen
Replace linen
security in unlocked on regular time
or high traffic areas schedule (every 2-4
weeks)
Chapter Nine
Compliance
Goals
Federal, state, and local government agencies are empowered to insure quality processes are in place
and routinely followed. Regulations change periodically and must be reviewed by linen and laundry
departments to insure they follow mandated procedures. Generally, these regulations address three primary
areas:
Safe and proper handling of clean and soiled linen to reduce the potential for contamination to
staff and patients.
Awareness of facility's mission, patients, and linen products.
Employee training and associated documentation to verify awareness of regulations.
Below is a list of processes monitored by JCAHO, OSHA, EPA, and other agencies, but is not limited
to those agencies. Each process requires annual or semi annual employee training. Documentation of
each training session, as well as policy and procedure manuals, must be on file at the facility. Since these
regulations are designed and enforced by agencies external to the facility, they can only be monitored by
infrequent onsite (and often unannounced) visits and documentation provided by the facility.
Safe Handling Training
Soiled Linen Handling and
Appropriate Use of Protective
Attire
Handwashing Technique
Fire Safety
Lock Out / Tag Out
Machine Safety
Confined Spaces
Employee Awareness
Facility Orientation
Performance Review
Competency Review
Employee Physicals
Reporting Accidents
Life Saving/CPR
Observing Safe Work Practices
83
Monitoring
There are two ways to evaluate and monitor your facility's degree of compliance. Both methods require
active participation by management. Identifying, addressing, and correcting potential violations requires
aggressive action and follow up by supervisory staff. These two general methods are:
1. Observation - Visually observing the implementation of mission statements, policies, practices,
equipment, and existing documentation is a method to insure that compliance procedures are
in place. This method is often used by federal, state, and local agencies during a formal review,
but should also be used by managers and supervisors on a more frequent basis to insure that staff
members regularly meet regulatory requirements.
2. Documentation - Written verification that procedures are followed is one of the primary
measurements of compliance. Below you will find a list which includes, but is not limited to
policies and procedures which must be in place.
Policy and Procedure Manual
Infection Control Manual (or section within Policy & Procedure Manual)
Exposure Control Plan
Employee Training Documentation
Agency violations related to linen and laundry procedures
Tex Tip:
To contact your nearest local JCAHO representative,
contact the national association at:
One Renaissance Blvd
Oakbrook Terrace, IL 60181
708-916-5600
84
Index
Index
A
AAMI 39
accounting mechanism 26
acquisition 51, 54
acquisition cost 23, 51
acquisition cost per pack 68
action plan 25, 79, 80, 81, 82
activities 40
acuity level 13
adjusted patient days 10, 24
American Laundry and Linen College 39
annual savings 70
B
bed changes 13, 27
benchmark 25, 36, 38, 50, 53
C
census 30
census/inpatient days 24
circulating inventory 2, 3, 8, 29, 36, 49, 50, 52, 53,
66, 77
circulating inventory replacement 50
circulating requirements 53
clean weight 35, 37, 38
customer owned goods 2
collection times 35
commercial laundry 2, 5, 9, 37, 74
compliance 2, 8384
consumers 2, 5, 6, 7, 26, 76
direct users 2
end users. See Consumers; consumers
consumption 2, 6, 8, 13, 16, 18, 23, 25, 26, 32,
36, 39, 49, 53
consumption practice guidelines 26
ControlTex 14, 25, 30, 32, 53, 75
cost per activity 41
D
daily requirements 53
database 14, 25, 26
delivery review practices 18
delivery routes 17
delivery schedule 16
depreciation 3, 9, 47
direct costs 46
discards 2, 75
discharge 24, 27, 28, 30, 34
distribution 2, 3, 5, 6, 8, 13, 14, 15, 20
distribution location profile 15
dollar value increase in par 53
domino effect 55
87
E
end users 2, 5, 24, 29
equipment 3, 7, 9, 16, 17, 39, 40, 42, 47, 71, 84
F
FOB 60
I
in total 10
incontinence care 27
incontinent pads 27
incontinent patients 27
infection control 27, 42
information systems 3
inject 3
inventory 1, 2, 3, 7, 8, 9, 16, 20, 29, 35, 36, 49, 50, 52,
53, 54, 55, 56, 59, 66, 73, 74, 75, 76, 77
inventory requirements 53
inventory tracking 75
inventory vs. labor 49
item substitution 33
M
materials management 28, 29, 37, 42
Materials Management Magazine 39
materials manager 29, 42
mysterious disappearance 3, 50, 53, 75, 77
N
National Association of Institutional Linen Managers
(NAILM) 39
NOG 2
non circulating linen 73
not our goods 2
JCAHO 83, 84
on hand inventory 53
on order 53
order requirements 51, 67
OSHA 83
overhead 3, 9, 46, 69
labor 3, 7, 9, 24, 40, 41, 43, 45, 46, 49, 65, 68, 71
labor and delivery 29
labor cost calculations 21
labor cost per activity 10
labor cost per pack 69
Laundry Digest 39
Laundry News 39
linen carts 35
linen circulation 5, 6, 35
linen consumption 23
linen costs 2, 9, 23, 24
linen costs per pound 43
linen cycle 2
linen distribution policy 20
linen exchange cart 20, 27
88
Index
safety stock 53
sample practice guidelines 26
scrub apparel 29
scrub apparel dispensing machine 71
security 7, 29, 37
skin care 27
software 25
soil weight 35
soiled linen 2, 5, 6, 8, 23, 28, 35, 36, 37, 39,
40, 42, 74, 77, 83
soiled linen carts 35
soiled linen weight 35
sorting 39, 40
standardization 66
standardization savings 67
start up inventory 50, 59
stocking level 50
stocking levels 8, 31, 59
substandard linen 27
supplier 8, 20, 37, 42, 43, 44, 51, 52, 53, 56,
60, 67, 68, 71, 72
supplier labor costs 43
supplies 46
R
recharge 24, 30, 63
recommended practice 26
replacement 1, 2, 7, 9, 10, 24, 33, 36, 50, 53,
54, 55, 58, 71
replacement factor 53
retrieval 2, 8, 3536, 36, 49, 53
routine processing costs 43
T
Tex Tip 24
Textile Rental Services Association (TRSA) 39
total cost per pack 69
total purchase cost 53
total system requirements 53
traditional linen model 5
U
utility equipment expense 47
utilization 2, 3, 13, 14, 18, 19, 23, 24, 25, 26,
30, 33, 36, 54
89
Associations
American Association of Textile Chemists and Colorists (AATCC)
One Davis Drive
PO Box 12215
Research Triangle Park, NC 27709-2215
Website: http://www.aatcc.org
American Reusable Textile Association (ARTA)
P.O. Box 1073
Largo, FL 33779-1073
Website: http://www.arta1.com
American Society for Healthcare Environmental Services (ASHES)
One North Franklin
Chicago, IL 60606
Phone: (312) 422-3860
Fax: (312) 422-4572
Website: http://www.ashes.org
The Association of Operating Room Nurses (AORN)
AORN, Inc.
2170 South Parker Rd, Suite 300
Denver, CO 80231-5711
Phone: (303) 755-6300 or (800) 755-2676
Website: http://www.aorn.org
90
Index
91
ISBN 0-9663708-1-3
00099637-11/04