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Linen

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

Linen Management Practices

Contents
Forward .................................................................................x
Introduction..........................................................................xi
A Multi-Billion Dollar Industry ...................................................................................xi
A Unique Commodity ...............................................................................................xii
Supplier Relationships.................................................................................................xii

Chapter OneThe Basics..........................................................1


Common Linen Terms..................................................................................................2
Traditional Linen Model ...............................................................................................5
Tex Quiz: Can you answer these questions? ......................................................................5
Linen Flow Model ........................................................................................................6
Policy Development ......................................................................................................7
Policy Components.......................................................................................................7
Tex Tip: Before developing a policy, ask the following questions .........................................8
Basic Cost Elements......................................................................................................9
Measurements.............................................................................................................10
Tex Tip: Writing Analysis Reports .................................................................................11

Chapter TwoDistribution .....................................................13


Distribution Guidelines ..............................................................................................13
Developing a Distribution Plan...................................................................................14
Step 1 - Create a Product Profile List..................................................................................... 14

Tex Tip: ControlTex Linen Management Software........................................................14


Step 2 - Create a Distribution Location Profile...................................................................... 15
Step 3 - Establish a Delivery Schedule ................................................................................... 16
Step 4 - Establish Consistent Delivery Review Practices ........................................................ 18

Monitoring High Volume Consumers.........................................................................19


Sample Calculations....................................................................................................21
Labor Cost Calculations ........................................................................................................ 21
vi

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

Patient Transfer Linen Consumption ..........................................................................32


Utilization Policy Change ...........................................................................................33

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

Chapter FiveProcessing ......................................................39


Tex Tip: The American Laundry and Linen College.......................................................39
Basic Elements ............................................................................................................40
Measurements.............................................................................................................41
Sample Policy..............................................................................................................42
Sample Calculations....................................................................................................43
Linen Costs per Pound.......................................................................................................... 43
Productivity Measures ........................................................................................................... 45
Overhead Costs..................................................................................................................... 46
Equipment Costs .................................................................................................................. 47

vii

Linen Management Practices

Chapter SixProcurement .....................................................49


Why Buy? ...................................................................................................................50
Procurement Considerations .......................................................................................50
Procurement Elements ................................................................................................52
Item Specific Replacement Procurement .....................................................................54
Tex Tip: The Domino Effect .........................................................................................55
Sample Policy..............................................................................................................56
Tex Tip: Before analyzing linen related costs, answer these questions ................................57
Replacement Purchase.................................................................................................58
Start Up Inventory Purchases ......................................................................................59
Purchase Costs ............................................................................................................60
Cost Per UseSingle Item............................................................................................61
Cost Per Use Comparison of Multiple Items ...............................................................62
Annual Apparel Costs .................................................................................................63
Disposable Product Costs............................................................................................64
Comparison of Reusable and Disposable Product Costs Per Use .................................65
Product Standardization..............................................................................................66
Internal Labor vs. Supplier Service Charge ..................................................................68
Measuring New Products & Services Costs .................................................................71

Chapter SevenPhysical Inventory ........................................73


Physical Inventory Count Guidelines .........................................................................74
Tex Tip: Inventory Tracking..........................................................................................75
Alternative Physical Inventory Practices ......................................................................76
Mysterious Disappearance Costs .................................................................................77

Chapter EightAction Plans .................................................79


Chapter NineCompliance....................................................83
Monitoring .................................................................................................................84
Tex Tip: JCAHO .........................................................................................................84

Index ...................................................................................87
viii

Linen Management Practices

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

Linen Management Practices

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

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:

Provide clean, usable, quality products;


in ample supply;
on a timely basis;
in a convenient location;
to support patient care or staff linen needs;
at a managable replacement and processing cost.

Balancing these goals is impacted by three variables:


1. Constantly fluctuating patient volume which impacts inventory needs and delivery timing;
2. Cost cutting initiatives which reduce labor, affecting the ability to delivery correct quantities at the
right time; and
3. Budget restrictions which may offset the quantity and timing of new linen purchases.
It is still possible to meet linen management goals and control costs. The first step requires understanding
basic terminology and the physical flow of linen. Once we know the basics, we can define the processes,
policies and measurements necessary to properly manage linen.

Linen Management Practices

Common Linen Terms


Although there are regional differences in terminology, there are basic terms and concepts that are used
throughout the linen and laundry industry. A summary list is presented below and will be referred to
throughout this book:
Term

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.

Chapter One - The Basics

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.

Linen Management Practices

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.

Chapter One - The Basics

Traditional Linen Model


Historically, linen management was thought to be quite simple: wash, use, and return. However, this
approach does not allow us to understand the critical success factors of a quality linen process. The
traditional model represents the overall physical movement of linen (illustration 1.1). It shows that linen
circulation is a closed process - one where linen does not have an opportunity to leave the system. It does
not explain how linen leaves the system or where the potential for incurring costs lies.

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.

Can you answer these questions?


1. How many clean pounds are processed for your facility each month? Each
year?
2. If you use a commercial laundry, how often does your processor deliver to
your facility? Do they deliver on holidays?
3. Do you know how many linen distribution points are in your facility?
4. Who are your highest volume consumers? How much linen do they consume
during the year?
5. How frequently is soiled linen collected in your facility?

Tex Quiz: Can you answer these questions?


5

Linen Management Practices

Linen Flow Model


Over 25 years of experience in linen process improvement has helped Standard Textile to create a
new version of the traditional model. The Linen Flow Model demonstrates that linen circulation is an
open system - one that is susceptible to increased costs when linen flows out of the cycle. Each time
items leave the flow because of loss, wear, or inaccessibility, a cost is incurred and new linen must be
procured. Unnecessary processing costs result when linen flows through the cycle, but is not used. Finally,
unnecessary events deplete or slow down the flow of linen. However, defining and measuring each of the
five processes results in focused and continuous improvement efforts.

Linen Flow Model Processes


Procurement - Purchasing new linen and injecting into the cycle
Distribution - Transporting linen from the linen/laundry area to
consumers
Consumption - Using linen for patient care for staff needs.
Retrieval - Retrieving soiled linen from consumer areas to collection
points
Processing - Cleaning soiled linen and preparing it for customers

Chapter One - The Basics

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

Linen Management Practices

Before developing a policy, ask the


following questions:
Procurement
What rules should be in place to guide the relationship with a
supplier? Are there guidelines to insure the most cost effective
products and services are procured? What specific products are
required to meet the facilitys needs? When, where, what, and how
much linen must be injected to insure adequate circulating inventory
supplies?
Processing
What procedures are in effect to comply with governing agency
guidelines and insure clean, quality linen? What pick up, delivery, and
processing schedules are required to meet all customers needs?
Distribution
When, where, how, and who distributes linen to users? Who prepares
the linen so it is ready for users? Are there established inventory
stocking levels and delivery schedules? Are delivered and consumed
quantities tracked for trends?
Consumption
What guidelines are in effect to insure the proper products and
quantities are used for quality patient care? Are policies in effect to
control the amount of linen used?
Retrieval
What procedures are in effect to collect soiled linen on a timely basis
and insure safety for staff members?

Tex Tip: Before developing a policy, as the


following questions
8

Chapter One - The Basics

Basic Cost Elements


Policy guidelines direct how an activity is performed, but costs measure how effective the policy is. In
recent years, there has been increasing need to measure the detailed costs of products or services. Linen
is no exception. Traditionally, managers measured the effectiveness of linen in pounds or pieces, and in
annual budget performance. New methods of measuring linen costs are evolving which include not only
processing and new linen replacement costs, but also labor, overhead and all other associated expenses.
The cost elements listed below are typical measurements associated with most activities. There may be
additional measurements that meet individual facility reporting requirements.

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

Linen Management Practices

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

Chapter One - The Basics

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.

Writing Analysis Reports

Be considerate of your audiences time and familiarity with the


subject. Include explanations or background data if necessary.
Provide the most meaningful data in the most concise format.
format Use
visuals and concise text to describe problems and recommendations.
Shifting costs from one budget (Materials Management) to
another budget (Nursing) is not a cost savings. This is a shift
of responsibility that requires users cooperation and knowledge to
achieve reductions in total cost.
Provide comparative data.
data This allows the reader to relate
information to historical or industry data and understand the
magnitude of a cost, problem, or recommendation.
Consider the importance of non-financial factors.
factors Non financial
factors including internal politics, public relations, history, and
relationships must also be considered with financial information.

Tex Tip: Writing Analysis Reports

11

Chapter Two - Distribution

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

Linen Management Practices

Developing a Distribution Plan


A distribution plan that outlines clean linen delivery timing, frequency, labor, and product requirements
is essential for meeting linen management goals. A profile for each distribution location as well as a master
plan for delivery to all departments, must be created to meet and balance these goals. If a distribution
schedule currently exists, it should be periodically updated to reflect departments that have expanded,
closed, or moved. The general steps necessary to create this plan are shown on the following pages.

Step 1 - Create a Product Profile List


A database listing each products identifying number, description, weight, and processing costs must be
created to accurately track utilization and total costs. A sample profile is shown below:
Sample Product Profile
Vendor
Item
Number
15114633
15114933
80032310
45322433
AP9093

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

Standard Textile Co., Inc., offers ControlTex linen management


software which captures detailed usage data and produces reports
about each location. This software is part of STCs comprehensive
linen management program that has proven to be effective for over
25 years.

Tex Tip: ControlTex Linen Management Software


14

Chapter Two - Distribution

Step 2 - Create a Distribution Location Profile


A Distribution Location Profile lists all the descriptive information including the name, delivery system
(exchange cart or closet), delivery frequency, products used, and par levels. To create this information:
1. Assign a number and descriptive data to each distribution location (example: Area 100 Emergency Department) and department type (ie. inpatient or ancillary).
2. Add the units accounting/financial code.
3. Assign the delivery type and delivery frequency.
4. List which products are delivered to each location.
5. Determine the quantity of each product delivered to each location based on consumer
requirements. These requirements may fluctuate in accordance with patient volume.

The resulting profile distribution location profile is shown below:


Distribution Location Profile
Distribution Profile: ...........................#100 Emergency Department
Type of Department: .........................Ancillary/Outpatient
Accounting Cost Center: ...................52-6534
Delivery Type: ...................................Exchange Carts
Deliveries Frequency:..........................Sun, Mon, Tues, Wed, Thurs, Fri, Sat
Number of Deliveries/Day: ................2 exchange carts per day
Par Levels: .........................................Shown Below:
Item #

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

Linen Management Practices

Step 3 - Establish a Delivery Schedule


A delivery schedule is dependent upon consumer requirements, labor, equipment and product availability.
Establishing distribution priorities will provide guidance to creating or revising distribution schedules.
There are five general guidelines which should be considered when creating a delivery schedule.
1. Solicit input from high volume consumers. Delivering linen at 9 a.m. to a department which
performs 7:30 a.m. bed care can result in low inventory levels when users need linen the most.
Information regarding patient volume and patient care routines from the highest linen using
departments will result in fewer complaints and more efficiencies for consumers and distribution
staff.
2. Prioritize deliveries according to consumers time requirements and consumption patterns.
Typically, an Operating Room has first priority since they require scrub apparel to perform early
morning surgical cases. High volume patient linen consumers should also have a high priority
because of the large quantity they require on a daily basis. Establishing distribution priorities will
guide linen staff and consumer expectations for delivery. For instance, a typical priority list is:
Priority
1st
2nd
3rd
4th

16

Departments

Operating room Linen; Scrub Apparel


High Volume Consumers (inpatient units, Emergency
Departments, Radiology, Physical erapy)
Low Volume End Users (Outpatient Clinics)
Lab Coat Deliveries

Chapter Two - Distribution

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

Weekdays 6 am - 2:30 pm Weekdays 10 am - 6:30 pm


Shift
Shift
OR Scrubs & Linen
Inpatient Areas
Inpatient Areas
ER & Radiology Linen
Inpatient Areas
Low Volume Clinic Deliveries
Prepare exchange cards for Low Volume Clinic Deliveries
next day

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

Security Dept. Access

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

Linen Management Practices

Step 4 - Establish Consistent Delivery Review


Practices
Consumer needs change over time. Patient volume may fluctuate continually and care routines vary in
reaction to new policies or procedures. In addition, many facilities add or move departmental locations
on a continual basis. Finally, changes to the linen product mix occur over time and consumers may not be
aware of the products available to them.
These changes present the need for regular review of distribution schedules to meet the primary goals of
delivering the right product at the right time to the right location. There are several guidelines to follow to
effectively review your distribution system.
1. Establish a pre-determined review period. Create a standard review schedule which allows review
of high volume distribution points within a 6-12 month period. This may be a rotating schedule
as shown below.
January
February
March
April
May
June

1st, 2nd, 3rd Floors


4th, 5th Floors
ER Physical erapy, Radiology
OR, Recovery, Sterile Processing
Outpatient Clinics
Surgical Apparel Distribution Pts.

July
August
September
October
November
December

1st, 2nd, 3rd Floors


4th, 5th Floors
ER Physical erapy, Radiology
OR, Recovery, Sterile Processing
Outpatient Clinics
Surgical Apparel Distribution Pts.

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

Chapter Two - Distribution

Tex Tip: 20% Return Rule


20% Return Rule
Par levels usually include 20% extra stock to allow for changes in
customers needs. If the percent of goods returned on exchange carts
routinely varies from this number by more than 50%, you should review
the par level quantities youve established.

Monitoring High Volume Consumers


High volume consumers can have a dramatic impact upon delivery routines and product requirements. In
some instances, 5-10 distribution points may consume 70% of total pounds consumed. Focusing on these
few areas can help control costs and improve customer service.
Once these high volume distribution points are identified, they should be reviewed on a regular,
disciplined basis to insure their requirements are current and to see if any changes can be made to improve
service or utilization. The format below can be used to monitor these consumers.
Average Monthly
Pounds

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

Linen Management Practices

Memorial Medical Center - Linen Distribution Policy


Policy Definition
In order to support our patients and staff, Memorial Medical Center (MMC) Material Management Department will deliver linen
between the hours of 6:00 a.m. to 4:00 p.m., 7 days per week. Materials Management is responsible for the preparation and delivery
of:
1.
2.
3.

Patient linen for inpatient and clinic unit.


Surgical apparel to the Operating Room, Recovery Room, and Sterile Processing
Delivery of lab coats to clinic areas

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.

Equipment and Supplies


1.
2.
3.

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

Signature of Materials Management

20

Nursing Administration

Security Department

Date

Chapter Two - Distribution

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

Cost per Month (divide Annual Cost by 12)

$2,166 / month

$2,604 / month

Cost per Week (divide Annual Cost by 52)

$500 / week

$601 / week

Cost per Hour (divide Annual Cost by 2080)

$12.50 / hour

$15.02 / hour

Cost per Minute (divide Cost per Hour by 60)

$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

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.

Activities for which linen is (and is not) used


Suggested products for each activity
Measurements used to monitor effectiveness
Cooperation of consumers to implement programs and contain costs

Below are several examples of inappropriate use that result in unnecessary linen costs.
Utilization Problem

Resolution

Cutting patient gowns sleeves to insert


IV

Provide IV gowns to units for IV patients

Use of disposable incontinent products


and draw sheet.

Implement reusable incontinent pads for


absorbency and lifting

Above average thermal blanket usage

Implement policy to change blankets


every other day or as needed.

Unauthorized staff members wearing


scrub shirts & pants, but not returning
them

Provide uniforms or alternative clothing;


restrict access to scrub supply

Excess clean linen left in room after


patient is discharged

Establish standardized bed making


practices; educate consumers.

ermal blankets used in ancillary areas

Replace thermal blankets with bath


blankets it needed for patient warmth.

23

Linen Management Practices

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

Sharing Costs with Consumers


A recent case study from a 400 bed facility in the Midwest
showed that a combination of consumer awareness and
recharging linen costs to floors or patients resulted in a 20%
decrease in facility wide linen costs.
Consult your Accounting or Finance department about the
methods necessary for your department to recharge floors or
patients.

24

Chapter Three - Consumption

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

Linen Management Practices

Clinical Practices for Consumption


Consumption practice guidelines are developed by defining a specific activity and what products should
be used for that activity. These guidelines can be general, yet still provide enough material to inform users
and control costs. Guidelines are also used as a basis for formal policy development or as an informal
method to communicate recommended practices. These guidelines should address:

For what patient care activity is linen being used?


When does the activity happen?
What is the recommended practice for using linen in this situation?
Where should this product be used?
Which staff members are involved in using the product?
How should the product be disposed of?

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

Chapter Three - Consumption

Sample Policies
General Guidelines
Daily Care
1.
2.
3.
4.

Nursing staff is primarily responsible for routine bed changes.


Beds will be changed daily or when soiled.
Thermal Blankets will be changed every other day or when soiled.
Only linen that is required to make the bed that day should be taken into the patient room. Additional linen
supplies are to remain on the linen exchange cart.
5. Only reusable incontinence pads will be used for patients. Disposable incontinence pads will be kept on hand
for emergencies.
6. Beds will not be changed if a patient will be discharged that day.
Discharge Beds
1. Environmental Services staff will change all linen upon discharge of patients.
2. Each discharge bed will be made up with the following items:

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

Linen Management Practices

Sample Policies: Memorial Medical Center Linen


Utilization: Discharge Bed Change Policy
Policy Definition
In order to conserve linen, the following guidelines will be followed when making up beds after a patient has been
discharged.
1. Environmental Services staff will change all linen and wipe down mattress and pillow.
2. Any clean linen that was left on chairs, window sills, or other exposed areas should be placed into soiled
linen.
3. Each discharge bed will be made up with the following items:

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

Signature of Materials Management

28

Nursing Administration

Security Department

Date

Chapter Three - Consumption

Sample Policies: Memorial Medical CenterPar Level


Stocking Policy
Policy Definition
It is MMCs intention to provide consumers with the proper products and quantities for patient care and staff apparel
requirements. Linen is an asset; therefore access will be restricted to authorized staff to protect MMCs linen investment.
The inventory guidelines listed below should be followed by all MMC staff.
Patient Linen

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

Signature of Materials Management

Nursing Administration

Security Department

Date

29

Linen Management Practices

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

Total Monthly Usage (pieces)


Weight Per Each
Total Monthly Pounds
Cost Per Pound
Total Monthly Cost
Total Monthly Activity (patient volume)
Average Daily Pieces per Activity
Average Daily Pounds per Activity
Average Daily Cost per Activity

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

Chapter Three - Consumption

Facility Summary of Linen Costs


formula
a
b
c
d
e
f
g = a+b+c+d+e+f

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

Par Level Stocking Levels


Purpose
To determine the quantity of linen, by item, to support one day's usage. These calculations can
be performed for a single department or an entire facility. In addition, Standard Textile Co., Inc.'s
ControlTex linen management software can automatically calculate these levels and provide revisions as
usage changes.

Calculations
Distribution Point: 4th Floor Medical/Surgical Unit
formula
a
b = a / 30 days
c = b x 10%
d=b+c

Total Monthly Usage (pieces)


Average Daily Usage
Safety Stock (10% of daily usage)
Suggested Daily Stocking Level

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

Linen Management Practices

Patient Transfer Linen Consumption


Purpose
To examine the cost of linen used to support patient transfers out of a facility. Even though an ambulance
may leave the linen they brought with them in a soil hamper, it may not be of the quality or type that the
facility uses. Patient transfers to nursing homes or other care centers also results in a loss to the facility.
Therefore, linen may have to be replaced and will result in a potential loss to the facility.

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

Average Number of Items used during Patient Transfer:


formula

Pillow
Case

Bath
Blanket

Patient
Gown

Pillow

Quantity Used Per Transfer

Cost per Each

$ 5.50

$ 1.75

$ 5.75

$ 5.95

$ 5.75

Cost per Transfer

$ 11.00

$ 1.75

$ 5.75

$ 5.95

$ 5.75

c=aXb
d
c=cXd

32

Flat
Sheet

Annual Number of Transfers


Total Cost

Total

30.20
1,095

$ 33,069.00

Chapter Three - Consumption

Utilization Policy Change


Purpose
To calculate the cost of a proposed change in utilization policy. Typically, replacement and processing costs
can be affected by a change in policy, so they should be reviewed prior to policy implementation. The
example below outlines the cost savings resulting from an item substitution.

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

Average Daily Usage


Weight Per Each
Average Daily Blanket Weight
Processing Cost Per Pound
Average Daily Blanket Processing Cost
Days Per Year
Annual Cost

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

*Pertains to Healthcare facility utilizing commercial laundry for processing service.

33

Linen Management Practices

Policy Change Proposal: Multiple Item Substitution


Standardization of Discharge Bed Making Policy
Weight/
Each
formula

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

Total Weight per Bed

8.65

6.15

-2.50

Processing Cost per Pound

$ 0.30

Processing Cost per Bed

$ 2.60

$ 1.85

-$0.75

Annual Discharge Bed


Changes

14,600

14,600

14,600

$37,887.00

$ 26,937.00

-$10,950.00

Annual Cost

0.30

0.30

Chapter Four - Retrieval

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.

Soiled linen Weight


WeightThe total weight of all carts collected in a 24 hour period.
Soiled linen CartsQuantity of carts collected
Collection TimesWritten log of when, who, and how much linen was retrieved
Soil Weight vs. Clean Weight
WeightComparison of the facility's total soiled weight vs. clean weight
returned. This should be compared over several weeks (2-4) to identify potential losses and average
percent of soiled weight.

35

Linen Management Practices

Tex Tip: Soil Factors

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.

Retrieval and Procurement


Soiled linen is the link between consumption and processing. This activity provides inventory for the next
cycle of processing, distribution, and consumption. The chart below provides an example of where linen
supplies are located at any one point in time, using a 1 par level (day's supply) as a measurement.
Primary
Process
Distribution
Consumption
Retrieval
Processing

1st Par Location 2nd Par Location Extra Location


Linen Room
On Beds
In cards & rooms
In Retrieval Area
In Retrieval Area
Laundry
In Transit

Total Par Level

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

d = actual inventory On Hand Inventory (estimated 4 Par)


e=c-d
Inventory Requirements
f = existing order On Order (receive within 2 weeks)
g=e-f
h = Supplier cost
i=gXh
j

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

Chapter Four - Retrieval

Memorial Medical Center - Linen Retrieval Policy


Policy
olicy Definition
Soiled linen will be collected on a daily basis in order to maintain the circulation of linen. Soiled linen
in inpatient areas, ER, Physical Therapy, and Radiology will be collected twice per day (minimum).
Other patient care areas will be collected once per day; off site clinics and other low volume consumers
will be collected as needed. All soiled linen items will be processed by MMCs commercial laundry
supplier.
Facility Personnel
1. Environmental Services is responsible for collecting soiled linen from the patient care areas
and transporting it to the Receiving Dock for pick up by the laundry supplier. They are also
responsible for having soiled linen bags available to linen using departments.
Equipment and Supplies
1. Soiled linen will be collected in carts supplied by the laundry. These carts are to be used for
soiled linen collection only and not for the collection of trash or other non linen items.
Measurements
1. Environmental Services will review the number of soiled carts collected on a daily basis. The
number of soiled carts per day should range between 12-15, depending upon patient volume.
2. Environmental Services will review the soil pick up log on a regular basis to determine if soiled
linen is retrieved on a timely basis.
3. Environmental Services will contact the laundry if an insufficient number of carts are available
for soiled linen collection.
4. Materials Management will review the total soiled weight retrieved vs. Clean weight processed
on a regular basis to identify any discrepancies.
Security
1. Soiled linen will be placed in the caged area on the Receiving Dock to prevent access to
unauthorized personnel.
Distribution List
Materials Management Linen Staff
Security Department
ABC Laundry Services
Signature of Materials Management

Nursing Administration
Environmental Services

Date

37

Linen Management Practices

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

Soiled Linen Pounds Received


Clean Linen Pounds Processed
Difference

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

Soil as percentage of Clean Weight

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

e = benchmark Soil Percentage Target

38

February

f=d-e

Potential Loss - Percentage

g=fxb

Potential Loss - Pounds

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

Standard Textile Co, Inc., Linen Management Consultants frequently share


their expertise when teaching at the American Laundry and Linen College,
sponsored by NAILM, at Eastern Kentucky University. STC instructors
share their budgeting, consumption, and product knowledge with linen
and laundry managers from across the country. To find out more about
these classes, contact Standard Textile Co, Inc., at 1-800-999-0400.

39

Linen Management Practices

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.

The two basic types of measurements are based on:


Productivityhow
Productivity
much labor (or hours) is used to complete a task. This may vary based on the
type of labor includedhourly, salary, or managerial. Typical productivity measurements include:
1. Pounds per Operator Hour (POH)the number of pounds processed divided by the number of
hours used to complete a process.
2. Pieces per Operator Hour
Hourthe number of pieces processed divided by the number of hours used
to complete a process.
CostThe total or unit cost for an activity. This may be expressed as a total cost or cost per activity.
Typical measurements include:
1. Cost per Pound
PoundThe total cost (labor, linen purchases, utilities, chemicals, or other costs)
divided by the number of pounds processed. A specific cost per pound (linen replacement,
laundry processing, etc.) can also be used to measure an individual cost over time.
2. Total Cost
CostThe sum of all actual costs necessary to process linen vs. a budgeted or targeted
cost.
Sample calculations which detail how these measurements are determined are included at the end of this
chapter.

41

Linen Management Practices

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

Signature of Materials Management

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

Processing Cost per Pound

0.280

Total Processing Cost

$ 35,603.40

Miscellaneous Charges
Repair & Mending (@$8.00 per hour)

108.00

Reprocessing (650 pounds @ $0.28/lb)

182.00

Surgical Towel Packs 950 @ $1.25/ea)

$ 1,187.50

Total Miscellaneous Charges

$ 1,477.50

TOTAL - ALL CHARGES

$ 37,080.90

Total Clean Pounds Processed


TOTAL COST PER POUND

127,155
$

0.292
43

Linen Management Practices

Linen Processing Costs


Processing suppliers may charge more than one cost per pound to process linen if some items are
more expensive to launder than others. The example below shows how to calculate an overall cost
per pound if the supplier charges varying costs per pound and also provides additional products or
services.
Linen Processing Costs: Multiple Costs/Pound for Linen Processing
Patient Linen Clean Pounds Processed
Patient Linen Processing Charges @$0.25/lb
Surgical Linen Clean Pounds Processed
Surgical Linen Processing Charges @$0.295/lb

Pounds
115,343

Costs
$28,835.75

22,145
$ 6,532.78

Repair/Mending Services: 10.5 hrs. @$8.00/hour


Labels for surgical apparel
Totals
Linen Processing Cost/Pound

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

Clean Linen Pounds Processed (1st Quarter)


Total Labor Cost 1st Quarter (hourly staff only)
Labor Hours (hourly staff only)

d=a/c

Pounds per Operator Hour (hourly staff only)

e=b/c

Cost per Operator Hour (hourly staff only)

Pounds
230,000

Costs
$ 31,500

3,700

3,700

62.2
$

8.51

45

Linen Management Practices

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

YTD Jan - April


Pounds - 411,600
Total $
Cost/lb
divide by
pounds above

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

Total Utilities Costs

$ 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

Total Overhead Costs

$ 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

Annual Utility Equipment Expense


Equipment Name
Exchange Carts
Utility Tubs
Tools
Truck Leases

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

Linen Management Practices

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

Distribution Point: 4th Floor Medical Surgical


Flat Sheet

formula

Total Monthly Usage (pieces)


b = a / 30 days Average Daily Usage
c
Average Activity per Day
d=b/c
Average Daily Pieces per Activity
e = b * 10% Safety Stock (10% of daily usage)
f=b+e
Suggested Daily Stocking Level

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

Supplier RequirementsSuppliers usually have minimum order requirements. These


requirements should be reviewed prior to creating orders.
Lead TimeThere is often a delay before new products can be ordered, received, laundered, and
prepared for use. Understanding the manufacturers and processors lead time requirements, as
well as any time it will take your facility to handle the product, will dictate how far in advance you
must order products. For instance:

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

Total Lead Time


before ready for
use
14 days

51

Linen Management Practices

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%

Safety Stock (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

On Order (receive within 2 weeks)

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

f = physical inventory On Hand Inventory (estimated 4 Par)


g=e-f
h = existing orders
I=g-h
j = supplier cost

52

Purchase Requirements
Cost per Each

6.00

Total Purchase Cost

$ 2,340.00

Dollar Value Increase in Par

6.00

6.00

$ 9,336.00

$ 16,332.00

$ 6,996.00

$ 6,996.00

Chapter SixProcurement

Now we will review each element listed in the procurement example.


1.

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.

Tracking procurement data is a valuable method of finding historicaland potentially futurepurchasing


trends. This information allows managers to purchase proactively from sound data instead of reactively to
crisis situations.

53

Linen Management Practices

Item Specific Replacement Procurement


Our previous example showed how procurement costs will change according to the required par level.
Procurement costs will also vary in accordance with the replacement factor associated with each item.
Below we show an example of expected annual acquisition costs by assigning a replacement percentage to
each item.
formula:

a
Avg. Daily
Usage (1 Par)

Bath Blanket 73X90


Bath Towel
Flat Sheet 66X118
Patient Gown

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)

Bath Blanket 73X90


Bath Towel
Flat Sheet 66X118
Patient Gown

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

Tex Tip: The Domino


Effect

The Domino Effect

It is common for facilities to face budget reductions every year. To meet


these aggressive goals, most managers reduce the two most "controllable"
expenseslabor and new linen purchases. If these reductions are too severe,
a chain reaction can develop, resulting in a crisis situation for manager and
users, as shown below.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Linen distribution or in house laundry staff is reduced.


New linen replacement budget is reduced.
Fewer replacement purchases result in lower inventory levels since
items that were lost, thrown out, or worn out are not replaced.
Lower inventory levels result in increased labor requirements to
deliver several times per day instead of during scheduled routes.
Lower inventory levels increase the possibility of "stock outs"not
enough product to fill user's requirements.
Product quality and life span is reduced by excessive processing.
Stock outs and decreased quality reduce user's level of trust in
linen availability.
To increase their level of trust, user's start to "take control" of
linen inventory by hoarding and hiding linen in their department
Stock outs and user complaints may escalate to senior
management, requiring extra attention from administration.
Administration devotes additional time and money to increase
inventory, labor, and user's trust.

55

Linen Management Practices

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.

Equipment & Supplies


1.

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.

All newly received goods are to be locked in the linen storeroom.

Distribution List
Materials Management Linen Staff

Signature of Materials Management

56

Nursing Administration

Date

Chapter SixProcurement

Tex Tip: Before analyzing linen related


costs, answer these questions

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

Linen Management Practices

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%

Safety Stock (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

On Order (receive within 2 weeks)

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

f = physical inventory On Hand Inventory (estimated 4 Par)


g=e-f
h = existing orders
I=g-h
j = supplier cost

58

Purchase Requirements

390

Cost per Each

6.00

Total Purchase Cost

$ 2,340.00

Dollar Value Increase in Par

Chapter SixProcurement

Start Up Inventory Purchases


Purpose
To identify the quantity of goods necessary to support a new product implementation or increase in
stocking levels.

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

Anticipated Product Usage


Sheets per Patient/Procedure
Changes per Patient/Procedure

2
2

1
1

f=d*e

Sheets per Patient/Procedure

=c
=f

Daily Par Level Requirement


Estimated Patients/Procedures
Sheets per Patient/Procedure

16
4

80
1

Estimated Daily Usage

64

80

Safety Stock (10%)

6.4

I=g+h

Total Daily Requirement

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

Cost per Each


Total Purchase Cost

59

Linen Management Practices

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

Minue: 2% Qty discount

5.05

= Cost * (1.0 - 2%)

Net Cost

$ 247.45

= Cost after Discount

Items per Case


Cost per Each

60

listed price including freight

144
$

1.72

= Net Cost / No. of Items

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

Divide By: Annual Clean Pounds Processed


New Linen Cost Per Pound

322,565
2,827,685

0.114

Cost Per UseSingle Item


Purpose
To provide an accurate measurement of the costs associated with a single item over its useful life. Cost per
use is a combination of purchase and processing costs over the expected life of an item. The expected life
can be unique to a facility and represent the actual lifespan and potential for loss.

Calculations
Cost Per UseSingle Item (Flat Sheet)
formula
a
b
c=a/b
d
e
f=d*e
g=c+f

Cost per Use


New Replacement Cost
Expected Life (Washings)
Replacement Cost per Use
Weight per each
Processing Cost/Pound
Processing Cost Per Use
Total cost Per Use

$ 5.25
$ 100.00
$
$

0.05

$
$

0.38
0.43

1.25
0.30

61

Linen Management Practices

Cost Per Use Comparison of Multiple


Items
Purpose
Cost per use is a valuable indicator of cost effectiveness over the life of a specific type of product.
Calculating the cost per use for two or more like items allows a comparison to be made between the true
cost effectiveness of similar items. Cost per use is especially valuable when the volume of products used is
included in the calculations, as shown below.

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

New Replacement Cost


Expected Life (Washings)
Replacement Cost per Use
Weight per each
Processing Cost/Pound
Processing Cost Per Use
Total cost Per Use
Annual Sheets Processed
Average Annual Cost

Cost Per Use


Name Print Flat
Sheet
$6.00
100

Cost Per Use


Kaumograph Sheet
$5.50
75

$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

Cost Per Use


Engineered Sheet
$5.00

$0.33
$0.43
365,000

$163,642

$156,950

Chapter SixProcurement

Annual Apparel Costs


Purpose
To calculate the overall cost of providing and maintaining apparel (lab coats, uniforms). The example
shown below details costs on an annual, per piece basis to show the total cost of providing items to staff
members. Although distribution labor may also be involved in providing lab coats, the labor cost per piece
is typically negligible. This information can be useful when developing an apparel policy or determining
costs to recharge to individual staff or departments.

Calculations
Annual Lab Coat Costs
formula

Description

Costs

Purchase Cost:
a

Purchase Cost per Each

$8.25

Processing Costs:
b

Number of times laundered per week

Weeks per year

d=b*c
e

Average Number of Processings/year


Cost per Processing

2
52
104
$1.25

f=d*e

Annual Processing Cost

$130.00

g=a+f

Annual Cost for New Lab Coat

$138.25

63

Linen Management Practices

Disposable Product Costs


Purpose
To calculate the costs associated with the life of the product, from purchase to disposal. Product costs are
readily available from suppliers, but waste disposal costs must be calculated separately, as shown below.

Calculations
Waste Disposal Costs per Pound
formula
a

Waste Disposal Cost Per Container

Average Weight Per Disposal Container

c=a/b

Average Disposal Cost Per Pound

1,000
5,000

0.20

Disposable Product Costs Per Use: Pillows and Surgical Towels


formula
a
b
c
d=b*c
e=a+d

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

Comparison of Reusable and Disposable


Product Costs Per Use
Purpose
To calculate a cost for similar disposable and a reusable products that allows them to be compared for cost
effectiveness. The cost calculation includes costs that occur over the lifetime of the product, not just the
purchase cost. Labor costs are not included in the examples below since the labor cost associated with the
distribution and use of the product would be insignificant.

Calculations
Costs Per Use: Reusable vs. Disposable Pillows
formula

Reusable Pillow System

Acquisition Cost

Average Lifespan (days)

c=a/b

5.50

365

Acquisition Cost Per Day

2.95
6.0

0.015

Average Length of Stay (days)

e=c*d

Disposable Pillow

6.0

0.492
6.0

Acquisition Cost per Stay

0.090

2.950

Cleaning Labor (15 seconds)

0.035

Weight per Each

0.85

Waste Disposal Cost/Pound

0.20

i=g*h

Waste Disposal Cost/Each

0.170

j=e+f+I

Total Cost Per Patient Stay

0.125

3.120

Costs Per Use: Reusable vs. Disposable Surgical Towels


formula
a

Acquisition Cost

Average Number Lifetime Uses

c=a/b

Disposable Surgical Towel

0.95
50

Purchase Cost per Use

Weight per Each

Waste Disposal Cost/Pound

f=d*e

Waste Disposal Cost/Each

Processing Cost Per Pound

h=d*g

Reusable Surgical Towel

Processing Cost Per Use

i = c + f + h Total Cost per Use

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

Linen Management Practices

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

Required Circulating Inventory

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

Case Pack (items per case from


supplier)

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

Cases Required for Order

Full Cases to be purchased


f =e rounded to whole no. from Supplier (cases rounded
to whole number)
g=d*f

66

Blue
Scrub
Pants

Pieces to be Purchased

Cost Per Each

$ 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

Required Circulating Inventory

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

Full Cases to be purchased from Supplier


(cases rounded to whole number)
Pieces to be Purchased
Purchase Cost

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

Linen Management Practices

Internal Labor vs. Supplier Service Charge


Purpose
To examine the cost of a product or service provided by a supplier vs. the cost of internal staff performing
that activity.

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

Step 2: Calculate Processing Cost Per Pack


Formula -->
Surgery Towels

c=a*b

Weight/Ea
0.21

Processing
Cost/lb
$
0.28

Processing
Cost/Ea
$
0.059

0.095

0.154

Wrapper

0.34

Processing: Total Pack

0.55

0.28

Step 3: Calculate Labor Cost per Pack


Formula -->

a
Hourly Wage
(w/benefits)
$
12.50

Labor: Total Pack

c=a*b

Assembled Labor Cost per


Packs/Hr
Pack
50.00 $
0.250

Step 4: Calculate Overhead Cost per Pack


Formula
a
Annual Facility Overhead
b
c=a/b
d
e=c*d

Cost Per Pack


$ 10,000,000

Facility Square Feet

750,000

Ave Overhead Cost per Square Foot

13.33

OR Pack Room Square Feet

500

Annual OR Pack Room Overhead Costs

Potential Packs Assembled per hour

Hours per year

6,665

50
2,000

h=f*g

Annual Packs Assembled

i=e/h

Overhead Costs Per Pack

100,000
$

0.067

Step 5: Determine Total Cost Per Pack


Acquistion
Processing
Labor
Overhead
Supplies*
Total Cost per Pack

Cost/Pack
$0.598
$0.448
$0.250
$0.067
$0.090
$1.45

*estimated at $.09 per pack


69

Linen Management Practices

Step 7: Calculate Annual Savings


Formula
a
b
c=a-b
d
e=c*d

70

Supplier Cost Per Pack


Internal Cost Per Pack
Savings Per Pack
Packs Per Year
Annual Savings

$1.85
$1.45
$0.40
8900
$3,560.00

Chapter SixProcurement

Measuring New Products & Services


Costs
Purpose
To identify the product, service, and labor costs necessary to make an equipment, product, or service
cost effective. Typically, services may be performed internally at a facility, but a supplier may offer the
same service or product for a charge. These calculations measure when it is cost effective to use a supplier
provided product or service.

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%

*percent reduction needed to be cost effective


71

Linen Management Practices

Measuring New Products & Services


Costs
Calculations
Example: Payback required for Supplier Prepared Linen Exchange Carts
Supplier's cost to prepare exchange carts: $4.50 per cart
To identify if the supplier's rate is cost effective, the current internal labor cost to count and build
exchange carts must be identified. Using the total number of hours to build the total number of
exchange carts will identify the internal cost per cart.
The hourly wage used should include the hourly rate plus benefits. We used a rate of $6.50 per
hour plus 25% benefits ( $6.50 * 125% = $8.13).
Our example below indicates that it would not be cost effective to use the supplier's service:

72

formula

Internal Labor Costs

Exchange Cart FTEs

2.0

Hrs per FTE to Count & Load Card

3.0

c=a*b

Total Hours

6.0

Hourly Wage (with benefits)

8.13

e=c*d

Total Exchange Cart Labor Cost

48.78

No. of Exchange Cards Built/Day

g=e/f

Labor Cost per Exchange Cart

12.0
$

4.07

Chapter SevenPhysical Inventory

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

Linen Management Practices

Physical Inventory Count Guidelines

1. Follow consistent counting procedures. Several recommendations are shown below:


If the facility uses a commercial laundry, Inform them in advance that you will be taking
a physical inventory. They will count the clean linen already processed and the soiled linen
received from the facility the day of the count. If the laundry is onsite, the laundry manager or
other facility staff members will coordinate.
Choose a full staff day and a convenient time for counting. Linen is difficult to count when
in use. Early morning, late evening, or weekends are typically good times for counting. Future
physical inventories should be taken at the same time so the results are comparable. For
instance, inventory counts for an individual department taken on a holiday and on a normal
working day may not be comparable. Avoid shift time changes and times of high activity (i.e.
bed care, patient baths, etc.).
Notify linen using departments in advance. Inform departments what time and day to expect
counting. Encourage them to recirculate linen "stashes" by placing items into soiled linen.
Prepare count sheets in advance. Prepare a master list of all departments that require
counting. Prepare count sheets which list the department name and specific products
distributed to that area.
Gather and remove soiled or excess clean linen. Prior to the inventory count, collect as much
soiled and excess clean linen as possible and send it to the laundry. These items will be counted
after they are processed by the laundry.
Use teams of 2 when counting. As one person physically counts linen, the other writes the
count down. This method can take less time than having one person count and write.
Count all linen that is clean or in use. At each location, count items in the Linen
Department, on exchange carts, storage closets, patient rooms, patient beds, exam rooms,
and other storage areas. Personal items (i.e. scrub apparel) can be calculated by counting the
number of staff members wearing linen or apparel item.
2. Tabulate the results. On each department's count sheet, total the quantity of items counted in
that area. Transfer these numbers to a master count sheet that summarizes all items counted. Make
sure to include all counts made by the laundry. If possible, use a computer software spreadsheet
program to assist you.

74

Chapter SevenPhysical Inventory

Departmental Count Sheet Example: 4 West Medical/Surgical Unit


Item
Flat Sheet
Pillow Case
Draw Sheet

Patient Rooms
44
56
21

Exchange Cart
75
100
50

Other Storage
25
25
15

Total
144
181
86

Memorial Hospital: Physical Inventory Master Count Sheet 12/31/97


Inpatient
Areas

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

counds from last physical inventory

+ New Linen Purchases

quantity injected into system since last physical inventory

- Recorded Discards

quantity of recorded items (usually due to wear or stain) that were removed from
system since last physical inventory

- Ending Inventory

current physical inventory count

= 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

Linen Management Practices

Alternative Physical Inventory Practices


Prior to performing a physical inventory count, review why the count is necessary. As stated previously, if a
count is necessary to determine the financial value of linen, a full inventory count is appropriate. However,
if your goal is to identify high loss items or departments which hoard linen, a partial inventory count may
suffice. There are several alternatives that will provide useful information using less time and labor.
Only count the 10-12 items you most frequently purchase. A facility may spend 70% or more
of their new linen purchase dollars on 10-12 items. Limiting annual or semi-annual physical
inventory counts to these items can be an effective use of time and create valuable information.
Only count the items with the highest value or loss rate. A primary linen management goal is to
protect linen assets. Focus on specific items which increase procurement costs and the departments
which use those items.
Only count high volume linen using departments. Inpatient and high volume outpatient
departments typically consume and store the highest percentage of linen in the facility. Limiting
counts to these areas and eliminating the counts of low volume clinics can reduce the amount of
time and labor devoted to physical inventories. Low volume areas can be periodically observed to
remove excess inventory.
Use Cycle Counts. Counting 2 to 3 high volume items each month takes less time, creates useful
information, creates a linen staff presence with consumers, and provides a regular opportunity
to observe linen utilization practices in each department. The items counted should rotate each
month so all of the high volume are counted throughout the year. For instance:

76

January

sheets, bath towels

July

sheets, bath towels

February

bath blankets, thermal blankets

August

bath blankets, thermal blankets

March

patient gowns, IV gowns

September patient gowns, IV gowns

April

pillow cases, pillows

October

May

incontinent pads, draw sheets

November incontinent pads, draw sheets

June

scrub apparel, surgical towels

December scrub apparel, surgical towels

pillow cases, pillows

Chapter SevenPhysical Inventory

Mysterious Disappearance Costs


Purpose
To calculate the cost of linen which leaves circulating inventory. These items usually are removed from
circulation due to theft, inaccessible storage, or placement in the wrong receptacle (trash container instead
of soiled linen hamper). Typically, items which have mysteriously disappeared from circulating inventory
must be replaced with new linen in order to maintain sufficient inventory levels.

Calculations
formula

Flat
Sheets

Beginning Physical Inventory: 1/1/96

Purchases 1/1/96 - 6/30/96

Rag Out/Removed from Service

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

Ending Physical Inventory: 6/30/96

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

Calculated Ending Inventory

Cost Per Each

5.50

1.75

h=fXg

Mysterious Disappearance Value

$ 19,140

$ 9,564

$ 14,003

$ 55,834

i=f/a

Percent of Beginning Inventory Lost

34.80%

43.72%

64.38%

40.51%

98,540
47.70%

77

Chapter Eight - Action Plans

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

Linen Management Practices

Action Plan Example: Creating a Linen Utilization Tracking System


Project Goal: Create a PC based
linen utilization tracking system.

Target Date

Responsibility

Comments

1. Crate Product Profile

Jan 15th

Linen Supervisor

Need Data from supplier

2. Create Distribution Location


Profile

Jan 30th

Linen Supervisor

Requires linen staff input

3. Install PC in linen room.

Feb 1st

Materials Mgr

4. Create computer database


of products and distribution
locations

Feb 15th

Data Energy Clerk

5. Train staff in usage data


collection

March 1st

Linen Supervisor

6. Monitor staff progress

March 1st - 30th

Linen Supervisor &


Materials Mgr

April 1st

Materials Mgr

Linen Utilization Tracking

7. Review month end reports

Materials Mgr to investigate


existing PC equipment
Materials Mgr. To inquire about
Standard Textiles ControlTex
linen management software

Utilization reports to be reviewed


weekly
Results to be shared with
consumers

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

MM & New Processor

Done (conversion
planned for Aug 4th)

6/3

Linen Supervisor

Done

Establish Par Level requirements


by line item (suggest 7 par)

week of 6/10

Asst. MM; STC Sales


Consultant

Done

Coordinate conversion plan and


dataes with new processor

week of 6/10

MM, Asst. MM, New


Processor

Done

6/24 - 6/25

Asst. MM; STC Sales


Consultant

Date extended to 7/1

week of 6/17

Asst. MM

To be sent out via e-mail

Confirm Product Availability


from Standard Textile

7/5

Asst. MM; STC Sales


Consultant

Open

Perform Product Inservices for


facility staff

8/6

Asst. MM; STC Sales


Consultant

Open

Establish Facility Contact


Names, phone & faxes
Establish Conversion Date
(suggest conversion date of Aug
4th)
Obtain facility usage data

Confirm facility product and


quantity needs
Develop Internal Facility
Communication Plan

80

Chapter Eight - Action Plans

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

Linen Management Practices

Action Plan Example: 90 Day Priorities


Project Goal: Begin the Linen Management Improvement Process by addressing teh following four (4)
areas:

People

Distribution

Products

Train employees in Identify Distribution Begin monitoring


the following areas:
Bottlenecks
consumers

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

Review Soiled linen Conduct weekly


pick up schedule to walk through of
insure circulation
high volume areas

Cross train linen Review current


preparation and
par levels with high
delivery staff
volume users

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

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

Clean Linen Delivery Guidelines Universal/Standard Precautions

Handwashing Technique

Sharps and Infectious Waste


Procedures

Chemical Use, Storage, and Spill


Containment

Fire Safety
Lock Out / Tag Out

Machine Safety

Confined Spaces

Facility mission and Values


Statement

Product and Procedures Training

Employee Awareness
Facility Orientation
Performance Review

Competency Review

Employee Health and Safety


Hepatitis B Vaccination
Appropriate Use and Personal
Protective Equipment (PPE)
(attire, etc.)

Employee Physicals
Reporting Accidents

Life Saving/CPR
Observing Safe Work Practices

83

Linen Management Practices

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

cost per adjusted patient day 10


cost per cart 72
cost per clean pound processed 61
cost per discharge 10
cost per each 10, 53, 60
cost per hour 21
cost per operator hour 45
cost per pack 68, 69
cost per piece 63
cost per pound 9, 10, 41, 43, 61
cost per unit of activity 10
cost per use 51, 61, 62
costs per pound 43
cross contamination 35
COG 2
customers 2, 3, 6, 8, 9, 26, 40
cycle counts 76

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

Linen Management Practices

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

linen exchange carts 72


linen flow model 7
linen management program 23
linen processing costs 44
linen replacement factors 50
linen retrieval policy 37
linen usage 26
linen utilization 2, 13, 18, 26, 76
linen utilization costs 30
linen utilization tracking system 80
loss 6, 29, 32, 53, 61, 73, 75, 76

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

par level 19, 29, 31, 36, 50, 53, 54, 73


patient activity 30, 53
patient care activity 26
patient linen 29
patient transfer 32, 33
patient transfer linen consumption 32
patient volume 1, 24, 37
payback 71, 72
percent reduction required 71
pieces 24
pieces per operator hour 41
pounds 24
pounds per operator hour 41, 45
price vs. value 49
procedures 24, 30
processing 1, 2, 3, 6, 7, 8, 9, 10, 23, 24, 33,
35, 36, 39, 41, 42, 43, 46, 49, 51, 53,
55, 61
processing cost per pack 69
procurement 8, 49, 50, 52, 53, 54, 76
production 39
productivity 41
project status report 80, 81
purchase requirements 53

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

Linen Management Practices

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

International Executive Housekeepers Association, Inc. (IEHA)


1001 Eastwind Dr., Suite 301
Westerville, OH 43081-3361
Phone: 614/895-7166 or 800/200-6342
Fax: 614/895-1248
Internet: www.ieha.org
National Association of Institutional Linen Management (NAILM)
2130 Lexington Road, Suite H
Richmond, KY 40475
Phone: (606) 624-0177
Fax: (606) 624-3580
Website: http://www.nailm.com
Textile Rental Services Association (TRSA)
1130 E. Hallandale Beach Blvd. Suite B,
Hallandale, FL 33009
Phone: (954) 457-7555
Fax: (954) 457-3890
Website: http://www.trsa.org

Index

For Further Reading


1998 Guidelines for Healthcare Linen Service
by Joint Committee on Healthcare Laundry Guidelines
Textile Rental Services Association (TRSA)
1130 E. Hallandale Beach Blvd. Suite B,
Hallandale, FL 33009
Phone: (954) 457-7555
Fax: (954) 457-3890

for Laundry and Linen Personnel


By Raymond B. Otero, Ph.D. and the National Association of
Institutional Linen Management (NAILM)
2130 Lexington Road, Suite H
Richmond, KY 40475
Phone: (606) 624-0177
Fax: (606) 624-3580

AIDS/HIV Guide: An In-Service Program for Laundry and Linen


Personnel
By Raymond B. Otero, Ph.D. and the National Association of
Institutional Linen Management (NAILM)
2130 Lexington Road, Suite H
Richmond, KY 40475
Phone: (606) 624-0177
Fax: (606) 624-3580

Recommended Practice for Central Service


Sterile Storage Inventory Management and Distribution
Section Seven
American Society for Healthcare
Central Service Personnel of the American Hospital Assocation
One North Franklin
Chicago, Illinois 60606
Phone: (312) 422-3880

Analytical Methods for a Textile Laboratory (Third Edition 1984)


Edited by J. William Weaver
American Association of Textile Chemists and Colorists
(AATCC)
One Davis Drive
PO Box 12215
Research Triangle Park, NC 27709-2215
Library of Congress: 84-70596
ISBN 0-9613350-0-9

Selection of Surgical Gowns and Drapes in Health Care Facilities


Association for the Advancement of Medical Instrumentation
3330 Washington Boulevard, Suite 400
Arlington, VA 22201-4598
Phone: (703) 525-4890 or (800) 332-2264
AAMI TIR No. 1-1994

Good hospital practice: Steam sterilization and sterility assurance


Association for the Advancement of Medical Instrumentation
3330 Washington Boulevard, Suite 400
Arlington, VA 22201-4598
Phone: (703) 525-4890 or (800) 332-2264
OR Manager
OR Manager, Inc.
1807 Second Street, Suite 61
Santa Fe, NM 87505-3499
1-800-442-9918
OR Reports
OR Manager, Inc.
1807 Second Street, Suite 61
Santa Fe, NM 87505-3499
1-800-442-9918

Standards, Recommended Practices, & Guidelines 1998


Association of Operating Room Nurses, Inc.
2170 South Parker Rd, Suite 300
Denver, CO 80231-5711
Phone: (303) 755-6300 or (800) 755-2676
Sterilization Technology for the Health Care Facility, Second
Edition
Edited by Marimargaret Reichert and Jack H. Young
Aspen Publishers, Inc., Gaithersburg, Maryland
1-800-234-1660
ISBN: 0-8342-0373-1
Textile Laundering Technology (1990)
by Charles L. Riggs, Ph.D. and Joseph C. Sherrill, Ph.D.
Textile Rental Services Association (TRSA)
1130 E. Hallandale Beach Blvd. Suite B,
Hallandale, FL 33009
Phone: (954) 457-7555
Fax: (954) 457-3890

Procedures for Infection Control Practices: An In-Service Program


Textiles, 5th Edition (1979)
by Norma Hollen, Jane Saddler and Ann Langford
ISBN 0-02-356130-0 (Hardbound)
ISBN 0-02-978790-4 (International Edition)

91

ISBN 0-9663708-1-3
00099637-11/04

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