Even though we are faced with an uncertain economy and difficult times lay ahead, most members of our industry are looking for the opportunities that may arise in the coming months – instead of focusing on negatives. Only time will tell how the coming year will unfold, however here are some thoughts from industry members.What do you think 2009 holds in store for our industry?
Thirty years ago, an associate of mine in the uniform rental business taught me not to view a situation as a problem, but look for the opportunity. Yes, the economy is a fear-provoking problem at this time, however there are opportunities that do exist, even now. Those in the industry who reinvent themselves, such as a restaurant that changes their menu and offers lower priced comfort foods, can turn the tables and bring in new customers. Greater volume can make up for lower priced meals. Increasing sales can be achieved with less effort. Those who seek the opportunity presented in reinventing their business and exploring different niche markets will survive the storm. And, those who view the current economic climate as an opportunity to reduce expenses in their operations while seeking ways to create new revenue will also weather the storm. Be positive, pro-active, inventive and take time to recognize and enjoy the good things in your life. Wishing all of you and your families a happy, healthy and prosperous New Year.
2009 is going to be an interesting year, I’m sure. There’s going to be segments of the industry that will do fairly well, specifically healthcare. But then there will be other segments that will do poorly such as uniform and hospitality. I think that business will drop off due to the economy and loss of jobs. I think we are going to have a very mixed year but overall, I think it will be tough. I don’t see a turn around in the economy, but healthcare will grow and be strong. That has to do with demographics though, more than anything else. In the healthcare industry people can’t plan to be sick or not, but people can plan to have a vacation or go out to a restaurant. That disposable income will reflect poorly on the linen and hospitality side of business. Clean ’09 will be interesting. I’m kind of concerned because the economy might make it difficult for people to attend the show. That could be a potential disappointment to the industry. The other side of it is that there will be more pressure on companies to be more environmentally conscious and they will be conserving more water, energy and convert to green chemistry. I can see only increased pressure on the industry to be more of an environmental steward.
VP Research and Development
I think that if hospitals do respond to environmental concerns, then they will be looking for an opportunity to replace throwaways they have with something that’s reusable. And of course, textiles would be one of the major beneficiaries of that movement. I do believe that is an opportunity. But there are two problems that we will need to overcome. First, reusables are labor intensive and second; training people could be a problem. Particularly if it’s sterilized medical devices, employees need to be trained. Then there is the consideration of the capability of hospitals to do that training. But it could be an opportunity for textile rental companies and for the American Linen Association.
Consultant and ARTA founder
I think there are some positive aspects coming up in the next year. The most positive would be that the equipment industry is really stepping out of the box and developing new types and styles of equipment that will increase productivity, increase employee morale and reduce energy costs. Those are positive things. I think with the new President, that there will be new changes that will transpire that will reduce the trade agreement restrictions that currently exist for textiles, equipment and construction. And when that does happen, the lift of restrictions will reduce the overall cost of equipment and textiles, as it exists today, particularly in those markets that are government related.
VP Government Operations
I am very optimistic. I think the industry will turn around. People are being very cautious and I think that will continue between now and the inauguration. The doom and gloom is not as bad as it seems. We do have unemployment – but a lot of that we brought on from greed. I think that industry-wise it’s opening an opportunity for us as Americans to invest in more growth in things that we can do for the world. The world looks to us for development and new technology, and we give it away. Maybe it’s an opportunity for us to recognize where our potential and growth is and not give it away. I think that by the end of the summer we will be in pretty good shape or at least heading in that direction – if we could last that long. There’s always a little glitch – but I am very optimistic about the future.
The hardest hit will be the hospitality and resort industry. There is a “Linen Index” used by Wall Street that tracks the high end linen rental industry. Early indicators are that it will be bad from January through at least May. You will see many restaurants close down. Vegas and other fly in resorts will suffer more. The healthcare laundries are pretty recession proof but they will be tightening up also. High-end capital expenditures will be limited by credit issues. It will be important that operational cost savings be sought and that owners do not allow themselves to fall prey to the unproven scams that will be floating around.
Technical Consulting Co
I think people are going to be holding their breath. Business for us has been steady but people are being cautions. I can see it being flat through the first two quarters of next year. I think that by the third quarter if the President and Congress can make progress, then people will see purse strings loosening up some.
Phoenix Scale Company
It’s important for people who are marketing products to our end users to look for other ideas that can help them because that can generate more sales that may be lost from customers who are not doing any purchasing.
Green is the thing today and tomorrow and it’s not going to go away. We need to look for products that will decrease our carbon footprint. That’s why our company is coming out with a new environmental product in 2009.
In healthcare, business volume is likely to remain strong, but with even more intense competition in a battle among laundries for the steady business. Cost structure will be as important as ever, but the great laundry managers will separate themselves from the ordinary by offering special add-on services that deliver increased value to their hospital, nursing home and other healthcare customers.
In hospitality, the overall strain on the economy is likely to impact hotel stays and dinners out, resulting in a decline in the volume of laundry. Laundries will be challenged to cover their overhead costs with less volume. Pressure to find costs that can be cut throughout the operation will increase while replacing the lost revenue will be a key concern, likely by a combination of selling as many addon services as possible, securing preferred vendor status and establishing long term contracts that ensure a given level of production certainty. Depending on the facilities and equipment, it may be appropriate to consider other markets where volumes are less dependent on the economic cycle.
CEO, Tingue, Brown & Co.
As the Bob Dylan song says, “Times are A-Changin’”. The incoming administration promises to focus on climate change and the environment. Since the EPA was established under Nixon, increasing compliance regulations have been the order of the day. The struggle of companies to meet these regulations has hampered real environmental management to make a significant reduction of their environmental impact. As change begins to move environmental departments from compliance oriented to better management and reduction in the overall footprint, this will certainly be reflected in OSHA and other areas.
Now is a good time for managers to take a serious look at their environmental strategy; to either wait for regulations to come out and attempt to follow them, or to get ahead of the game and manage the process, rather than let the process manage them.
Why be proactive? In this economy businesses are looking for every nickel that can be saved. A sound sustainability management system will not only improve environmental performance, but can provide operational cost savings of 50% or more. Incident reduction translates to risk reduction and will lead to a reduction in insurance premiums. Improved efficiencies in resource management will provide cost savings throughout the facility. And of course there is insulation from fines. Again, to quote Bob Dylan, “You better start swimmin’ or you’ll sink like a stone. For he who gets hurt will be he who has stalled”.
The GreenBridge Council
2009 is shaping up to be a big year for VASKA. Our company, which has always been green, is growing into the Industrial channel, complementing our growth in Institutional laundry in 2008. Our EPA DfE partnership is paramount to our customers for credibility and LEED Certification. Our authenticity and transparency has earned us the respect and support of the green community, as well as prospective customers.
We look forward to helping build a new brand of trustworthiness within the chemical manufacturing business, where clients are assured that they are supporting their communities at the same time as achieving their own objectives.
Founder and CEO
We believe that sales of industrial laundry equipment in 2009 will be substantially below the numbers seen in previous years. The sector which will be the least impacted will be the healthcare sector. By the end of the first quarter, we should know if we are close to the bottom and can expect some improvement by the 4th quarter or if the crisis will continue to linger through 2009.
Vice President - Sales & Marketing
JENSEN USA, INC.
In 2009 the same two issues that face our nation as a whole confront our laundry industry: the economic crisis and the climate crisis. The good news is that by tackling one in our everyday operations, we can often solve the other. Greening your facility by replacing equipment with newer technology can cut your utility costs. For instance, the AD- 464's heat reclamation technology can lower utility costs by recycling heat. Of course now more than ever price matters. Be sure to look for machines with no hidden costs for the configuration you need. At ADC we've tried to incorporate the most sought-after "options" into our standard models. In the end, 2009 will be the year that we as a people come together to change the future. We as an industry have an impact, so let's make it a good one.
With volumes in decline or holding steady in most cases, “big ticket” capital projects intended to boost production capacity are likely to be put on hold. Some organizations have been freezing employee wages and eliminating overtime entirely. The laundry industry had already been asked to do more with less for years and in 2009 the urgency to continue to do so will only intensify in pursuit of savings and efficiency. Laundries that pay attention to proper equipment maintenance will get consistent production from existing machinery with less risk of unplanned downtime.
With a lighter workload, laundries need to consider adjusting their schedules and reducing hours of operation to reduce overhead, especially labor and energy costs. Getting some certainty in their cost structure is also important and laundries that lock in long term energy contracts now while petroleum prices are relatively low can insulate themselves from potential volatility in energy prices. Laundries that focus on quality, cost controls and training are more likely to operate efficiently and keep their existing customers through the downturn. They will also find themselves in a strong position to grow when the “good times” return.
National Sales Manager
Tingue, Brown & Co.
As an environmental company, we certainly are expecting the industry to continue to look at ways to save money as well as conform to the new democratic president's call for our country's push to meet other countries in global warming issues. We expect more and more cities to fall into a budget deficit and when looking for ways to increase revenues they will look to increase water and sewer charges as demand weakens and costs continue to rise.
Municipalities are seeing deterioration in their infrastructure and will look to businesses to help fund the upgrade either through higher rates or through impact fees. There will continue to be more and more areas of the country and worldwide running out of drinkable water and will use higher costs as a deterrent to wasteful practices. We also see them becoming more strict as to what is being discharged to the sewage treatment plants and will look to the largest wastewater discharge companies to clean up their wastewater discharge using lower limits on BOD's, COD's, ph, Suspended solids, and oil and grease amounts and will impose high extra charges when the companies are not in compliance.
Water recycling will become more prevalent in large and small laundries as they look to control their utility bills to compete in this industry and more and more companies look at their internal costs in this 2009 recession.
Aqua Recycle expects continued growth in its business both domestically and internationally as it maintains its dominance in the recycling sector.
There are four factors currently affecting both organizational development strategy and recruiting/hiring activity for laundry plant operations. In no particular order these are credit financing restrictions from lenders curtailing capital requisitions, decrease in revenues due to customers' own diminished revenue stream/financial health, higher unemployment, and the real estate market hindering the relocation prospects of non local management candidates.
In varying degrees these factors can impact the “survival of the fittest” traits exhibited on both sides of the employer / employee relationship. The bottom tier of under performers will step it up just enough to stem off out right termination, the middle tier of long term steady performers will maintain their consistency but with an added level of anxiety, and the top tier representing the overachievers will continue to put themselves first and keep a close eye on potential job options.
Savvy owner operators and senior managers can use this down turn to their advantage, as there will be good talent available, especially for the non – exempt positions of route sales reps, laundry mechanics and office staff. This would be a good time to check the temperature of the over achievers, reassure the steady performers and review the write-ups in the under achievers’ personnel files.
Quick Rinse - News From Around The World
Mission Linen's Two Healthcare Accreditations
SANTA BARBARA, Calif. — Mission Linen Supply has received two healthcare accreditations from Healthcare Laundry Accreditation (HLAC) for their Chino, California and Phoenix, Arizona plants. The first was received in 2009 and the Arizona accreditation was received this year. HLAC inspects and accredits laundries that process healthcare textiles for hospitals, nursing homes, and other healthcare facilities.