Several of my recent articles have discussed the industry disrupters along with
who continue to test new business models for this industry.
Why is it useful to focus on these unproven and sometimes even untried
This is an industry in a state of
transition. No denying it. Drycleaning
pieces are falling. Competition in
areas of growing population is still
increasing. Marketing is in a whole
new world. Recent headlines have
even claimed that the industry is
With this state of affairs, change is
inevitable. It also means that with
new, out-of-industry competitors, new priorities from our youngest customers,
and even new
and growing product lines, the historical standard operating methods and
procedures may no
longer be valid or may, at the very least, lose their degree of importance that
we have relied
upon for so long.
Historical best practices
There are some well established and very successful “best practices” used in this industry.
They are tried and true. Managing to these best practices has allowed us to meet
operational benchmarks which ultimately translate to strong profit performance.
There are established best practices for building route sales, managing daily
scheduling counter staff, direct mail promotions, and even paying claims. These
are based on established and proven systems and procedures, but what was once
evolved and moved on. Relying solely on old benchmarks is dangerous to profits
and is proving
to be non-competitive.
One current example is drycleaning productivity. Generally, it is measured by
operator hour, with hours, in this example including the cleaner, spotter,
presser, inspector and
The benchmark, in the not so recent past, used to be ten to 12 pieces per
operator hour (total
drycleaning pieces processed divided by total hours worked). It leapt to 16 and
then it moved to
18. Now it exceeds 22 pieces per operator hour.
For those operators still relying on an old industry standard of 16 pieces per
hour, they are
found to be less profitable than their competitors and feeling price pressures
in the marketplace
to maintain historical profitability.
The installation of new technology along with changes in the garment mix has
achievable standard without compromising quality. Operators who have recognized
opportunities and reinvested in their business have also reaped the rewards in
lower labor costs,
which becomes even more critical today where good employees are hard to find and
expensive than ever.
As the industry continues to move in new directions, additional benchmarks may
their validity. Historically, piece count increases, on same store sales, were
expected to be a
minimum of three percent with annual price increases of three percent providing
revenue growth of six percent.
Wow! Where did that go?
Now we see achievable goals very differently. One wedding dress at $600 is the
100 pairs of pants at $6 per piece. So, on a very simple level, piece count may
have fallen by
100 times, but revenue remains the same. Not all bad, and it displays the danger
overly concerned with piece count growth. Today, it is much more about revenue
What happens when I add wash-and-fold as a significant product line? I may have
a lot of
socks and no drycleaning. Tracking total pieces looks very impressive, but my
revenue per piece
has been cut in half. Is that bad? Not necessarily if I have doubled my
productivity and lowered
my operating costs compared to the drycleaning process.
At the end of the day, profitability may be very similar.
Today, the expanding closet approach is fast becoming a new standard. Everything
out of the home including the household, the bed linens, the washing and the
new benchmark to track, focus on and manage to is now about revenue per person
household, not revenue per piece. Our point of sale systems will have to expand
to accommodate our growing diversity.
Productivity was always measured with two separate product lines — drycleaning and shirts.
Laundry was considered “miscellaneous” and labor was often borrowed from other departments.
As this product line grows, it deserves it’s own management, tracking, recording and
ultimately the establishment of standards based on the types of equipment
available along with
the packaging and movement methodology being utilized. With this approach its
continue to improve.
Managing to best practices has been very good for this industry. Understanding
approaches that consistently deliver results is, in many ways, what has enabled
the best in the
industry to grow and flourish during the past 30 years.
When an effective approach, based on an established set of best practices, is
enables scale, predictability, and consistency. If we figure out the right way
to do something in
a particular situation, it should work again in a similar store, route or plant.
However, retaining historical best practices while the industry is reinvesting
itself is a recipe for failure. Being so worried about a loss in piece count
that forces discounting
rather than growth in new areas may foretell future failure.
There are new and evolving standards, nearly by the day. There are the beginning
benchmarks for social media marketing results, for wash-dry-fold production
standards, and for
customer service staffing.
Those operators who have constantly moved their benchmarks to higher levels as
opportunities arise are well equipped to build new ones, modify the old ones and
Be alert, be aware, continue to question everything today about your business.
nothing is stagnant. See the evolution and embrace it. Plan to move forward