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Top Ten Costs of an OPL
Some or all of these costs may be saved by outsourcing laundry services:
Laundry Production Payroll
Payroll costs for wages paid to hourly employees who handle linen, including laundry production, soiled sort, washroom, flatwork, ironing, tumble dry operation, etc.
Management Payroll
Employees who handle linen inspection; linen control; janitorial services; machinery repairs and maintenance; and internal linen distribution.
Employee Benefits
Includes payment of social security, workers compensation, holidays, one-or-two week vacations, state unemployment (varies), health insurance (varies), union contributions, etc.
Laundry Chemicals
All detergents, alkalis, bleach, sour, fabric softener, bacteriostatic agents, starch, etc.
Maintenance, Repair, and Parts Costs
Includes all machine repair parts, lubricants, drive belts, iron pads and covers, tools, boiler treatment and water softener salt.
Utilities
Gas, electricity, fuel oil and water account for a large part of expenses.
Taxes, Licenses & Permits
Taxes, licenses and operating permits paid by the facility and allocated to laundry
operations.
Equipment Costs
Equipment experiences wear every time it is operated. Replacement costs must be considered.
Insurance / Other Business Expenses
Insurance, lease charges, safety expenses, uniforms, training, and other expenses allocated to the
OPL.
- Lost Opportunity Costs
The space occupied by the laundering equipment could be used to house a revenue-producing facility such as a physical therapy or day care center (adult or child). An existing program or department within the facility also could expand into the available space, such as a new MRI Center, resulting in an increase in revenues from that department. The space could even be leased out to groups of physicians as office space.
Sources: Managerial Financial Management, Phillips & Associates,©1996; Textile Rental Services Association
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