Tracking Costs – Dial Down to the Penny
A leading supplier executive interviewed during the Clean Show noted a limited number of breakthrough technologies on the show floor. Instead, he cited a much larger number of “fine enhancements” aimed at improving production-software tracking capabilities and/or efficiency. These improvements will allow laundry managers to continuously monitor and reduce their costs in today’s highly competitive market.
“If you walk around the show, there aren’t that many things that you’d look at and say ‘Wow, that’s different,’” said Keith Ware, vice president of Sales for Lavatec Laundry Technology Inc. “It’s fine enhancements. The future’s going to be the data. The data and the controls, so you can manage the business. Because the pricing doesn’t seem to be going up in processing. So you’re going to have to get more aggressive. You’re going to have to dial down to the penny. If you can’t run more efficiently. They’re going to chew you up.”
For his company’s part, Ware said Lavatec is rolling out an enhanced version of its OSLaundry tracking software. The program was available at the 2015 show in Atlanta, but now has improvements, including a new controller. “It gives the customer … you can be at home, pull up your iPad,” Ware said. “Let’s say I want the tunnel at 25 transfers, minimum. Otherwise, if it doesn’t, I get an alert on my phone. So you could be somewhere else and know that your plant’s performing.”
Interviews with other vendors, including machinery manufacturers like Lavatec as well as software vendors, led to discussions of similar products. One change on the hardware side that’s affected a range of companies is the recent acquisition of E-Tech, an overhead rail manufacturer, by Kannegiesser, a machinery manufacturer. Ware acknowledged that Kannegiesser’s move in April encouraged Lavatec to speed up the rollout of its own Lavarail program in the U.S. market. The company already operates a number of rail systems in the U.S. However, until now it had marketed that service only in Europe. Plans were moved forward in the U.S. as the E-Tech acquisition could open opportunities with companies that may have vendor relationships with companies other than Kannegiesser. “To be honest, the decision was reached that we were starting to slowly prepare to bring it over, but the KannegiesserETECH (merger) kind of pushed that decision up,” Ware said. “Also, we were waiting for the new software. With the new software complete, with the tunnel, the washer, the dryers, the rail ties into that in one nice package.”
While Lavatec has added rail systems for its U.S. customers, it doesn’t intend to expand to manufacturing finishing-side equipment as some rival companies do. Instead it will rely on an agreement announced in November of 2014 with Continental Girbau Inc., which has a full line of ironers and finishing equipment. This allows the two companies to pursue joint bids for new plants and major upgrades. While no partnership is perfect, Ware said the Girbau agreement has exceeded his expectations. “I think it’s worked out better (than expected),” he said, noting that Girbau officials recognized Lavatec with a Partner of the Year award during a program at Caesars Palace the night before the Clean Show opened. “When you’re talking with Seth (Willer, national sales manager for Girbau) he and I are like co-workers, not like two guys working together,” Ware said. “The goal is to sell equipment. Yes, we’re going to step on toes here and there. But if Girbau sells it, or Lavatec sells it, it’s a win for the two sides. It’s been a great partnership.”
Meanwhile, Lavatec is always on the lookout for customers that prefer to select vendors based on individual expertise. In Lavatec’s case, that means wash aisle equipment. “Many laundry operators that are knowledgeable, ‘cherry pick,’” he says, noting that some will want a particular company’s tunnel and dryers or ironers. Vendors that propose to supply all of a company’s needs will portray that fact as a strength, but it may have a downside if they’re stronger in one area than another. Ware adds that on occasion he’ll recommend a competitor’s product, if it’s better suited to a customer’s needs.
Another factor Ware says that operators should consider is the cost of ownership over the 15-20 years after a purchase is made. Lavatec specializes in having fewer parts and is less stringent about original equipment manufacturers’ requirements for certain parts such as motors, than most of its competitors, he said. “Nobody really thinks about that,” Ware said of the long-term costs associated with equipment purchases. “If I bought a tunnel for $1 million and it’s going to cost me say, 5% of the acquisition costs per year for maintenance and so on.” If Lavatec keeps its costs to 2.5-2%, over 20 years that can add up to as much as $1 million dollars, he said.
Watch for additional follow-up coverage of the Clean Show in future issues on Textile Services Weekly.