National Clothesline

very drycleaner I talk to is having a great deal of trouble finding qualified employees. What a dilemma! The economy is getting better, the GDP is growing, corporate profits are up and unemployment remains at a very high 6 percent.

Why is it so hard to find good people?

The reason people are not flocking to your company looking for work is that most of today’s unemployed are from the “indulged” white/pink collar environment. They previously worked in neat and clean air-conditioned offices. They worked for “prestigious” companies and had glamorous titles. The other people in the unemployment lines worked in manufacturing and were making over $18 per hour.

Thus, even with 6 percent unemployment, it is difficult to find qualified people. So what is a drycleaner to do?

You have two choices. You can work harder by starting earlier and staying later, or you can make your operations more efficient. A more efficient operation allows for fewer people working fewer hours while producing the same volume.

Sounds good but can it be achieved in this industry without new technology?

For the answer to that question let’s look at a couple of companies in other industries to see how they became more efficient with what they had.

In a Wall Street Journal article entitled Rust-Belt Factory Lifts Productivity, Timothy Aeppel reported on the Westinghouse Air Brake plant located on the south side of Chicago. This plant produces air brakes for trains, trucks and buses.

In 1991 the company introduced the Japanese approach of processing known as “kaizen” which means “continuous improvement.” Today, this plant produces 10 times more per day than it did eight years ago. The company’s Chairman and CEO, William E. Kassling said that “most of the changes in the plant involved no investment in equipment, but simply rearrangement of existing machines.”

The rearranging and process improvements weren’t made by an outside engineering firm. They were made by the “…managers and workers. The managers and workers pick apart each step of each operation and work on how to streamline production.”

The point is that the people who do the work on a daily basis know more about improving methods and procedures than anyone else.

Every time I go to a plant and get the key production people involved in developing methods and procedures for improving efficiency they always respond in a very positive way. My experience is that the average drycleaning plant is operating at 70 percent to 75 percent efficiency. This means that they have one extra person for every four people on the payroll.

Another company in another industry is Consolidated Diesel, which was formed in 1980 as a joint venture between Cummins Engine Co. and J.I. Case Corp. In an issue of Fast Company magazine an article entitled Powered By the People by Curtis Sittenfeld states “There is nothing novel about the plant’s assembly line.”

He goes on to say that the company “…poses a deceptively simple question: will granting people an extraordinary level of responsibility allow them to achieve an extraordinary level of performance?”

After 20 years, the same answer keeps coming back: YES.

Jim Lyons, General Manager of Consolidated Diesel states: “In the right environment, people at all levels of an organization can make contributions. The people who are closest to the work are the ones who typically understand that work best.”

This company uses a team-based system. The writer goes on to say “Researchers found that when people have a say in determining how they work, they are both more satisfied and more productive.”

The company’s Human Resources Director puts it this way: “Being part of a team creates a different sense of accountability. Everybody expects more from everybody else.”

The article continues “…Consolidated Diesel listens to its employees and involves them in designing solutions to problems in the plant. In the fall of 1998, for example, customer demand was so high that the assembly and process teams had to work huge amounts of overtime. ‘We added a third shift skeleton crew, but there was only incremental improvement.’ says Lyons. ‘Then we got our team leaders involved, and they asked their teams how should we handle this?’

“The teams designed new schedules that allowed for more flexibility. Shifts suddenly decreased in length from nine or ten hours to eight hours — and no one was working Saturdays anymore. ‘Sometimes the fact that it’s the teams’ plan, and not a plan dictated by management, means everything.’ Lyons says. ‘The teams will make it work’.”

The big question is: How does a small drycleaning company go about creating teams? Furthermore, how do you get these teams to work more efficiently?

Start with your drycleaning department. Typically, that consists of your drycleaner-spotter, pressers, and IAB (inspect, assemble & bag). Your drycleaning department should cost you between 16 percent and 20 percent of drycleaning sales.

It is very important to note that drycleaning labor as a percentage of drycleaning sales is a function of three things:

1. Selling price.

2. Wages paid.

3. Productivity (number of pieces produced per hour at each operation).

Also, it is very important to keep in mind that these percentages reflect quality work — the type of quality your mother would be proud to wear.

To calculate your drycleaning labor costs as a percentage of sales, take total DC wages for last week and divide it by total drycleaning incoming sales for last week.

If the answer is greater than .20, then there is room for improvement in your plant.

Please do not waste your time trying to calculate how many minutes it takes to process a piece — that is a real exercise in futility!

If your drycleaning labor costs are greater than .20 you must determine where the inefficiency is.

On average, your drycleaner-spotter should process 70 pieces per hour; finishers 30 to 32 pieces per hour per operator; and, at IAB you should process 65 pieces per hour per operator.

If your employees are not producing at these levels you must meet with them as a group. Explain to them what the company goals are. Ask them for their help. Most importantly, you must reward them when they reach the goals.

Case study

The situation. Recently, I did a business survey for a cleaner who was processing 3,100 pieces of drycleaning per week with four drycleaning pressers.

The pressers were averaging just over 20 pieces per hour and they worked 38 hours a week on average. The pressers were being paid $8 per hour.

The solution. I designed an incentive plan for the drycleaning pressers that would give each presser $1.50 per hour bonus when the pressers (as a team) averaged 30 pieces per hour per presser.

As a result of this incentive plan, the company now has three pressers, averaging 30 pieces per hour per presser, 35 hours per week, and earning $9.50 per hour. These three pressers are working fewer hours, making more money per week, the quality has improved, and the company is saving money.

The lesson. The bottom line is that your employees’ productivity should meet or exceed the industry standards in terms of the quality and quantity of work being processed.

When achievable goals are set and an incentive program that is equitable to the company and to the employees is installed — you have a win, win, win! The company wins by saving money. The customers win with improved quality. The employees win with higher weekly earnings.

In the game of business the more you know the better you can play the game.

Alan Robson is a private consultant dealing with the specialized needs of the drycleaning industry. Contact him by telephone at (941) 408-8819 or send e-mail to him at: alan@bizbuilderonline.com or visit the Biz Builder web site: www.bizbuilderonline.com.