Episode 1: Evolution of Technology in the Laundry Industry with Guest Barry Smith

FULL TRANSCRIPT: 

Eric: Hey guys, before we get started with today's podcast, we've done something really special. We've created an ROI calculator. If you're interested in learning how you can streamline your route operations, we have a few data points that you can enter and create a customized calculator to see how much time and money you can save by deploying handhelds on your routes. There will be a link at the bottom of the podcast if you're watching, and if you're listening, you can go to alliantsystems.com, click on the resources button, and choose the Laundry Talks podcast. Every podcast we do will have a recap, and you can find that information in those links there. Thanks, enjoy!

This podcast is for the textile rental operator community to learn new things, share ideas, and drive conversations. Welcome to Laundry Talks with your host, Eric Smith. This episode is brought to you by Alliant Systems.

Welcome to Laundry Talks! I'm your host, Eric Smith. I'm glad you could join us today. I wanted today's podcast to be a trip down memory lane, remembering some of the pains that textile rental operators had to go through in the past. We'll talk about how operators have solved many of those issues through technology, best practices, and training.

I've been with Alliant for a long time, but a lot of this stuff even predates me, so I'm going to need to use my "phone a friend" lifeline today to get some answers. Our first guest is an industry veteran who started working at a textile rental company in Lincoln, Nebraska, in the late 1960s. He was a supplier in our industry for nearly 40 years, developing laundry-specific software solutions like route accounting and garment tracking systems. He was also a pioneer in the early uses of garment identification and sorting. Today, he's still working on some new labeling technologies for the industry. For all these reasons, I'm happy to have him as my very first guest on Laundry Talks to pick his brain, and he happens to be my father, Barry Smith. Welcome, Dad! How are you doing?

Barry: Hey, thanks, Eric. I'm very honored to be the first guest. That puts a lot of pressure on me to make this thing successful, I guess.

Eric: Okay, well, I'll hold you to that.

Barry: When you talk about going back to the late '60s, which is actually '67, it's hard to guarantee that what I remember is correct and certainly not complete. But I do have some impressions. I got into the industry really kind of as a short-term thing because I wanted to learn about computers. I had just completed a graduate degree in business, and in my last term, I had a course in computers and potential, and I decided I wanted to learn about that. So I took this job really to learn about computers and programming and their potential.

When I began at the textile rental company in Lincoln, Nebraska, the owner wanted me to come in and program a computer that he had already ordered from Univac. My response was that I would like to do that, but I had never programmed anything before. He said I could learn, so I had one week of training at the Univac offices on something called RPG (Report Program Generator). Later, we found that RPG wasn't all that useful in some applications, so we went to a very basic machine-level assembler language.

It's not just the route service representatives which we did not have – we had route men at that time. So obviously, there's been a significant change in the last 50 years. We didn't have any women on the plant floor, and it was, as it was then in many industries, a man's world. But when you talk about the route service reps' responsibilities, those were much different. When you talk about the machinery in the plants themselves, that was much different. And then, of course, the computer hardware was incredibly different from what it is now.

Eric: Yeah, let's talk a little bit more about the Univac and the actual hardware that was in place when you arrived.

Barry: It actually wasn't there. I think I came in July, and the machine didn't get delivered until January. In the meantime, we started developing code, or I started developing code because I was the only one doing it at the time. We would use the Univac office to test some of our programming. So when it arrived, it had a central processing unit, a card reader, and a card punch. There was no disk, and there was no tape.

We were punching up literally millions of cards every month because one of the goals was to track usage, which we hadn't been able to do before. So you're updating on the card the usage for the last eight weeks, and it changed every week. That lasted for about a year. This machine wasn't something that would sit on a small desk next to you like a typewriter; it was a room full of equipment, including a card sorter and a keypunch machine.

To describe the scale of what we're talking about, the three pieces of equipment were probably about 36 inches high, kind of like a kitchen cabinet level, and it was L-shaped, with each side being about 10 feet long. It had 8K of memory – not 8GB, but 8K. This wasn't on a raised floor, as it wasn't necessary for that size of the machine. As we grew later, we had a raised floor and some large-scale equipment.

The very first task I was assigned was to work on automating the invoicing using this technology, and packing slips came first. Once we had that going, we moved on to statement processing and then started doing production reports, filling out the menu of things that were wanted. As we moved into a service bureau operation, producing reports for other companies, we added equipment, and of course, the equipment got a lot bigger very quickly. By the time we moved to Dallas in 1970, we had disk drives, so it was a much different thing even just three years later. The change from a percentage standpoint was amazing.

Eric: So you've also told me in the past that one of the key big changes in the industry was back at that time, all the billing was really done after the fact. So when you would make a delivery today, it wouldn't be until the following week that the customer would actually be invoiced. Is that correct for certainly the larger customers?

Barry: Probably the best thing I did is spend a week on the route when I first arrived in Lincoln, and I've drawn on that experience ever since. It was very helpful. They really had three basic customers: they had COD customers for even exchange for continuous roll towels, mops, mats, and then they had route and count customers, and he might bill those out, but usually, that was still done in the office on a delayed basis. And then he had what he called bag customers, which means he just put an accounting slip in each bag with the account name or number on it, and that was counted in the plant. But yeah, everything other than mats and mops, you know, dust items, were basically delayed even exchange, as they call them.

Eric: So eventually, one of the great steps forward was when we got to a point in the industry where we were able to invoice at delivery. That would immediately accelerate the revenue and cash flow for my business, right? And I know that there you've told me in the past that there's a lot of customers that just that one week gain in revenue was worth the change just by doing that.

Barry: Oh yeah, absolutely, it was a big change. One of the things we did early on from a hardware standpoint is there was another plant in Hastings, Nebraska, and then when we moved to, we started doing transmission of data at very early stages in the industry. Nobody else was really doing it, but in 1970, we got our first two outside customers, one was in Abilene, Texas, and one in Little Rock, Arkansas, and we installed something called a KSR-33 teletype machine which we had our customers input all of their data, basically at first just the soil counts, so we would be able to get their documents back to them faster.

That machine was punch tape. I don't know if you've ever seen punch tape, but it would transmit at 10 characters per second. So to get just the soil counts might take 25 or 30 minutes to transmit from Lincoln or from Hastings for Little Rock or Abilene, and then we had to feed that into a tape reader so we could punch cards out so we could put it into the computer.

Wow, so it's pretty primitive, but we thought it was really advanced at the time, which it was.

Eric: Yeah, it was. So out on the route, from just an invoicing perspective, it was just a lot of manual tasks that the route service rep or route man at the time would do, and I think you've even said to me in the past that he wasn't so much of a route service rep but he basically performed a lot of other duties of the office on site.

Barry: Yeah, well, at least at the plant I was in, the route man did everything. He loaded his own truck, which is probably not something people do anymore, and he would gas it up someplace, usually at a customer, and one of his tasks was there were COD customers. A lot of the customers, I'd say 50 percent of the small customers were COD, so he'd come in weekly wanting to get cash or a check to take, and oftentimes, "Well, the manager's not here, he'll be back in 10 minutes," or, you know, so he was not able to get collections all the time.

Well, that in itself was a huge problem when it comes to checking because the unpaid invoices had to be tracked, and he was supposed to collect the next time, and it was fraught with issues and sometimes used by route men as kind of a temporary loan service by collecting from customers but not turning it in. But all of that was done completely manually, as far as the tracking of those unpaid invoices, right?

Right, yeah, and the route service rep was essentially like the route service rep and a bookkeeper to some extent. It's almost like an independent contractor in a sense, and he kind of owned that business. And there were some great ones there. There were some great drivers, and there were some not-so-great drivers. But to really monitor and audit that, there was a layer at the back of the plant as far as supervisory auditing and checking in. It just took a lot of time, up to an hour for a route man to check-in.

Eric: That's pretty common to see that amount of time when we're printing manual invoices—45 minutes to an hour is fairly standard in a manual invoicing system. Just because every adjustment made on the route then has to be checked, audited, and even then replicated back in the office. Sometimes people just make mistakes; they don't add it up properly. Dealing with those discrepancies later always took a lot of time.

Barry: Yeah, they weren't generally hired for their math skills.

Eric: The beauty of some of the new technology is that you can take these guys with great personalities and excellent customer service skills and let them do their thing out on the route while allowing the technology to take over those tasks that have been problematic in the past. That's been a nice thing to see over the years. I'm kind of curious: how many routes were they running in Lincoln, Nebraska?

Barry: They were probably running 12, I suppose, maybe six or seven in Hastings. What was the mix of the plant in terms of the product mix? It was more linen than uniform, but there was probably 30 percent industrial if you count the mats and mops.

Eric: Once you developed the billing system, what were the key takeaways from prospective customers? People who put the solution in, what was it that really paid for those early computer systems from a return perspective?

Barry: Manpower was much reduced once you had the systems in place, so usually, that meant there was less staff in the office. Better customer relationships occurred because you're not making errors. You can anticipate more of what's needed, as you have the history. As you just mentioned, for the route man, you can pretty much eliminate the majority of the route man's check-in if he's got everything correct to begin with, and he is not personally making a lot of changes or handwriting adjustments or selling stuff on the route.

Eric: And what were the limitations on the data? A lot of the data was stored on punch cards, but what were some of the limitations? How many previous deliveries were you storing? How much information did the punch card have?

Barry: The punch card had 80 columns, so you could have 80, what they call the EBCDIC characters, in other words, the card had 80 columns, but each column could have multiple punches in it, so you could have the entire ASCII code set available to you.

Eric: I imagine there were some heated words sometimes during arguments over what data was going to be stored in the system versus data that was not going to make it onto that card.

Barry: Now you're going back too far; I'm sure we didn't have any discussions.

Eric: But then, how long was it before you moved off the punch cards?

Barry: It was only about a year or so before we got the disk drive, but they were only 1.6 megabytes, and you had to turn them over like they were more like a tape drive because they were like an old phonograph record where you get to the end of the volume, you'd have to flip it over, and that became a problem, especially if we'd find out once in a while that there was an update that spanned the volume. So you were affecting more than one person, so you would flip the volume over only to have it stop again and say, "Oh, I need information on the other side still," right? Do that several times, so that was fun.

Eric: Wow, you were around when some of the very first mobile devices started to pop up in the industry, which were really late '90s, early 2000s. I think one of the first mass-produced devices used in the industry was a Dell Axim. That was a real game-changer for the industry.

Barry: Yes, we were. I was personally very interested in bringing that technology to Alliant's predecessor company, which I'll point out, Alliant really is the same basic operating company it's been for 50 years. There have been some changes in organization and ownership, but it's really one continuous organization, which is pretty unusual these days. But yeah, I had wanted to have something for some time, and when Dell finally came up with something that could be used, we had a great programming staff there that really ran with that and came up with something several years before UPS was on the route with their devices.

Eric: Yeah, it's normal now for everyone to sign for something somewhere, whether it's delivered to you or you purchase it, and it's just kind of become ubiquitous for everyone. But probably one of the most amazing technology advances in our industry has really helped operators grow. I've seen it allow for the enforcement of business rules out on the route and has just offered up so many benefits for operators.

Barry: So yeah, one other thing: when you ask what the benefits were, surcharges. The route man had no ability back then to surcharge, and then in about '73, when we had a gasoline shortage, suddenly someone had the idea we needed to have a fuel surcharge, and then we had to have some other kind of surcharge, and, you know, there was just a plethora of different surcharges people could come up with, and over the years, it has amounted to a tremendous amount of revenue for the industry. I think there's probably been some overuse of that in some cases, but anyway, it's certainly become a natural thing, and if I look at my electric bill, I see the same thing. It's not just this industry; it's everywhere.

Everybody's figured out, "Oh, we will do surcharges because that's free money." And it's also allowed for the creation of surcharges but the ability to change those as the invoice changes at the point of delivery, regardless of any adjustments made. Some of those calculations would be very difficult to do manually today.

So yeah, cash management, by the way, one of the things we always did was every day, somebody had to take the money to the bank. I bet most people don't do that anymore. Yeah, that's probably true unless fewer people are using COD. You know, more and more people are moving away from COD as they can and just simplifying the billing, moving them to other payment methods including credit card and ACH.

Eric: I am kind of curious, looking back at the late '60s, it'd be hard to maybe envision what some of the technology has become today. I wonder where you see some of the big technology changes if you're looking ahead in the future. I'm sure our listeners would be interested to know if you're a textile rental operator today, what technology should you be thinking about or looking towards in the future?

Barry: Well, I haven't been really active in the industry for 15 years, so I really can't comment on that. But I can tell you that back in 1970, the Lincoln plant, the new plant, was built, and it was revolutionary in that they had one of the first systems where soil was loaded into the 800-pound washers from a second floor through a chute, and prior to building that plant, it was all hand-loaded. But the equipment is very basic; I mean, you had flatwork ironers, sheet and pant press machines, big washers, and you didn't have any wastewater controls, finishing tunnels, continuous washers, or automated sorting systems. So the last time I was at a Clean Show, which was four or five years ago, I mean, the industry is just totally different and has become much more complicated.

Eric: Right, and I would say that as far as I am interested in your thoughts on future technology because you've always been a bit of an early adopter as long as I've known you. While all my friends had the VHS machine, we had the Betamax tapes because you always said that they were of higher quality, and they were, but it was the same thing – a bad choice. But, um, but also, we had, you know, we had a big satellite dish, and you also have solar power at your house today. So, I kind of look at you as a bit of a technology buff, you know, someone who sees where some of the technology is going.

Barry: I appreciate it. I don't know. I guess AI is going to affect everybody in some way. Yeah, it may be Alliant Systems as much as anybody, so for sure, no doubt. But I think some of the things that Alliant has done over the last few years have been revolutionary in terms of anticipating your customers' needs on how they service their customers. You know, it's become really a partnership.

And, uh, certainly, in 1970, having computer software was a nice thing to have but was not a necessity. But now, your information and assistant partner is critical to success, I think. And that may be in-house for large companies, but you know, that's as important as any other aspect in the business.

Eric: Well, thank you. I agree 100% with you. And before we wrap up here, I do have two quick questions for you, or maybe not quick, but two questions for you. One is, what is your sports affiliation, rooting interest? What teams do you root for?

Barry: What sports? Well, I live in Dallas, so Dallas Cowboys are up there this year. The Rangers, Texas Rangers, are doing well, so I've become a fan. I'm a fair-weather fan, but having gone to Kansas, I'm a Jayhawk, and during basketball season, it's a lot of fun.

Eric: There you go, perfect. And then, finally, the final question is, even though I introduced you as spending 40 years in the industry, technically, you're still in the industry. And just wanted to ask, real quickly, what is it that you're doing today? Short answer on what you've been working on for the last 15 years.

Barry: We've been doing barcodes for textiles of all sorts, which include costumes, tuxedos, clean rooms, a lot of clean room and some uniform rental. And we've just expanded our product with a new customer printable label that we think is faster to apply and easier to remove. It's a product we're introducing actually on June 10th in a release from TRSA.

So, we're hoping that that product starts to be a bigger part of our business.

Eric: Perfect. Well, thanks, Dad. I appreciate you joining me and your insights. Hey guys, thanks for joining us for today's podcast. I hope you enjoyed it. We've got a great resource that you can fill out if you're interested in learning how to streamline your routes. We've put together an ROI calculator that just takes a few pieces of information about your operation, and we'll run the numbers and tell you how much money and time you can save every day. Click the link below if you want to go to that webpage. If you're listening, you can go to the alliancesystems.com website, click on resources, then click on Laundry Talks Podcast, and you'll find a blog recap of every podcast and a link to that calculator.