Ep2: Evolution Of Technology In The Laundry Industry: Part 2 with Becky Hughes

FULL TRANSCRIPT: 

Eric: Welcome to Laundry Talks. I'm your host, Eric Smith. Today's topic is part two of "How Things Used to Be in Textile Rental in the Office and on the Route." As I mentioned in part one, we've been doing a lot of spring cleaning at Alliant recently. Some of the things that I found in the back of our closets were lots of multi-part forms, dot matrix printers, and related printer cables.

It got me thinking about how things used to be for most textile rental operators. Many of our customers have been in business for two, three, and even four generations. During most of that time, invoicing was a very manual task. Even the most advanced operators were still printing their invoices on multi-part forms, which really drove everything in the business. Once those forms were used and then filed, they had to be retrieved from a big wall of filing cabinets that almost every textile rental facility had somewhere in their offices.

Today's podcast is going to be a trip down memory lane. We'll talk a little bit about some of the pains that textile rental operators had to go through in the past and then talk about how some of those pains have been solved through technology, training, and best practices.

For part two, I'm proud to introduce my guest, someone I'm proud to call a good friend. I've known her for now at least 20 years, through most of her professional life. She is now the president of Hughes Customat, a locally owned company in the St. Louis area. Welcome, Becky Hughes.

This is the podcast 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.

Becky: First of all, thanks for having me. You and I, yes, we do go way back, more than 20 years. And as we discussed earlier, our companies go back even further. That's true, I remember that. For the people that don't know, I attended the TRSA EMI (Executive Management Institute) program. We were in the same class together. It was a joy to get to know you and learn about a new Metro company. We had already worked together but I didn't know you very well. I just enjoyed working with you and it's always a pleasure to see you. So, thank you for taking time today.

And oh, thank you for having me. When you first met me, I was two years in and primarily just working with customers. So, I didn't have a whole lot of overall knowledge yet.

Eric: Before we talk a little bit about what you're doing on the route, let's talk a little bit about Hughes Customat. Tell me a little bit about the company, the market you serve, your product mix, and your specialty.

Becky: As I think we might have mentioned before, we're a second-generation company founded by my father, Gene Hughes, in 1974. We are really excited to be celebrating our 50th anniversary next year in 2024. Congratulations! Yes, we're proud of that. We really are a service company. Our industry is known as a mat-only operator and "mat only" meaning we don't launder uniforms, we don't launder hospitality or medical linen. We are a mat service company. However, we do offer towels, microfiber towels, shop towels, wet mops, dust mops, air freshener service, restroom paper, and restroom soap, and we also have a few other items as well.

Eric: A quick question, if you don't mind. I'm always very curious to see how the industry has kind of stepped into the facility services area more and more in recent years. Do you mind sharing what your experience is on the facility services side, and maybe what type of percentage of your business that market represents?

Becky: It's a small portion. We have some very strong direct-sale paper companies in the St. Louis area that are already serving a lot of our customer base, to whom we would normally market the paper. So it's not a ton, but it is significant. It's more of a convenience to the customer than anything else. However, we do a lot of air freshener service business, especially in hospitals and large office buildings. We have a major financial institution headquartered here, and they receive air fresheners in every single restroom and every single one of their buildings.

Eric: Wow! So, what's the biggest install? Just for people that understand that business, but for those who don't, you're renting a dispenser device and then providing the refills for them. Do they manage the refills themselves or do you actually place them in there?

Becky: No, we actually replace the cartridge. We do everything so they should never have to think about it.

Eric: Gotcha, okay. So, I'm just going to ask: what's the largest number of refreshers at a single location that you service?

Becky: I don't know the largest number, but I do know that we have some buildings with well over a hundred refreshers. 

Eric: I didn't even have this as something to talk about, but now that you've brought it up, I have a question. How does the route service rep remember all the locations in the facility to go to?

Becky: Well, our Alliant software does that. Okay, because I know some people do that for large mat customers that have 50 or 70 mats at a single location. There are some new tools that allow them to see where each item is placed as they make their rounds.

Eric: I didn't know if you were using that, but I'm even happier now to find out that you're already utilizing that.

Becky: That's right, we've been utilizing that for a long time. The route reps know exactly where everything goes, and they pop up on the ticket when they're supposed to, so they know when they're going to be delivering them. We have a very streamlined process for that. In some cases, you might have a customer that you go to every week, but the air freshener refills may occur every two weeks, four weeks, or so on a different cycle.

 Eric: Okay, another question I've got, again it doesn't really have to do with the full topic at hand, but are you invoicing for those air fresheners only as you deliver them, or are you billing a small piece of that every week?

Becky: Well, we do it in a few different ways. We figure out the cost pretty much on a per-week basis, but most of our customers are on what we call our Monthly Billing System. This means that the customer receives just one invoice per month following the first delivery of each calendar month. This allows the customer to pay the same amount each month throughout the year. It may change seasonally, but they know what their invoice is going to be.

During the months when they would have an extra delivery, which occurs two times a year, they're not paying for an additional service that month, making their costs higher for two random months through the year. So the way that works is we figure out how much it is per delivery, times how many times we are there per year. We can do that for air fresheners based on a week, and I would say probably 65 to 70 percent of our customers do use the Monthly Billing System.

Eric: Okay, let's shift over. Since we're kind of talking about invoicing, let's shift and talk a little bit about your use of the mobile app. I remember when you installed that and we worked for a while to make that happen together. Can you maybe describe what you were doing before you put handhelds on the route and what your processes were like prior to that?

Becky: Well, we had the standard old-fashioned methods as you guys discussed in episode one: dot matrix printers and multi-part forms. In fact, I have a-page-two right here of a multi-part form from 1997.

Eric: How many parts was that? A two-part form?

Becky: That was a two-part form. Okay, and we printed about 39,000 invoices per year. Many of those invoices were multi-page, so I have no idea how many pages we actually printed on forms throughout the year. But, there was the dot matrix printer. It would take our office a good part of the morning to settle the routes for the next day.

Settling a route would mean making any changes, and letting the bill go through. The customer already had a copy of the invoice, but the adjustments needed to be made in the system, and that all had to be done manually.

Eric: Let me ask you a question. First of all, 39,000 invoice forms sound like a large number. It is a large number, but it's actually not that big of a number for some of our other clients using it. I mean, those invoice forms, they add up. I don't know if you even know how much you were spending on those forms. I can tell you that seven to eight cents was not an uncommon number per form.

Becky: and that sounds about right!

Eric: So, a lot of money was spent on those forms. Those forms then took on their own life because I assume they came back into the office and lived somewhere.

Becky: Yes, in fact, we still have some that we're hanging onto from right before we switched over. We'll probably be saying goodbye to those soon.

Eric: One of the other questions I had was about having to make some post-delivery adjustments on the form or carry those adjustments into the computer system. So, before you switched to handhelds, were your route service reps making some adjustments on the route?

Becky: Well, what they would do is deliver to the customer. If a customer wanted to remove something or requested something new, they would make a note. They knew what codes to use and what to write, but they weren't making any changes. That wouldn't happen until the next day in the office.

Eric: So, this is kind of interesting. What I always noticed was that there were two types of operators. Both were good systems, but in one situation like you're describing, the route reps weren't really making adjustments in the field. What you would do was basically move the invoice adjustment process back into the office. All those adjustments were still occurring, just after the fact, through a series of specials or credit memos.

Becky: For labor, it was more labor-intensive.

Eric:  Other people allowed those adjustments to occur on the route, and then they would just have to be checked in the office. Sometimes those adjustments weren't done correctly, so a lot of time was either spent by the office to make those adjustments or to reconcile those adjustments.

So, what happened when you transitioned to the handheld devices?

Becky: Well, before the handheld devices, one thing we maybe didn't make clear earlier was that when routes were settled, they had to go page by page. So, for every single stop, the office had to look at each one and go page by page, whether there were changes to it or not.

The handhelds have been transformative. It changed everything very quickly. Had we known how great things would be, we would have done it sooner. That was over eight years ago, at the beginning of 2015, when we switched over.

The biggest change was that instead of having a clunky clipboard to carry everywhere, they had an Android device. It's a big phone, but it's a phone. All their invoices are on that phone; customers sign on that phone. We provide them with styluses and marketing pens that have styluses on them, so they're never without a stylus if they don't want their fingers touching their screen.

The thing is, they can now make changes on their handheld. We don't transmit directly from the route when a change is made. Those actually do come back to our office, and they are downloaded the next day. They are given the once-over by our service manager before any permanent changes are made.

Eric: Right, so anything that might impact the future invoice, like a request for an increase, goes through an approval process. That's correct.

So, just quickly, if we talk about some of the net benefits or pains that got resolved in the plant or in the office, what has been the impact of the elimination of some of that manual work?

Becky: Well, several things have changed. Along with not having as much paper and not having to deal with the dot matrix printer, we also used to send out 700 to a thousand statements every month. That was yet another form and required postage.

Eric: So, in addition to emailing the electronically signed invoices, you're now doing the same thing with the statements.

Becky: Yes, we send out less than 20 statements by mail every month and we have about 2,000 customers that we service on a regular or intermittent basis. So, between direct sales and everything else, we probably service about 2,000 customers every single month.

Eric: I'm no mathematician, but I know what mailing 2,000 pieces with a 50-some-odd cent stamp adds up to. That's almost as significant as some of the other paper savings associated with using handhelds.

What do your customers think of it? Do they prefer not having manual invoices?

Becky: Well, the customers love it. When we had paper invoices, they would get left behind with the customer. Our route service rep would hand that to the customer to be signed. Then, it would go into the receptionist's basket or whoever was signing the ticket, and it might take a few days, weeks, who knows how long, to actually get to the point where their people would process and submit for payment. This meant that it would take a lot longer for us to receive payment.

Now, we can email the invoice to anyone in the organization, so a lot of times, we have one going to our direct contact, but we also have one being emailed directly to their payables department. This saves a lot of days and has really decreased our time in getting paid by our customers.

Eric: Yes, that's something that's quite common today. In today's world, the person who signs for the delivery at the point of delivery is rarely the one who's going to actually release the payment back to you. So, the ability to deliver the invoice electronically, and to the right person or persons, has been a huge change for operators in the industry.

Becky: I have something else to add to that as well. We do a lot of business with commercial real estate and many property managers of office buildings. Often, our customer isn't even on-site; there is no one in that building permanently. So, we don't have anybody available to sign the ticket. Therefore, how do they know we were actually there?

Well, each delivery ticket has a time and date stamp on it. If there's ever a question as to whether our route service people were in the building or had serviced the mats, we can always look in our system to see what time they were there. If there's nobody there, they generally sign the tickets themselves. So, we know that's the route person's signature, but when were they there? Well, we've got a date stamp and we also have GPS to back that up if needed.

Eric: That's a nice point. It's not an uncommon scenario with those types of customers. Sometimes, you have customers for whom you do a drop-off at 4 a.m. when no one's there. Some people will use a combination where they'll have the customer initially sign a form that says, "Hey, it's okay, I authorize you to drop this off without me physically signing for it." But then, they allow the route service rep to sign so they can capture that information and provide that data on their invoice in real-time. That's wonderful.

Becky: Yes, and you asked about the customer reception. They absolutely love it, primarily because they don't have to deal with a lot of paper. We worked at a trade show a few weeks ago and received multiple comments on how much easier our invoices are to read compared to some of our competitors. That's one of the benefits of using an industry-specific software program.

Eric: I saw that on LinkedIn when you had your Earth Day series of posts, one of which was about paper savings and moving to electronic invoices. That certainly made me smile when I saw it, and I appreciate that.

I'm wondering because you've been using the mobile app for eight years now, is that correct? Yes, time does go quickly. I'm curious, what would you say to people who are still using manual paper invoices? What would you tell them if they were considering making that switch?

Becky: First of all, it's not as difficult or as costly as you might think, especially because the handhelds are on our company cell phone plan. To give you an idea, when we first started with the handhelds, our cell phone bill each month from one of the major carriers was about twelve hundred dollars. We had, I think, a total of 14 lines. That might have included more than just our routes. It included cell phones and some iPads and other tablets. It might have been more than 14. But our bill every month was about twelve hundred dollars for all of that, plus whatever we had to pay upfront for the actual devices.

Now, things work a little bit differently and the upgrades work differently, but our monthly bill now is about 500 to 540 dollars every month and we have more lines. So, in eight years, our cost for the cell phone service has been cut in half and I believe we have more lines now than we've ever had.

Eric: That's fabulous. One question I had for you is about operators who have gone completely paperless. Occasionally, you might have customers who say they'd still like you to bring them a printed copy of their invoice. I'm curious, what percentage of customers still ask you to deliver a paper delivery ticket? And do you honor that request?

Becky: We do honor that request. If that's what they want, our service reps can carry a copy with them. They know who needs a paper copy. If customers want one, they can have one. If they want their statement mailed, we will still mail their statement. But as I mentioned earlier, we mail out less than 20 statements a month. I would imagine that probably fewer than 20 customers actually ask for a paper invoice. So, it's a very small number.

We are a small company, a small family business. As I said, we're not like one of the larger uniform or linen operators. Even some of our local competitors, who we're very friendly with, are much larger than we are. This is mainly because we are a mat-only operation.

Eric: One of the things we have done is create a return on investment spreadsheet. Operators can plug in their own numbers, such as how much they pay for an invoice form and how much they're paying hourly for route and service and office personnel. Just add a few variables and it'll automatically create a payback analysis on the fly for them. Anyone who wants to is certainly welcome to run those numbers and get their own downloadable version of that.

So, one of the things I wanted to ask you, Becky, is what do you see as some of your key challenges as the president of your company? What keeps you up at night?

Becky: The same thing that keeps any business owner or person up at night right now is inflation. It's a really big issue because, as we all know, the cost of everything has increased exponentially, especially in the last two years. This is affecting us everywhere from our cost of goods, to the cost of new equipment, equipment repair, and equipment parts.

We need some new trucks, and a new truck is twice what it was 10 years ago. The gasoline prices are high and there's been an increase in wages. Granted, we definitely want to pay our loyal employees more. However, for some jobs, we have here, the wage that we have to pay has gone up more than 30 percent just in the last two years.

Inflation is a big thing. Healthcare costs are another big issue. We're facing probably another 10 percent increase and we do pay for most of our employees' health care; they pay very little.

Eric: I do have a couple of final questions for you that aren't related to handhelds or textile rentals. Over the past few years, I've watched a lot of good shows. Can you recommend a good show that I need to binge right now?

Becky: I'm generally late to the party when it comes to binge-watching shows. I actually just started Yellowstone, which most people have already finished watching. I did just finish the final season of The Marvelous Mrs. Maisel, which I think is fantastic. Hacks is also really good.

Eric: So, if I needed to narrow it down to one of those three, which one should I watch next?

Becky: If you like period humor, I would recommend The Marvelous Mrs. Maisel. I thought it was wonderfully done.

Eric: Well, okay, that's awesome. Hey guys, thanks for joining us for today's podcast. I hope you enjoyed it. We've got a great resource that you can use if you're interested in learning how to streamline your routes. We've put together an ROI calculator that requires just a few pieces of information about your operation and will run the numbers to 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'. You'll find a blog recap of every podcast and a link to that calculator.