1. Michigan Medicine Transition to Cooperative Laundry
Final Presentation
December 5, 2017
IOE 481 Team 3
Jake Biegger
Ceyda Bolukbasi
Filmore Walker IV
Dr. Mark Van Oyen, IOE 481 Faculty Instructor
Ms. Mary Duck, UMHS IOE 481 Liaison
17F3-Final Presentation

2. Introduction & Background
UM operates its own laundry system
Operation will transition to a COOP in 18 – 24 months
Future state improvement opportunities
Transportation
Storage
Delivery
Benchmark analysis
18 – 24 months
UM laundry facility Ann Arbor, MI
COOP laundry facility Detroit, MI

3. Changes in Current vs. Future State
Transport dirty laundry from hospitals to facility
Clean laundry
Deliver clean laundry
Distribute laundry in hospitals
Transport dirty laundry from hospitals to depot
Transport dirty laundry to COOP
Clean laundry
Transport clean laundry to depot
Deliver clean laundry
Distribute laundry in Hospitals

4. Key Issues 1. 2.
Shift to the COOP will alter laundry process by removing the production aspect
New COOP allows for opportunity for distribution and delivery redesigns 3. 4.
Total number of unique linen items too high to conform with the COOP capabilities
Necessary locations and size of storage depot unknown

5. Goals & Objectives
To determine most effective way to transition to COOP:
Analyze the current transportation, distribution, and storage processes
Benchmark other COOPs and hospitals for comparison
Assess potential service impacts to Michigan Medicine
Resulting recommendations:
Process improvements for future state
Best system for storage and transportation
Potential benefits and risks with transition to COOP
Timeline for implementation of recommendations

6. Scope In Scope Out of Scope
Distribution and delivery steps of laundry process
5 main UM hospitals
Benchmark Analysis
Measurements:
Overall linen usage
Projected future demand
In-house deliveries
Production aspect of delivery process
Offsite locations
Ambulatory care unit (ACU) deliveries

7. Internal Linen Distribution Benchmarking Literature Search
External Laundry Delivery Process
Internal Linen Distribution
Benchmarking
Literature Search
Methods and Data Collection
Findings and Conclusions
Recommendations

8. External Laundry Delivery Process
Observation and Interviews
Historical Data
Observed 3 deliveries over 5 hours
Number of robos delivered
Recorded truck utilization
Performed Time studies
Route Time
Total Delivery Time
Item quantity per robo
Year-to-Date Data
Driver Logs
Daily Laundry Delivered to each hospital
October 17, 2017
October 17, 2017

9. Observation and Interviews
Internal Linen Distribution Operations
Observation and Interviews
Time Studies
Observed two 4-hr hospital shifts
Shadowed various hospital workers on routes
Interviewed workers on current process
Received data about inventory shortages
Created form for workers to self-collect times to:
Pack cart
Walk from holding room to first clean room
Unload linen in clean rooms
Count inventory needs
Walk from last clean room to holding room
Redistribute unused linen
October 19, 2017
November 20 & 28, 2017

10. Benchmarking Analysis
Literature Research:
Advantages of using a COOP
General standards
Common methods used
Functional Benchmarking:
3 major COOPs
MI Premier Laundry (MPL)
West MI Shared Laundry
North Grand River Cooperative
2 hospitals in Michigan
St. Joseph Mercy Health System
St. John Providence
14 hospitals from prior benchmarking analysis
Benchmarking
Literature
Research
On-site Visit
Data Analysis: Analyze advantages and potential service impacts with switch to COOP
Determine a possible work flow after the transition by analyzing existing working operations
On-site hospital visit:
U of M Hospital
St. Joseph Mercy Health System in Ann Arbor

11. Internal Linen Distribution Benchmarking Literature Search
External Laundry Delivery Process
Internal Linen Distribution
Benchmarking
Literature Search
Methods and Data Collection
Findings and Conclusions
Recommendations

12. Historical Daily Demand
*Demands are in number of robos of laundry
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct UH
48.0
44.8
43.8
45.6
47.6
43.4
45.3
45.8
48.2 CW
21.4
18.2
20.4
20.5
20.0
19.8
20.6
21.2
Total
69.4
63.0
65.2
66.0
68.1
63.4
65.1
66.4
68.0
66.8

13. Forecasting – Holt’s Method
Parameters
Level Equation
Trend Equation
Forecast Equation

14. Long Term Demand Increase (5+ years)
Forecast Findings
2017 Avg
(Robos)
Dec-19
% Increase
25% Increase UH
45.8
48.2
5.2%
57.3 CW
20.4
22.6
10.7%
25.5
Total
66.2
70.8
6.9%
82.8
Long Term Demand Increase (5+ years)

15. Simulation Design Stat Fit Weekday daily demand of laundry
5 most demanded laundry items
“Other” - remaining laundry items
Full Robos
Truck
Entities
Robo Capacity Demand Factor
Truck Capacity
Macros
Demand is met
COOP container size and truck capacity
Incr/Decr to capacity is consistent over all items
Assumptions

16. Deliveries greatly exceed Scenario 1
Simulation Findings
Scenario 1 2 3 4 5
Demand_Factor
1.00
1.07
1.25
Robo_Capacity_Factor
0.80
Truck_Capacity
18.00
22.00
UH Deliveries
3.00
3.05
3.15
3.40
3.45
CW Deliveries
1.65
1.75
1.85
UH Containers
44.70
45.70
57.55
53.80
66.90
CW Containers
20.20
25.50
23.90
29.80
Scenario 1 2 3 4 5
Demand_Factor
1.07
1.25
Robo_Capacity_Factor
0.8
Truck_Capacity 18 22
1: Baseline (current state)
2/3: Forecasted increase with current robos/COOP containers
4/5: Long Term increase with current robos/COOP containers

17. Parameters Needed for Schedule
Simulation Findings
Scenario 6 7 8
Demand_Factor
1.25
1.07
Robo_Capacity_Factor
1.15
1.00
0.85
Truck_Capacity
18.00
22.00
UH Deliveries
3.00
2.95
CW Deliveries
1.65
1.60
UH Containers
44.70
53.80
CW Containers
20.20
23.90
In order to maintain current delivery schedule of 3 deliveries to UH and 2 to CW

18. Distribution Current State Process
Laundry leaves laundry facility
Laundry arrives at unloading docks (UHS / CS Mott)
Laundry unloaded from truck by driver and hospital workers
Laundry placed in respective holding rooms
Stock keeper walks to each clean room
Stock keeper counts and records inventory levels
Stock keeper walks back to holding room
Stock keeper picks necessary inventory in holding room
Return to collect more inventory
Stock keeper wheels laundry to clean rooms
Most employees neglect this aspect
Shortage
Linen left after distribution? No
Return cart
Stock keeper distributes laundry accordingly
Yes
Return inventory to shelves in stock keeper room
Return cart

19. Current State Process Time Breakdown
Total Process Time: minutes
Improvement focus
Pack Cart
Walk to First Clean Room
Unload Linen at Clean Room
Count Inventory
Walk back to Holding Room
Restock Unused Linen

20. Opportunities for Improvement
No standard work
Lack of technology

21. Benchmarking Analysis
Received responses from:
Michigan Premier Laundry (MPL)
North Grand River Cooperative (NGRC)
University of Wisconsin Health
University of Washington
St. Joseph Mercy Health System - Ann Arbor
Visited St. Joseph Mercy Health System on-site
Determined changes needed to make the transition move more smoothly in terms of the type of technological aids to use, safety stock presence, actions to take in emergency laundry needs, number of unique items to process

22. Biggest advantages of COOPs
Benchmarking COOPs
Michigan Premier Laundry (MPL)  Administrative Manager
23 million pounds/ year
100-mile radius
Utilizes Linen Master
Limited delivery interruptions
Process Cycle
Processing
Delivering
Picking up soil laundry
Purchasing
-Standard linen list
-Unique items are processed at a higher rate
MPL controls hospital inventory -> hospitals have no safety stock
Laundry amount processed: 23,000,000 pounds annually
Proximity to customers: 100 mile radius
Responsibilities: purchasing, laundering, delivering, picking up soil laundry, and then repeats the whole process.
Delivery Schedule: The COOP which runs only one shift with two start times, delivers laundry once to main hospitals from Monday till Friday. MPL does not store processed linen and keeps its dock area empty to hold carts. Since its drivers are constantly traveling and delivering orders, they did not have the need to dedicate a space for storage in their facility.
Number of items:  MPL has a standard linen list used by all hospitals being served. However, all unique linen items owned by the hospitals can be laundered in their facility but at a higher rate. Keeping the items processed limited helps them to stay within their pound limitations due to their facility’s capacity.
No safety stock: The COOP is responsible from controlling the inventory of hospitals, therefore their customers do not own safety stocks and did not have the need to utilize barcode system to track their laundry item limits.
No extreme case delays - little to no interruption: The scheduling interruptions due to extreme cases are negligible.
Software aids: MPL utilizes LinenMaster for their operations
COOP benefit: sees cost savings in linen purchases, utility and labor as the main benefits for hospitals using a COOP.
-Monday - Friday
-No storage for processed linen (keeps dock empty to hold carts)
Biggest advantages of COOPs
“Cost savings in linen purchases, lower utility and labor costs”

23. Biggest advantages of COOPs
Benchmarking COOPs
North Grand River Cooperative (NGRC)  General Manager
9 million pounds/ year
45-mile radius
Utilizes Linen Master
Emergency action plan – 30 min
-Set start times for each route
-Multiple deliveries per day, M-W-F deliveries, call-in orders
-Largest deliveries scheduled for first runs
-Stores linen on-site
Linen processing
Linen distribution through exchange carts or as bulk
COOP has trucks that make one stop deliveries, up to 15 stops daily
***add number of items related info***
Contact: General Manager
Laundry amount processed: 9 million pounds annually
No of customers: serves 9 hospitals and has 151 delivery points in total
Proximity to customers: 45 mile radius
Responsibilities: NGRC has two facilities, one where all processing of linens takes place and another where all distribution of linen to customers takes place. They deliver laundry with exchange carts to some customers and as bulk to others.
Although NGRC has set start times for each delivery route, each day is routed as if every possible delivery that could be made will be made and is adjusted based on actual needs. All of the large hospital that NGRC is working with utilize exchange carts which are built and shipped to them.
Delivery Schedule: Delivery schedules vary by delivery point and customers range from multiple deliveries daily to Monday-Wednesday-Friday deliveries to once-a-week deliveries to call in orders. The COOP has trucks that make one stop deliveries, with up to 15 stops daily.
Pooled linen system: All NGRC facilities are part of a pooled linen system. As such, they regularly have a hour supply of circulating inventory on-hand whereas the rest of the laundry is kept at the laundry facility. A pooled COOP system operates in a all in first out endeavor, meaning NGRC does not necessarily value where the linen came from. Rather, once it is processed, whoever is the next order in the schedule to be filled is where the linen goes. The laundry processing operation has a standardized method and is not customized for different hospitals.
Number of items: NGRC has very few unique items due to the nature of pooled system which aims to simplify item quantities to allow for better productivity flow, better acquisition costs, better plant productivity and the resulting lower cost of operations. NGRC currently has fewer than 10 items in their system that would be considered non-pooled or unique items. The COOP aims to ensure that they satisfy the 98% of utilization and not buy a product for every perceived customer need. The number of items processed is decided by NGRC’s Operations Committee that routinely meets to discuss new prospective items, and how current items are utilized. This committee conducts due diligence and forwards recommendations to the Board of Directors for final decisions. Having less items in COOP operations is essential. Fewer items allows for better acquisition costs, easier to place orders (time), better plant flow, better productivity, and lower costs.
No safety stock:
No extreme case delays- little to no interruption: The laundry operations, like any other plant process involving delivery to customers, can be affected due to extreme uncontrollable cases. Due to weather, NGRC sometimes has delays in 30-minute window for all deliveries. To alleviate these problems, the COOP schedules their largest delivery facilities for their first runs daily. In cases of emergency customer laundry needs, NGRC has enough linen on-site to get through any normal emergency. Also, in more extreme emergency cases, they have an emergency action plan.
Software aids: To move all their operations smoothly, NGRC utilizes LinenMaster for all linen programs and invoicing.
COOP benefit: NGRC views lower costs as the biggest benefit for hospitals to use a COOP instead of managing their own laundry since hospitals end up getting discounts for economy of scale purchasing, shared replacement cost for equipment and facility needs.
Pooled Linen System:
hr supply of circulating inventory on-hand
-All in first out
-Standardized method, not customized for different hospitals
Biggest advantages of COOPs
“Lower costs is the biggest benefit…can get discounts for economy of scale purchasing, shared replacement cost for equipment and facility needs”

24. Benchmarking Hospitals
University of Wisconsin Health  Director of Materials Management
University of Washington  Program Operations Manager
14 million pounds/ year
Less than 10 miles away
5,000 square footage storage
Utilizes PeopleSoft
COOP : Madison United Healthcare Linen (MUHL)  has 130 SKU (stock keeping units)  utilizes LinenMaster
Delivery Schedule: more than 5 times per day (6 am till 3:30 pm)
14.3 million pounds/ year
Less than 10 miles away
Minimal safety stock (2-3 days)
Biggest issue: Space
COOP : UW Consolidated Laundry  has 200 unique linen items
Software: LinenMaster, LinenHelper, and Spindle for production & Bigfoot for maintenance
Delivery Schedule: 4:30 am till 5 pm

25. Benchmarking Hospitals
St. Joseph Mercy  Interim Manager of Hospital Transportation and Linen Service
4 million pounds/ year
40-50 mile radius
No safety stock
Robots (AGV) and air chutes
-Delivered via 2 trucks daily, each having 22 wired carts
-Hospital’s 2 trucks = overnight storage
-Dead linen issue (unusable vs. soiled)
-Elevator design
-Packer responsibilities
-No item counting
-past: Yellow Dog inventory software

26. Internal Linen Distribution Benchmarking Literature Search
External Laundry Delivery Process
Internal Linen Distribution
Benchmarking
Literature Search
Methods and Data Collection
Findings and Conclusions
Recommendations

27. External Delivery Process
7% Forecasted Increase
25% Long Term Increase
Safety Stock
(Clean Laundry)
1 day
71 robos
663 ft2
83 robos
774 ft2
Minimum Capacity
3 days
213 robos
1988 ft2
249 robos
2324 ft2
 Maintain Current Delivery Schedule
Container Capacity
(Relative to Robo) 
1.00 
0.85 
1.15 
 Truck Capacity
18 
22 

28. Internal Future State Process Flow
Laundry leaves laundry facility
Laundry arrives at unloading docks (UHS / CS Mott)
Laundry unloaded from truck by driver and hospital workers
Laundry is placed in respective holding rooms
Single employee measures inventory level with scanner
Information displayed on computer in distribution room
Stock keeper picks necessary inventory in stock room
Stock keeper wheels laundry to hospital sections
Standardized process
Eliminates need for each worker to count inventory each trip
½ as many trips during a given process cycle
Majority of workers will use scanners less
Team-based system
Inventory left after distribution?
Stock keeper distributes laundry accordingly No
Return cart

29. Future State Model Inputs
Inputs
Times Referenced from Data
Average Time to Pack Cart (min)
27.40
Average Walk Time to First Clean Room (min)
7.21
Time to Unload Linen at Clean Room (min)
20.36
Time to Count Inventory (min)
9.40
Walk Back to Holding Room (min)
8.50
Time to Restock Unused Linen (min)
0.38
Future State Time Multipliers (Based on time savings assumptions) Ex: 1 = no change, 0.9 = 10% reduction per trip
1.00
0.00
General Employee Data
Number of Employees
13.00
Round Trips Each Employees Makes per Day
6.00
Number of Trips Multiplier
Current State (Designed)
1.50
Curent State (Actual)
Future State
0.75
Future State Preliminary Counting
Number of Employees Scanning
3.00
Number of Round Trips Scanned per Employee
26.00
Avg. Time to Scan per Round Trip
9.00

30. Future State Model Outputs
Current State (Designed): Associated with current state process flow
Current State (Actual): Based on observation details
Future State: Based on manipulating inputs
Outputs
Current State (Designed)
Current State (Actual)
Future State
Time to Pack Cart
27.40
Time to First Clean Room
10.82
7.21
5.41
Time to Unload Linen at Clean Room
20.36
Time to Count Inventory
9.40
0.00
Time to Walk back to Holding Room
12.75
8.50
6.38
Time to restock unused linen
0.38
Total Process Time per Trip
80.73
73.26
59.54
Future State Scanning Time -
702
Time To Deliver Linen per Shift (hrs.)
Total Time to Deliver Linen (per Day)
Total Number of Trips
117 78 62
% Reduction in Total Process Time per Trip
9.26%
26.24%
% Reduction in Number Time to Deliver Linen
15.09%
% Reduction in Total Number of Trips
33.33%
47.44%

31. Future State Process Iterations
Same Time Frame
Varied Time Frame
Implemented within next months
No major change to shifts
Time reduction: 6.13 hrs. / day
Less total trips, no counting linen, no restocking unused linen
Implemented after change to COOP
Major time shift change (nighttime)
Time reduction: hrs. / day
Less total trips, no counting linen, no restocking unused linen, less congestion

32. Additional Improvement Measures
Minor Changes
Major Changes
Prepare institutional guidelines to prevent “dead linen”
Training (unusable - soil linen distinction)
Have minimal in-hospital safety stock
Deliver more than the daily linen need to account for urgent daily laundry needs without needing a separate storage space
Implement other ways to count linen:
RFIDs – no need to be in line- of-sight as opposed to barcodes
Weighting shelves
Re-define tasks (packers, counters)
Integrate automation - Robots
More extensive software options
LinenMaster, Spindle for production
Bigfoot for maintenance
Improvement Measures with Minor Changes
Linen costs range from 20 to 40 percent of the total cost of a hospital laundry and linen services. As estimated 80 percent of the linen replaced is attributed to linen misuse and wear out [10]. As observed from the team’s on-site visit to St. Joseph Mercy Health Services, one of the main contributing factors for increase in cost is the number of “dead linen” items. Hospital staff usually ends up categorizing unusable torn linen items as “soil linen” which causes the COOP in use to over-charge the hospitals. Therefore, once the transition to the COOP is completed, Michigan Medicine should implement a series of training sessions to inform both stock keepers and nurses of the differences between unusable versus soil linen items. In common storage room, clean rooms, and soil item rooms on each floor, an additional disposal bag could be placed just for separating torn unusable items so that they won’t be charged. To ease the transition period of this structural change, the Laundry Services could place instructions and steps to distinguish one type from the other next to the newly added disposal bins.
In addition, the team observed that not having a separate safety stock storage was a common strategy for the hospitals contacted which are currently using COOPs. Therefore, the team decided that instead of dedicating a space in the hospital for safety stock granted Michigan Medicine has already limited linen storage space at the hospital, it is more feasible and efficient to develop COOP delivery schedule by requiring deliveries to have excess linen items than the daily need so that the hospital can account for urgent daily laundry needs without the need of a separate storage space.

33. After COOP is implemented
Timeline
Immediate
Within next 18 – 24 months
After COOP is implemented
Determine technological capability of handheld scanners
Implement Future State Variation #1
Determine size of container that will replace robo
Construct depot based on safety stock preference
Develop COOP delivery schedule considering minimal needs
Implement Future State Variation #2
Implement training program to distinguish between unusable vs. soiled linen
Integrate weighted shelves to ease counting process
Utilize software to aid with production and maintenance
Implement RFID and robots

34. Expected Impact 1.
Understanding of the changes that will occur between the current state and future COOP model 2.
An optimal system for transportation, storage, and distribution 3.
Service impacts associated with the transition to COOP 4.
Feasible timeline for transition to COOP

35. Thank you! Questions?