SAN FRANCISCO — The annual American Drycleaner Plant Design Awards always elicit envy and longing in the hearts and minds of dry cleaners everywhere. A shiny new plant is a compelling dream.
Obviously, there are many advantages to a well-planned new plant. Although not comprehensive, this column will examine a list of some of those advantages. There are distinct disadvantages as well, so let’s consider both and then you can apply the decision logic to your specific set of circumstances.
ADVANTAGES OF A NEW PLANT
INCREASED PROFIT THROUGH EFFICIENCY. Efficient layout and improved workflow are real advantages to professional new-plant design. The expense savings that efficiency can achieve will help finance the plant project and increase company profitability as a whole. Don’t underestimate the value of hiring a neutral professional to plan the design with your input. They are trained to optimize efficiency and workflow. They also have no vested interest in the equipment that you purchase to populate the plant.
DESIGNED TO SPECIFICATIONS. Old plants often require “make-do” solutions that accommodate the existing space, whereas new plants designed from the ground up can theoretically allow for “perfect” (at the time) dimensions. Beware of the tendency to keep a plant (new or old) layout the same for long. Business is dynamic and that dynamic status demands that change occurs regularly for optimum results.
IMPROVED LOCATION. Within the financial and zoning constraints, a new plant can provide a better location that offers a combination of improved visibility, access to the marketplace, access to a desirable labor force, lower expenses for utilities and transportation, and many additional advantages that are unique to a given site.
The closer and more visible the plant is to the target market for your product, the higher the customer traffic and motivation to utilize your services and the lower the transportation costs will be. This consideration must be weighed against the cost of occupancy of the usually higher real estate in proximity to the customers. Fast accessibility to main transportation arteries can also offset additional real estate and vehicle expense by reducing the labor factor of the transportation.
Regarding accessibility for the labor force, the drycleaning business always presents the challenge of being near the relatively affluent customer base that can support the service while also being accessible to the relatively non-affluent labor base that can produce and deliver the product. Again, easy access to transportation arteries and public transportation can offset the opposing considerations.
EASIER MAINTENANCE. A new plant that has been designed for ease of maintenance is much easier to keep clean and to maintain the equipment. Installing lint-removing fans and ventilation systems will help tremendously. Positioning equipment so the maintenance panels are easily accessible will reduce the time (and therefore the cost) of maintenance.
Selecting equipment with a strong history of dependability and low maintenance will increase the probability of lower maintenance cost, as long as the preventative maintenance logs and procedures are kept current. And if the equipment is also new, it is easier to keep it clean than to return old equipment to pristine condition. Don’t underestimate the pride of “ownership” factor that applies to owners and operators as well.
Newly painted walls and epoxy floors are easier to keep clean than old surfaces that are likely to be rougher and more absorbent. State-of-the-art lighting makes the plant cleaning (and cleaning processes of the product) easier and more efficient, too.
LOWER COST OF OCCUPANCY. If you have been renting and decide to again rent a new plant, the key to lowering the cost is in the plant selection, including all of the considerations mentioned about market proximity and facility considerations but primarily in the negotiations with the landlord.
If you have weighed all of the costs, loan availability, cost of funds, accessibility of capital, tax implications, increased control and appreciation issues, and determined that the best solution is to own, then the reduced expense of owning is determined by all of those factors as well as the physical plant design considerations.
A financially well designed plant should cost less to occupy (per piece produced) than an old one. Cubic square footage that is efficiently utilized is much less expensive than a low-ceilinged, sprawling footprint. The flexible conveyors that can be configured into towers provide for extremely efficient assembly, bagging, cubic storage and distribution sorting. The same is true of equipment designed for a minimal footprint space.
Open space with minimal supporting walls and posts is much more flexible (and therefore less costly per produced piece) than the same space cut up into small sections by either walls or supports.
DISADVANTAGES OF A NEW PLANT
Compared to the advantages, the list of disadvantages of acquiring a new plant is much shorter, but weighty.
FINANCIAL IMPACT. At least in the short term, there will be a substantial financial outlay to acquire a new plant, whether you choose to own or to rent it. The cost of moving the equipment that will be utilized in the new location, and the cost of replacing what will no longer be used and/or supplementing the current equipment, is quite substantial. This is true regardless of your company size, because it is relative to your volume.
Design costs are a critical aspect of making the plant pay for itself. Extensive permits are necessary, regardless of ownership, as is compliance with new regulations from which you may have been exempt in the old location due to grandfather clauses. Some of these new regulations are anticipated, and some are surprises. A recent example was the requirement of installation of “visually impaired” bumper strips that had to be installed around the building and drive-thru to prevent the disabled from walking into customer traffic. A standard panel of the bright yellow “bumps” (perhaps 2-by-3 feet) cost in excess of $100 each, and a large number of them was required to cover the mandated space.
Even with extensive and detailed cost estimates, experience shows that owners are always surprised by the costs and usually greatly underestimate the financial impact of a move.
DISRUPTION. A plant move is extremely disruptive of operations, if only for the duration of the actual plant move itself.
DIVERSION OF FOCUS. Even without major new projects, running a profitable cleaning company is a full-time job. Adding a major new project, especially one as extensive as a new plant, always requires significant attention, and a new plant project goes on for a relatively long time.
The amount of detail required and the amount of contemplation, planning and input from the owner and managers usually results in slippage in current operations, so beware and plan to avoid the negative impact. This may indicate that a temporary project manager is in order to minimize the operational impact. Momentum in the current operation is probably the reason for the new plant, so the last thing you want (or can afford) is for that momentum to fade.
TENDENCY TO NEGLECT THE CURRENT PLANT. Delaying maintenance on the current plant is often justified because the “new plant is coming online.” This is a fallacy because the new plant, although immediate in your mind, is a future occurrence. Meanwhile, efficiency in the old plant is critical to making a profit and delivering your promise to your customers. Broken or malfunctioning equipment is costly in added labor.
Before making your decision whether you need a new plant to accommodate your growth and other requirements, carefully consider if you can replicate the advantages of a new plant in your current location with strategic and judicious improvements and re-design.