KPIs for Commercial Laundries | Western State Design

Tracking a commercial laundry’s key performance indicators (KPIs), including operational costs, maintenance metrics, and output quality, records invaluable efficiency and waste data. Laundry owners who set business goals and monitor progress via concrete metrics can more easily reach their objectives with less guesswork and time.

KPIs in the laundry industry measure various performance data points to illustrate operational, machine, and operator costs and efficiencies. In other words, benchmarking and monitoring performance metrics highlight issues that cost a laundry service money or hamper its growth.

The exact tracking points vary by the workspace, machines, and services, but to be effective, all metrics should be relevant, quantifiable, and closely related to the company’s goals. If you’re discovering inefficiencies but aren’t sure which KPIs to track or why, consult Western State Design, one of the top commercial laundry equipment suppliers. Our specialists understand large-scale linen processing and which metrics matter for improved laundry efficiency and growth.

Key Commercial Laundry Metrics to Track

While today’s commercial laundry equipment ROI is high due to high-tech features and energy efficient operation, the machine stats aren’t the only metrics that matter. A business owner who ignores big-picture operational costs, workflow issues, and other sources of waste jeopardizes the laundry’s success.

There are numerous ways to measure and illustrate commercial laundry KPIs on overall operations, specific machines or processes, and even operators. Follow along below to see laundry performance metrics for basic categories: revenue, operational costs, maintenance, linen quality, and customer satisfaction.

Revenue Sources

While it’s standard for laundries to track overall revenue, this broad metric won’t tell stakeholders much about specific performance areas. Instead, businesses should track revenue by service type, clients’ industries, average order value, and other metrics to refine revenue sources in detail.

Revenue source reports provide an overview of your laundry’s financial health. They also offer detailed insights into services and order sizes, providing valuable information for optimizing pricing, identifying growth and marketing opportunities, and understanding customers’ long-term value.

Operational Costs & Efficiencies

Energy usage, utilities, payroll, and other recurring costs take a significant portion of a commercial laundry’s operational budget. Improving laundry efficiency by analyzing KPIs related to these costs can help you manage overall expenses and reduce waste. Commercial laundry metrics related to operational costs and efficiencies include:

Pounds per Operator Hour: Measuring labor productivity can help determine optimal staffing levels.
Machine Utilization Rate: Tracks machine efficiency and downtime by measuring the actual run time against the available machine time; this can identify workflow issues and commercial laundry equipment ROI.
Utility Cost Per Hour or Pound: Tracking water, electricity, and gas used per hour of operation or per pound of laundry can help identify usage rates and waste.
Chemical Cost per Pound: Tracking the chemical costs can identify where dosing systems may need optimizing to reduce waste, improve environmental impacts, and increase effectiveness.
Load Turnaround Time: Measure the time it takes from receiving laundry to finalizing the order for pickup or delivery.

Maintenance Metrics

Reliable equipment and quality maintenance are key to uninterrupted laundry operations. Measuring repair-related delays and scheduled downtime can identify maintenance issues impacting the business. Reduce downtime or extend machine life to achieve a higher commercial laundry equipment ROI by analyzing these metrics:

Machine Downtime: Measures the time that machines are out of service for maintenance or repairs; this can be split into scheduled and unscheduled to separate proactive and reactive maintenance and identify issues.
Repair Backlog: Tracking items and issues in the maintenance request queue can illustrate if equipment age, replacement part availability, or lack of training are causing the backlog and whether professional laundry service and repair can make maintenance goals a reality
Preventive Maintenance Compliance: Monitoring your business’ compliance with commercial laundry preventative maintenance and identifying servicing frequency can tell you if your team is proactive enough to prevent unexpected breaks and protect the life of the machines.

Quality & Cleanliness

High rewash rates and low-quality output increase energy usage and waste chemicals, water, and time. When linens don’t meet customers’ expectations, the business can suffer due to dissatisfaction and poor reviews. Some quality-related metrics to track laundry standards include:

Rewash Rates: Comparing the number of rewashes against the total loads processed can tell you whether you may need to evaluate chemical dosing, machine programming, or operator training.
Damage/Loss Rates: The percentage of linens lost or unaccounted for can identify whether laundering methods or management needs fine-tuning; lowering loss and replacement rates can improve customer satisfaction and reduce linen costs.
Customer Complaints: Tracking customer complaints about damaged linens, poor or slow service, and low-quality washes can identify the size of the problem and the impact it may have on your bottom line; encouraging customer feedback as you make adjustments can help you measure the efficacy of your initiatives.

Satisfaction & Retention Rates

While you might think your business is satisfactory, you could be mistaken if you don’t track and quantify customer-focused metrics. These commercial laundry KPIs substantiate issues and turnover to help you see the full picture:

Customer Retention Rates: Measuring customer retention rates can identify if gyms, salons, or other businesses are taking their laundry elsewhere due to poor service options, delayed deliveries, pricing, or quality.
Net Promoter Score & Reviews: Monitoring public perception through a Net Promoter Score (NPS) management tool can provide insight into customer loyalty and whether businesses you service are actively promoting or urging people to go elsewhere; reviews on industry directory sites can provide insights into customer ratings.
Employee Turnover Rates: High staff turnover may indicate that your setup needs a second look to make it more ergonomic, safe, or efficient; taking action as soon as staff turnover rates increase can correct issues early to avoid costly, time-consuming onboarding processes that can affect quality and customer satisfaction.

Tips for Selecting Commercial Laundry KPIs

The laundry industry has numerous performance metrics, but the same stats won’t work for every business. A coin-op laundry and commercial laundry won’t rely on the same KPIs, and the same is true when comparing a commercial and industrial operation. Every business defines and measures progress differently.

Since there’s no definitive list of commercial laundry KPIs, you’ll want to know how to select relevant data points for your business:

Define Business Goals

Name your short and long-term business goals, for instance, improving laundry efficiency, business profitability, customer satisfaction, and employee retention. Once you clearly understand your goals, you can select KPIs to illustrate progress towards meeting them.

Choose Measurable, Actionable KPIs

Laundry owners must select the right performance metric to track progress toward a goal effectively. Using the ‘SMART’ framework to evaluate commercial laundry KPIs ensures the metrics you select support your objectives.

Specific: Is your KPI detailed and clear? “Improving wash efficiencies” isn’t specific, but “improving wash efficiencies by 20% this year” is.
Measurable: KPIs should be quantifiable to establish an exact definition of success. Assign measurements, such as dollar amounts, percentages, or raw numbers (linen losses, processing times, or satisfaction rates) to every goal.
Achievable: Naming goals that are too ambitious and unobtainable can introduce challenges that can lead to burnout; set realistic expectations and include milestones if you need extra motivation for long-term goals.
Relevant: The KPI data you track should align with the business objective; rather than tracking water usage overall, consider measuring water waste to target specific efficiency goals, for example.
Time-Bound: Give each goal a time limit and measure progress at that stage to keep the business on track.

Reevaluate & Adjust

You shouldn’t set KPIs and forget about them. Your business goals and priorities may evolve, and when they do, you need to adjust which commercial laundry metrics you track. If you need a partner for your improvement journey, consider a laundry distributor like Western State Design. Our specialists help start-up laundries and established brands set up goal-tracking systems and reevaluate their operations, from layout planning to increasing commercial laundry equipment ROI.

Contact Western State Design to learn more about tracking commercial laundry KPIs. Our industry experts can recommend adjustments to fine-tune equipment selection, maintenance, and workflows to help your business reach its performance goals.