MERITEX. Keeping Laundry Service Fresh With Dedicated Contract Carriage. Transportation and supply chain solutions for the bottom line

Transcription

1 Reprinted from edge Ryder s business magazine a Ryder System, Inc. publication Transportation and supply chain solutions for the bottom line MERITEX Keeping Laundry Service Fresh With Dedicated Contract Carriage

2 PUTTING A FRESH SPIN ON DEDICATED LAUNDRY SERVICE M E R I T E X

3 The occasional parade, international celebrities and the U.S. Secret Service are enough to snarl the best-planned delivery schedule. For drivers of Meritex LLC, the central laundry for some of the highestprofile hotels in the New York/New Jersey metropolitan area, and their Ryder counterparts, it s all in a day s work. We ve gotten so spoiled that we tend to take the transportation end of our business for granted, says Graham Ward, general manager at Meritex. But when we stand back and really look at the logistics involved, it s truly amazing that we have such a high level of success in meeting our customers requirements. A Dedicated Contract Carriage agreement, complete with on-site transportation and driver management, plays a big role in that success. Headquartered in Piscataway, New Jersey, Meritex is a wholly owned subsidiary of Hilton Hotels, Inc., and represents the first centralized laundry operation for the hotel chain. At 100,000 square feet, the laundry is the largest property in the Hilton family. As the central laundry for a network of 10 Hilton properties, including Manhattan s Waldorf Astoria, Bally s Park Palace in Atlantic City and the New York Hilton, Meritex processes nearly 32 million pounds of linen annually and not once in five years has a hotel guest involuntarily faced the prospect of a second night on the same sheets. At its inception in early 1998, Hilton executives saw the central laundry concept that would come to be known as Meritex as a way to improve service and cut costs. Hotels that had previously relied on in-house At A Glance Challenge Start-up centralized laundry for hotel network needed reliable drivers and hands-on logistics management. Solution A Dedicated Contract Carriage agreement gave Meritex on-site transportation expertise and driver management. Benefits Excellent on-time delivery record and on-site transportation expertise frees Meritex management to focus on the laundry business.

4 At 100,000 square feet, Meritex is the largest property in the Hilton family. The success of the central laundry concept is heavily dependent on a transportation strategy that effectively addresses regulatory requirements, liability issues and driver management. laundry operations could now put that space to work generating revenue. Just as inviting, the managers of these properties would no longer be responsible for the capital costs of purchasing and maintaining the equipment, or the recruitment and administrative expense of maintaining a laundry labor pool. Properties that relied on a third party to handle their laundry needs could now shift that business to Meritex, thereby ensuring more predictable and stable laundry costs all while keeping the profits within the corporate structure. The Hilton executives also understood the critical role transportation would play in the success of the concept. Costs aside, regulatory requirements and liability issues associated with operating fleets and managing drivers loomed as a significant resource concern. We had lots of questions at the beginning, says Ward. Some of the hotels were assigning time slots that even they weren t sure would work, and no one really knew how the logistics were going to come together. How long was it going to take to unload a trailer? How difficult was it going to be to clear a space on the loading dock? What volumes, and fluctuations in volumes, would we have to deal with on a day-to-day basis at each property? We went through the calculations of purchasing or leasing our own fleet and hiring our own drivers, recalls Ward. When we factored in all the regulations prescribed by federal, state and local authorities, it became obvious that we would have had to hire a dedicated transportation manager. Ultimately, we concluded that it was better to focus on what we did best laundry and let a professional focus on the transportation. Ryder simply offered the most attractive package, says Ward. But the real clincher was their willingness to provide an on-site manager. Having someone on site to handle the day-to-day logistics was going to be a tremendous advantage. Ryder simply offered the most attractive package...but the real clincher was their willingness to provide an on-site manager. Having someone on site to handle the day-to-day logistics was going to be a tremendous advantage. Graham P. Ward General Manager, Meritex Meritex LLC launched in 1998 with four tractors, seven drivers and Terry Lane, their one on-site Ryder manager. It s a great comfort to know that we have professionals handling the day-to-day contact with our customers, says Ward. We get great feedback about our drivers great guys who are willing to do whatever it takes to get the shipments on or off the trailers in a timely manner.

5 Ryder s Lane agrees. Once drivers get to the hotels, he says, they often have to contend with congestion at the loading dock as they compete for space with regular food service deliveries, florists, specialty caterers, trade show exhibitors and others. Security issues associated with VIP guests present a unique set of obstacles. When the president or a member of the cabinet attends a function at the Waldorf Astoria, the Secret Service needs to know in advance which tractor/trailer combination will be arriving at what time as well as the driver s name, CDL number and background. It takes the right kind of driver to manage these kinds of demands without jeopardizing timely deliveries. Meritex reevaluated the transportation outsourcing issue in early 2004 shortly before their five-year contract with Ryder expired. We revisited the issue of operating our own fleet and we entertained presentations from several vendors, including Ryder, says Ward. Our conclusion was to renew with Ryder for another five years. The operation works smoothly; we re pleased with our drivers; and frankly, we view Terry as a member of the Meritex management team. Other than during the immediate aftermath of the September 11 disaster, when downtown Manhattan was closed to all but emergency vehicles, there s been only one other instance in five years of operations when deliveries couldn t be made: when the remnants of a hurricane closed the parkway to Atlantic City. That s a pretty good record, says Lane. And even in that case, we were able to get in the next morning. In the immediate hours following the attacks of September 11, 2001, Meritex donated towels and linens for the rescue workers who were sleeping on the ground and using makeshift showers at Ground Zero. Terry Lane got in touch with emergency management personnel to arrange the deliveries and recruited drivers to take the loads downtown, says Ward. For his part, Lane passes the credit on to the drivers who were willing to venture into the area. It took a lot of courage to volunteer to go into an area where the threat level remained so high, he says. As for those parades, VIP celebrities and Big Apple-sized traffic jams, Ward confirms the centralized laundry concept works so well that Meritex plans to expand its menu of services. If that move goes well (and why wouldn t it?), the concept will be expanded to other major metropolitan areas, and Ryder will be ready to play a role. A Dedicated Contract Carriage agreement, complete with on-site driver management, allows Meritex to give the Hilton properties more predictable and stable laundry costs, and keeps profits within the corporate structure. Graham P. Ward General Manager, Meritex

6 YOU NAME IT We ll Customize A Supply Chain Solution For It Wherever you manufacture, however you store inventory and distribute products, Ryder designs and operates end-to-end supply chain solutions that deliver a competitive advantage for businesses like yours. Unmatched experience, flexibility and expertise make Ryder the company that other companies rely on around the globe. So, if you want to maximize efficiency, enhance visibility and improve customer satisfaction, just name it, and we'll get it done. Call RYDER or visit SUPPLY CHAIN, WAREHOUSING & TRANSPORTATION SOLUTIONS 2005 Ryder System, Inc. All rights reserved.

7 To survive and prosper in today's business world, a company s leadership is in constant search of a competitive edge. edge, Ryder s business magazine, provides firsthand knowledge on how leaders use transportation and supply chain management solutions as a strategy for success. edge is published periodically by Ryder System, Inc., a global provider of leading-edge logistics, supply chain and transportation management solutions. Please direct questions and comments to: edge Corporate Communications Department Ryder System, Inc NW 105th Street Miami, FL edge@ryder.com Graphic Design: Alonso & Company Miami, Florida Ryder System, Inc. All Rights Reserved.

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