IMB 495

MANAGING LINEN AT APOLLO HOSPITALS

APOORVA SARA PRAKASH, MUTHU SOLAYAPPAN AND

U DINESH KUMAR

Apoorva Sara Prakash, Muthu Solayappan and U Dinesh Kumar, Professor of Quantitative Methods and Information Systems,
prepared this case for class discussion. This case is not intended to serve as an endorsement, or as a source of primary data, or to
show effective or inefficient handling of decisions or business processes.

Copyright © 2015 by the Indian Institute of Management, Bangalore. No part of the publication may be reproduced or
transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise (including the
Internet)—without the permission of the Indian Institute of Management, Bangalore.

This document is authorized for use only in T.A.S. Vijayaraghavan's Operations Research, BME 2016-19 course at Xavier Labour Relations Institute (XLRI), from January 2018 to May 2018.
 Managing Linen at Apollo Hospitals

It was a typical Bangalore evening, pleasant, a fresh breeze in the air and intermittent short-lived
monsoon showers, the ideal weather for sipping a hot cup of coffee. Admiring nature’s exuberance
through the au bon pain cafe’s glass windows at the Indian Institute of Management, Bangalore (IIMB)
campus, Dr Ananth N Rao, the head of the quality department at Apollo Hospital started explaining one of
the operational problems that was perturbing him for the last few weeks. Sipping the hot coffee, Dr Rao
said to Professor Dinesh Kumar:

In 2013, we spent around INR 5.1 million on the linen used in our hospital, about 67%
was spent on washing alone. I believe that if managed optimally, we can reduce the
money spent on linen significantly.

Apollo Hospital, Bangalore, has been a tertiary care flagship unit of the Apollo Hospitals Group
accredited by the Joint Commission International (JCI). The hospital focused on centers of excellence
such as cardiac sciences, neurosciences, orthopedics, cancer, emergency medicine, and solid organ
transplants, besides a complete range of more than 35 allied medical disciplines under the same roof.

The issue that was bothering Dr Rao in August 2014 was the process that was being followed at Apollo
Hospital on Bannerghatta Road, Bangalore, for managing linen. The cost of managing linen (i.e. the cost
of buying new linen and of washing) was around INR 5.1 million per annum ($1 = INR 60, in January
2014). They spent approximately INR 0.286 million per month on washing alone. The demand for linen
was uncertain since many patients demanded more linen than was assigned to their bed for various
reasons. To manage uncertain demand, Apollo maintained a safety stock for linen, since non-availability
of linen could result in customer dissatisfaction. At the end of each day, the used linen was sent for
different types of washing depending on the stains on the linen. A few heavily-soiled items of linen were
discarded as they were not washable. Dr Rao discussed the linen management problem with his Chief
Executive Officer and both of them were convinced that an analytics approach was required for effective
management of linen at Apollo that would enable them to reduce the cost of linen management.

LINEN IN HOSPITALS

Linen is one of the essential requirements of a hospital, consisting of bed sheets, pillow covers, blankets,
gowns, aprons, etc. Linen is used in all the departments of a hospital by the patients, doctors, nurses, and
attendants. Soiled linen was sent to the laundry where it was washed with chemicals to get rid of any
stains and contamination. Heavily-soiled linen was subjected to extra wash cycles. The cloth used in the
linen met industry standards and was certified to handle a certain number of regular washes.

Linen in hospitals can shelter a large number of potentially harmful and disease-generating
microorganisms.1 This implies that an appropriate process should exist to avoid contamination of linen.
Contamination of linen can lead to transmission of microorganisms to people and to the environment. All

1
“Guidelines for managing linen and laundry,” Report, East Cheshire NHS Trust, December 2010. Document available at
http://www.eastcheshire.nhs.uk/About-The-Trust/policies/L/Linen%20and%20laundry%20management.pdf

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 Managing Linen at Apollo Hospitals

stages of linen management such as storage, handling, bagging, transporting, and washing have to be
handled with care.2

Several standards and best practices have been generated by different health services across the world for
storage, handling, and washing linen. Managing linen is important for hospitals since it can have a
significant impact on the operating expenses of a hospital. Shortage of linen can result in patient
dissatisfaction and lead to delay and cancellation of surgeries.3

LINEN MANAGEMENT PROCESS

Apollo Hospital had a Central Linen Room where all the linen was stocked and distributed to various
floors according to the demand from all the floors/units. Used linen was collected by the nurses and
segregated into used and heavily-soiled linen. Heavily soiled linen was collected separately in a yellow
bag and thrown down the chute; the yellow bag could contain multiple linen items such as bed sheets,
pillow covers, etc. Heavily soiled linen went through a special cleaning process to ensure that it was
cleaned and disinfected. The laundry representative counted the soiled linen and the yellow bags and
issued a delivery challan (out). Linen was sent for washing every evening; it was washed in the laundry
and returned to the Linen Room after two days (day + 2). The Linen Room maintained a book to record
the number of linen items sent out and received. A certain percentage of bed sheets were also recycled
into pillow covers. The linen use cycle is summarized in Exhibit 1.

The details of linen sent and received to/from the laundry were recorded in the delivery challan book. The
linen issued to various floors was recorded in the Linen Room book. There was no established system to
identify the number of washes before discarding an item based on the recommended number of washes
for normal or heavily-soiled linen. The returned laundry was inspected for any stains or wear and tear.
Approximately 0.28% of the used linen was discarded every day and about 40% of these discards were
converted into pillowcases. Daily discards occurred mainly because of heavy stains. The Linen Room
book was audited every morning. There were monthly audits to inspect the discarded linen and take
account of the entire linen of the hospital. The flow of linen is summarized in Exhibit 2.

OCCUPANCY INFORMATION

Linen usage depends on the occupancy rate of the hospital. The forecasted daily occupancy from October
2014 through December 2014 is shown in Exhibit 3.

Ananth added:

The hospital maintains a linen safety stock for 2 days (that is, 50% of the linen), 25% of
the linen is under circulation (par count) and the remaining 25% is in the laundry.

2
Ibid.
3
“Linen Management in Hospitals,” Clean India Journal, February 24, 2012.

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 Managing Linen at Apollo Hospitals

Each bed had a defined par count (2 bed sheets and 1 pillow cover). The linen was changed every
morning and also immediately after a patient was discharged. This increased the daily usage, which was
accounted in the additional 2% used by the hospital.

COST INFORMATION

The cost of washing a unit of bed sheet was INR 5 and the cost of buying a new one was INR 181.5. The
linen used every day was sent for washing at the end of the day. Similarly, the cost of washing a pillow
cover was INR 3.3 and the cost of buying a new one was INR 64.35.

THE CHALLENGE

Apollo received approximately 250 patients every day and each occupancy required two bed sheets and a
pillowcase (which is the par count). The capacity of the hospital for inpatients was 300 beds. The life of
the linen depended on the number of washes: the linen could last up to approximately 70 wash cycles
under regular wash; whereas the life reduced to 45 wash cycles for heavily-soiled linen. One of the
challenges was to track the number of washes the linen had undergone. Technologies were available
through radio frequency identification (RFID), using which linen usage and the number of cycles could be
recorded accurately. However, RFID was not used by Apollo Hospital. According to Ananth Rao:

RFID cannot be implemented in hospitals in India as these RFIDs are costly and also may
not survive the fluctuating washing patterns in India, thereby making the initial
investment (even if made against better judgment) futile.

The cost of linen management through the year at Apollo was nearly INR 400 per month per bed for just
the laundry expenses on bed linen. The total cost of managing linen per bed per month was INR 1,700
(which included all the linen such as bed sheets, pillow covers, gowns, aprons, etc.). The total cost of
linen per month including procurement, replacement, maintaining two days’ inventory, 0.28% discards,
and laundry charges was approximately INR 4,25,000.

There was a need to relate the occupancy of inpatients to predict the number of bed sheets and pillow
covers required on a daily basis. Apollo purchased linen once in a year. Dr Ananth Rao thought that they
should increase the frequency of purchase. However, time between purchases should be at least 30 days to
avoid too-frequent purchases. Apollo Hospital wanted to purchase an optimal quantity of linen at the right
time to ensure that a sufficient amount of linen was available every day to meet the demand as well as
maintain a buffer inventory that would minimize the total cost. During its quarterly meeting held in
August, the linen management committee of Apollo Hospital decided to buy a new stock of bed sheets
and pillow covers for the quarter starting from October 2014 and destroy many old bed sheets and pillow
covers. After destroying the old bed sheets and pillow covers; they expected that there would be 1,260
bed sheets and 680 pillow covers available on October 1, 2014. Also, Apollo Hospital was expecting 470
bed sheets and 240 pillow covers on October 1, 2014 and 460 bed sheets and 232 pillow covers on
October 2, 2014 from the laundry.

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 Managing Linen at Apollo Hospitals

Exhibit 1 Linen use cycle

Source: Apollo Hospital

Exhibit 2 Linen flow cycle

Source: Apollo Hospital

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 Managing Linen at Apollo Hospitals

Exhibit 3 Forecasted daily Occupancy data for October–December 2014

October November December
Day
2014 2014 2014
1 229 272 260
2 236 279 254
3 223 224 233
4 270 238 220
5 261 238 233
6 232 240 288
7 220 242 286
8 250 286 255
9 236 286 251
10 235 266 247
11 284 258 242
12 286 258 252
13 262 248 286
14 275 236 286
15 271 286 245
16 246 286 238
17 244 265 233
18 288 247 220
19 283 266 212
20 248 262 242
21 259 245 280
22 265 286 261
23 256 288 269
24 254 252 250
25 286 245 245
26 286 237 240
27 270 232 283
28 251 194 210
29 247 237 196
30 217 272 188
31 211 - 170
Source: Apollo Hospital

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This document is authorized for use only in T.A.S. Vijayaraghavan's Operations Research, BME 2016-19 course at Xavier Labour Relations Institute (XLRI), from January 2018 to May 2018.