Table of Contents

Executive Summary.................................................................................................2

Introduction.............................................................................................................3

Fish Bone..................................................................................................................4

Decision Making Matrix.........................................................................................6

SOP...........................................................................................................................8

Executive Dashboard.............................................................................................10

Estimation..............................................................................................................13

Conclusion..............................................................................................................14

References..............................................................................................................14

1
 Executive Summary

Bubble House is a laundromat which has just established with a small scale but have a great
potential for developing even further in the future. They need some improvements in their
process because if they continue to work this way they will lose nearly $2000 per year. They are
offering to consult for anyone has plan opening a laundromat with the same system as them.
Working in this kind of industry may easily make your stores forgotten if you do not provide the
customers with the best service.

In this report, we try to find all their problems and make some suggestions for the company. At
the moment, the biggest problem that this laundromat is having is the delay in the process causes
them to have low productivity and losses money. We identify the three main causes of these
problems by using a cause-effect diagram. Those three main causes are lack of POS, inefficient
method and undedicated employees. We will discuss it more in the report.

After the decision-making matrix, we decide to solve the problems of the inefficient method first.
The SOP of the company is also presented in the report with 11 steps. We have decided to
replace 2 steps which are packing and folding with the folded clothing machine. This will
improve the process and reduce the time cost comparing to pack and fold manually. If the
situation remains unchanged, without automation, would take us 2.3 times longer.

If the decision about the change is made, it only costs $1000 and almost $200 of related expense
to install the machine. Moreover, with that change, we can earn nearly $2000 more in a year. The
break-even point can be met after over a month and the return of investment is 62.52%. After
calculating, automation is suggested to Bubble House to optimize the profit. The cost will be
$1200 in total but you can gain back $1300 each year, which is such a great deal for investment
that you need to take into consideration.

To install the machine, Bubble House would be taken about over 2 months to receive the
machine from November 2019 to January 2020. All the steps needed are presented clearly in the
GANTT chart. We have to proceed with steps such as Pre-order, prepare the budget, negotiate,
transport, receive, install. This is effortless and time-saving procedure still the result gained fully

2
meets the expectation. Overall, Bubble House need to act now or they will keep on nearly $2000
per year.

Introduction

Bubble House was launched on August, 2017, is a convenient laundry and drying store chain
operating in Hanoi. Focusing on laundromat and laundromat set-up consulting, Bubble house is
now developing stably with 2 stores on Mac Thi Buoi Str., and Phuong Mai Str., Hanoi. The
company currently provides such services as dry and wet cleaning, each store has 1 manager, 1
employee, 5 manually stacked electric dryer washing machines. With equipment imported from
the world's leading industrial washing machine manufacturer: Alliance Laundromat System, after
only 1 hour, the clothes are dried cleaning in standard conditions. Moreover, with the specialized
chemicals from Diversey, customers’ clothes will be clean and environmentally friendly. The
company wisely select the fixed price for the amount of 9 pounds or less clothes is 40,000VND
($2) in order to stimulate demand, encourage customers to get the clothes washed in high
quantities which increases store sales and revenue in the long run.

The company’s growth rate is quite stable with annual revenue increases slowly but steadily
from January to March ($177.91 - $2087), the rate reduced from April to September because of
fewer orders in summer time but it continues to increase significantly the last months of the year
due to high demand in winter time and keep the revenue at a safe level of $1982.6 in December.
So we can conclude that Bubble House is keep growing stably through years.

On the other hand, the company is now facing with many problems which can lead to the danger
of the company such as: labor force problems, inefficient method, lack of POS (point of sale)…

3
 Fish Bone Diagram

A cause and effect diagram examines why something happened or might happen by organizing
potential causes into smaller categories. It can also be useful for showing relationships between
contributing factors. One of the Seven Basic Tools of Quality, it is often referred to as a fishbone
diagram or Ishikawa diagram. One of the reasons cause-effect diagrams are also called fishbone
diagrams is because the completed diagram ends up looking like a fish's skeleton with the fish
head to the right of the diagram and the bones branching off behind it to the left.

4
The company is now facing with labor force problems, specifically skilled labor shortage, low
engagement with the company, not meticulous at work which affect badly on their performances.
The reason for the employees’ limited skill is that the laundry job characteristics doesn’t require
much educational attainment, interpersonal skills, they only have to wash, dry and fold clothes…
Also, the salary of the job is only $0.65/hour due to little skills to complete the assigned tasks.
The company complained that employee didn’t pay attention on classifying clothes, putting the
exact amount of chemicals in the washing machines and not meticulous at work… To be
engaged, workers must be motivated. For some workers, motivation arises naturally and eagers
them to do well at all times. For others, external motivation is necessary, but in Bubble House,
employees don’t seem to be motivated. People who work here are mostly students and alumnus,
so they have low engagement with the store as it is not their long-term work, they think they
don’t have enough opportunities for development. And because of negative motivation, they will
not willing to emotionally invest in their work and consequently decrease productivity.

Another reason for workers’ low engagement is that Bubble House serves customers with only
one employee per shift. This creates loneliness in workplace and poor relationships development
between employees because they don’t have time to meet each other. This will make them feel
that they are not a part of a community of connected individuals, which couldn’t create self-
improvement and engagement with the work.

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The second thing we consider is that Bubble House is operating in a rather inefficient method.
According to a definition of Edrawsoft website, the methodology, also known as methods or
techniques, will affect the action's result; and there are some factors to be concerned like
workflow, choice of technical parameters, technical guidance and the preciseness and execution
of workflow. Another similar idea is from Tallyfy website that the manager must consider the
need for policies, rules, regulations, or procedures to ensure consistent quality.

We recognize that the factor that makes the methods of this store ineffective comes from their
own laundry process. Their washing process does not maximize the productivity of employees as
well as the machine because they have to do it step by step, in the order given. After drying the
clothes, they have to fold each clothes and then pack them into bags to return to customers. You
may find that manually folding and packing clothes is very time-consuming, it accounts for
about 22% of the total time during the washing process. Bubble House can hardly ensure their
productivity during the peak seasons, in which the store has to handle a greater amount of
laundry than usual. Meanwhile, slow productivity will cause them to retain a lot of unwashed
clothes and make customers wait longer.

The last problem that this company has to face is the issue of lacking Point of Sale (POS). A
POS transaction is what takes place between a merchant and a customer when a product or
service is purchased, commonly using a point of sale system to complete the transaction (Jason
Feemster, 2019). There are many components of a POS system and one of them is the receipt
printer. This machine is to print customer receipts, bill, purchase orders, and any other business
certificate, which can save valuable time during checkout (Million.my, 2016).

Through interviews, we knew that all papers and invoices were written by hands, without the
intervention of electronic devices. At the store, there are no machines for entering, storing or
exporting information such as computers or receipt printers. At the first step, the employee who
receives the dirty clothes will record the customers’ information in a notebook to store it. After
the laundry process, they will have to find the old information that the customer left to contact
them and record the invoice. All are done manually, which takes a lot of time and effort.
Moreover, such manual recording makes it difficult for employees because it will take a certain
amount of time for them to find out. Nowadays, when machines are able to systematize data
accurately, what people do themselves is easy to lead to the problem that they may have certain

6
mistakes such as getting the wrong customer information or wrong delivery to customers, …
When employees face with such obstacles in working with information, their productivity might
greatly reduce, furthermore, if they make a mistake, this will damage the reputation of Bubble
House.

Decision Making Matrix

What is decision – making matrix?

A decision – making matrix is a useful technique to help the organization make a right decision,
especially when there are the number of factors to consider.

There are 5 simple steps to make decision – making matrix.

Step 1 List the options and factors.

Step 2 Score each option.
Step 3 Value the importance of the factors.
Step 4 Multiply your option scores by the weight of the factors' importance.
Step 5 Add up the weighted scores for each option.

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First, three problems which are Lack of POS, Inefficient Method, Undedicated Employees are
discovered creating the delay in the process. Then, six main criteria are listed: Cost, services
level, customer satisfaction, time, potential benefits, feasibility. For further explanation, potential
benefits are the long-term advantages which can be gained by fixing the problems and the
feasibility is the possibility that the changes can be made for each problem. The most noticeable
criterion here is the Cost, as the company is small, the profit is the priority, so the company pays
much attention to the cost and the revenue of the company. Therefore, if the problems make the
company losing money without gaining that amount of money back, it could hurt the company.
The second criterion is taken into consideration is Time, since time is another source of money,
so if they lose time, that means they are losing money, too. Other criteria all have an impact on
factors but they only have an average impact on those factors.

After weighing and calculating, we realized the inefficient method have the greatest effect on the
criteria which means that is the most harmful factor with the score of 373. It is proved to be the
factor caused time and cost consuming and customer satisfaction. Therefore, an inefficient
method is needed to be considered and is chosen to be solved first.

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 SOP

Existing SOP

Proposed SOP

An SOP, or Standard Operating Procedure, is merely a documentation of how a process works.

SOPs work best as a step-by-step list of procedures that anyone can follow with a bit of training
(Andrew Childress, 2018). Each SOP should be specific enough to be clear and understandable,
but flexible enough to be useful. SOPs are the first line of defense in any inspection, whether it
be by a regulatory body, a partner or potential partner, a client, or a firm conducting due
diligence for a possible purchase. More important, they are safeguards for ensuring that
processes and activities occur as they should, so that they yield the same results every time. And

9
they are mandated for the industry, so they are legally binding. Surely, then, having sound
procedures in place makes for good compliance; moreover, and perhaps equally important, they
help ensure good business practices.

Step 1 is the beginning of a procedure. Moving onto step 2, sorting is when the employee will
have to classify all the clothes carefully. All of the clothes will be sorted into different types. The
clothes that have the same colors or same kind of fabric will stay in the same wash tube. On step
3, the clothes will be weighted as the money customers pay for their laundry depends on the
weight of the clothes that they bring. Next in step 4, the detergent, clothes, and water are the
input for the washing process to get started. On step 5, the washing machine will automatically
proceed and at this moment, the amount of time that the worker sits and does nothing is the
highest. On step 6, the employee will transfer the clothes into the drying machine. The right
temperature must be chosen for different material to avoid burning all the clothes. After finishing
this step, it depends on what the customers ask for so either move straight to step 8 which is
folding or do some ironing at step 7. Both step 7 and step 8 are done manually so it might slow
down the productivity of the laundromat due to the skill of the worker. Later on, at step 10, the
employee will write the bill for the customer to get paid and record the transaction into the ledge.
At last, we finish the procedure in step 11.

That was for the existing process. Now for the proposed process, we want to replace step 8 and 9
by step 12 which is a folded clothing machine. It will do the job at a much faster pace, reduce
15% of the time for the process and increase the productivity for the store. The company will
lose nearly $2000 per year if not making any change in the SOP. The old procedure is considered
time and money consuming. Moreover, in the wintertime, when the shop is crowded, employees
are often overloaded. Finally, when the benefits of folding machine are evident, we consider the
price of the machine which is $1000. This is such reasonable price when you could earn long
term advantages by paying the price of $1000 which may be covered in over a month.

10
 Executive Dashboard

Run time and Down time

The total run time for the whole process is 115 minutes. Different steps require a different
amount of time. For instance, sorting clothes takes around 15 minutes since this step needs the
carefulness of the employee. However, while sorting the cloths, the worker may take a break for
about 5 minutes which causes the downtime in the process. The histogram shows how much
downtime is occurred in each step and cause a delay in the process.

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Quality

There are five standards to judge whether the clothes meet the requirement after the washng
process.

1. Clothes that do not mix with other colors

2 Clothes without stains
3 Neatly folded clothes
4 Clothes that are returned to the right customers
5 Clothes that are not being burnt by the iron

For the existing process, the rate of defective clothes takes around 6% and the rate of clothes
meets the standards consists of 95%. However, after making some improvement in the process,
the percentage of defective clothes has reduced down to 3%. This shows that the quality of the
clothes has been improved by using the machine.

Electric Expense/Revenue

The blue line shows the difference between expense and revenue before investing in machinery
and the orange line is after investing. As we can see, the trend still stays the same no matter it is
before or after investing (Lower demand in the summertime, higher demand in wintertime). In
the summertime, customers tend to wash their clothes at home instead of bringing to the laundry
stores so there isn’t much change whether the company invests on folding machines or not but
we can see the difference when paying attention to the wintertime. In this period, both the
expense and revenue increased because of higher washing demand, but the rate between them
has decreased after investing in machinery. This shows that the investment in machinery brought
higher revenue and profits, which can offset the total cost incurred, create long-term profits. We
can conclude that with automation, the operation process is more convenient, doesn’t take many
human capabilities and bring higher profits.

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Work Productivity
Workload
Productivity =
Time
In the summertime Before automation
Workload: 35 tubs Time: 115 minutes

In the wintertime After automation

Workload: 90 tubs Time: 98.2 minutes

Summertime, before automation 35/115 = 0.30

Summertime, after automation 35/98.2 = 0.35

Wintertime, before automation 90/115 = 0.78

Wintertime, after automation 90/98.2 = 0.91

In the summertime, since there are few customers, there isn’t much difference in productivity
before and after innovation. But in the wintertime, when the shop is crowded, the differences are
clear. When the machine is used, they can take more workload and make the productivity
increases by 3 times comparing to do it by hand.
Possible Maximum Outcome
If the process is optimize, we measure possible maximum output in a day before and after
automation. Assume that before automation, a process takes 115 minutes, so at maximum points,
a day 30 washing tub can be active. After automation, it only takes 98.2 minutes for the process
to be done, so the washing tubs which are active increase by 5 tubs a day.
Hours the company works: 11x60 = 660
Before automation, it takes 115 minutes per process
So, the maximium output per day before automation: 660/115= 6 tubs
There are 5 tubs working at the same time: 6x5 =30 tubs
Similarly, we calculate the possible maximium output per day after automation is 35 tubs.

13
 Estimation

Current Process Improved Process

72 shirts 24 min 7.2 min
Time saving: 24 – 7.2 = 16.8 min/wash tub or 2.3 times
1 day 4h 1.2h
Machine price: $ 1000
Cost for 1 year (folding and
Labor cost: $ 762 Electric expense: $ 137
packing only)
Labor cost: $ 229
Cost saving each year $ 253 (folding and packing only)

Compared with the existing process, the improved one can reduce the time spent on folding and
packing by 16.8 minutes or 2.33 times. Although we will have more types of expense in the
proposed process such as electric expense and depreciation expense, the total expense will lower
by $253 for folding and packing per year.

With the same working time, Bubble House can wash more clothes when using a new folding
machine. The estimated revenue after improvement increase from $17,640 to $19,950 (by 13%).
The cost will increase slightly because more electricity will be used and the depreciation cost
will occur (8%). On the other hand, the profit will increase by 21%.

The Return On Investment is 62.52%, which is a great number for a Laundromat with low
investment and short break – even (1 month).

Current Process Proposed Process

Revenue $ 17,640 $ 19,950
Cost $ 11,709 $ 12,752
Profit $ 5,931 $ 7,198
R.O.I 62.52%
Break even ~ 1 month

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 Conclusion

After analyzing and estimating, these are memorable numbers: profit increase by 21% with low
cost of the improvement (about $1000) and the amount of time required for the discounted cash
flows generated to equal its initial cost is only 1 month. Moreover, the Return On Investment of
62.52% with a Laundromat is extremely high. This might be an adorable number with any large
scale factories or companies. Bubble House should invest to get the folding machine, which
makes the process more efficient. Bubble House can serve more customers, earn more profit.
Especially the break-even is only 1 month while the Return on Investment is high. What a
bargain! With this improved process, Bubble House can be developed and expanded with many
other Laundromats and has more potential partners, who also want to run a laundry business. It is
extremely potential for the laundry set-up consulting service of Bubble House.

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