Building for
Greater Profit
Attacks on Expenses Generate Economies of Major
Significance
"Don't fight the uncontrollables such as
weather, price wars and prorationing," the CEO
told his associates. "Let's counteract their
effects with better performance." The first
prong of the 1-2-3 attack was an "immediate and
relentless" reduction in costs. By 1965 this
belt-tightening had produced savings
reckoned
in the millions of dollars.
The achievement was
aided greatly by Sinclair's first large-scale
use of computers. Electronically-programmed
studies refined the established general guide
lines and indicators for successful
retrenchments and economies. The computers
became tools to speed management decisions by
fast collection and analysis of complicated
data. The Sinclair Optimization System (SINOPSYS)
was developed to lower costs and to improve
profit margins on refined products.
The next step in
computer use was the development of automated
equipment and computerized systems and methods,
which generated further measurable savings.
Sinclair introduced the industry's first
automated pipeline system in 1965, and made a
start that year toward programmed control of
refinery operations and some petrochemical
processes. In crude oil production, nearly half
of all raw material measuring units had been
mechanized by 1965.
Crude oil
purchase policies were changed. Refiners
specified the types of raw materials which
computer studies showed they needed for the most
economical production of more profitable
products. In manufacturing, electronic precision
whittled the per barrel unit refining cost. Fuel
and power bills were cut by the use of more
efficient equipment and the selection of most
economical fuels. Greater refining efficiency
caused no loss in production when Sinclair
disposed of its plants at Corpus Christi and
Wellsville for a net operational saving of $1.5
million a year.
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