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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 Industry's first automatic loading devices for LP-Gas transfer gave Sinclair dealers 24-hour unattended service, also cut Sinclair's costsreckoned 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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