Document 44JK0wmkbye5axza2aGXVQB0G

THE SHERWIN-WILLIAMS COMPANY CLEVELAND, OHIO BOARD OF OPERATORS 1942nd---------MEETING August 8, 1967 AUi li '967 COMPANY CONFIDENTIAL TO: Board of Operator's Mailing List Present: M. N. Allen, D. F. Benfer, H. Berkowitz, W. A. Bittenhender, S. B. Coolidge, Jr., W. W. Gran, R. F. Hennig, W. Moonan, H. L. Piepho, C. W. Shotwell, W. 0. Spencer, H. E. Spitzer, V. H. Painting, Secretary Absent: E. L. Barrett, A. B. Holton, H. C. Lenke, J. S. Prescott, R. A. Tschannen Next Meeting: Monday, August 21, 1967, 9:00 A.M. 1942-1 - FACTORY OPERATIONS Faint, Varnish, and Lacquer Factories Filled output in gallons for weeks ending July 29th and July 22nd and year-to-date with the change compared to this period last year? Pigmented Meek Ending 7/29/67 7/22/67 Tear to Date TY LY %\ ! Change Total Trade Sales (Less A-100 Loxon) Kem-Glo Super Ken-Tone Other Emulsions Industrial Transportation Automotive All Others 170,143 33,524 63,223 153,494 185,459 17,835 56,404 77,628 169,009 8,985,538 27,019 65,495 155,831 198,301 12,910 64,826 68,512 2,146,330 5,453,460 7,560,045 10,499,780 1,123,647 2,881,465 4,057,916 8,938,343 2,542,273 6,594,040 7,308,090 10,594,205 1,301,752 2,807,067 4,561,235 0.SI 15.6D 17.3D 3.41 0.9D 13.7D 2.71 11. OD Total Non-Pigmented 213,186 259,466 12,611,961 13,246,242 4.8D GRAND TOTAL 12,611,961 fl,019,369 55,320,142 57,893,327 4.4D Orders Holding - Gallons as of July 29, 1967 Industrial and Transportation Pigmented Only Direct Stock TOTAL GRAND TOTAL Immed iate Future Total 529,335 158,065 687,400 3,528,160 113,135 99,615 212,750 642,470 257,680 900,150 1,801,512 5,329,672 % Change From LY Equivalent Week's Production 36.8D 46.6D 40. OD 19. ID - 4.3 4.6 ! 0007-SWP-000029230A N24286 2- FACTORY OPERATIONS CONT'D Paint, Varnish, and lacquer Factories cont'd Total filled output year-to-date is now 2,S73,000 gallons - 4.4% below last year. There was a decline of 490,000 gallons in the past two week period as production was down considerably at Detroit during the week ending July 29 due to civil strife plus the fact that Gibbsboro was shut down for vacation the two week period which is two weeks later than last year. Production is down in all categories with the excep tion of Automotive and Trade Sales and Other Emulsions and the increase in these groups is small. Morrow filled approximately 11,000 gallons the week ending July 29 which! included some Trade Sales material as well as Super Kem-Tone. Production should increase from here forward. Friendship produced a 3,000 pound batch of Sherdye extender which looked; very good. Batches can be increased to as much as 6,000 pounds versus ! 1.000 pound batches previously produced at Gibbsboro. "Orders Holding" for Industrial and Transportation decreased 47,000 gal-j Ions in the past two weeks, most of which is in the future" category. Much of this is material required for stock. Total "Orders Holding" decreased 219,000 gallons in the past two weeks and is 800,000 gallons or 19# below the comparable period last year. Labor Negotiations The contract for Detroit was ratified by a two to one margin. Three year contracts have now been signed for Chicago, Cleveland, and Detroit.; Now that the policy has been generally established, negotiations at other plants will follow the same pattern and should be settled without much difficulty. Kem-l-Coat Premium House Paint A2 V 15 Production had been cut off as stocks appeared sufficient at both branch and factory levels. Due to continued demand, evidently in excess of sales, factories were again required to produce. Since production was not anticipated, this resulted in a raw material shortage for the Mildicide required resulting in stockouts at some factory locations. This Mildicido is also required for A-100 and the shortage resulted in inability to produce sufficient A-100 to meet all requirements., Mr. Hennig reported that Dow Chemical Company, the only supplier, did have production difficulties but are now back in production and expect ! to produce at a rate sufficient to provide 10,000 pounds per month through October and additional material thereafter. It was possible to obtain 700 pounds this week which is being allocated based on immediate need. The Technical Department has no satisfactory substitute Mildicide but will revise some A-100 formula colors to conserve stock.. Hr. Hennig reported that the Chicago Can factory had, as of August 3, 22.000 gallon and 20,000 quart cans in stock. Authorization will be granted to produce another 50,000 1-gallon cans. 0007-SWP-000029230B 0Q<j)7-iSWP-000110400 -3- FACTORY OPERATIONS CONT'D Kern-1-Coat Premium Mouse Paint - A2 V 15 cont'd Mr. Allen reported that there should be sufficient inventory at branches to meet our requirements but there is a hesitancy to release stock for transfer. Mr. Benfer will obtain inventory by size by branch including material available for transfer so that transfers can be made as soon as possible not only to reduce inventories but meet the critical need at some locations. Chicago Chemical Operations - Expressed in Pounds PRODUCTION Week Ending 7/31/67 TY % Change Chemical Products Beta Naphthol Para Cresol Phthalic Anhydride Tobias iVcid Other Chemicals P.C. Colors Azo Pigments Other Colors Esters 169,234 399,820 - 65,561 16,424 58,523 54,594 86,000 4,203,000 9,466,000 16,428,000 1,678,000 3,388,000 775,000 # 4,193,000 3,537,000 43.7D 18.ID 0.7D 16.6D m 7.21 - 1.01 - TOTAL C.P. 0PER. 850,156 36,744,000 13.5D Dry Color 30,923 2,077,000 70.7D Flushed Color 101,513 6,486,000 6.5D * Azo Pigments included with other colors. Para Cresol Production was started up August 7, a week earlier than anticipated due to receipt of recent orders. It now appears that future requirements will permit continued production and still maintain an inventory of 200,000 pounds as of August 31. Phthalic Anhydride Production has been very good for the past two weeks. If it continues at this rate and the demand does not improve, inventory at August 31 will exceed goal by as much as a million and a half pounds. Hr. Rennig reported that Phthalic Anhydride is. still very tight and that we should continue to produce as much as possible. In the event that there is an inventory problem, the Purchasing Department will arrange for shipment. Substantial amounts of Phthalic Anhydride have already been shipped for export from stock at Garland, Newark, and Chicago. 0007-SWP-000029230C 0QQ7-SWP-000110401 -4- FACTORY OPERATIONS CONT*D Tobias Ac icf Operations-are planned to resume on September 5. Present inventory is 366,000 pounds but should approach goal of 300,000 pounds by August 31, Azo Pigments Produetion'Tor the past week was exceptionally high. Some pigments were produced for flush color which is a one-stage operation and there fore increases weekly output. Alkali Blue Production for the past week was below standard due to some quality problems which when corrected will result in increased output in later weeks. < Flushed Color Historically, costs have been high and output low in the Flushed Color Department. A new forecasting approach is under study which should result in increased output and reduced inventories with consequent lower costs. This system is expected to be implemented next year. 1942-2 - AUXILIARIES - Expressed in Tons Barium Wonohydrate Barium Carbonate Leaded Zinc Lithopone Zinc Oxide Zinc Sulphate Week Ending 7/29/67 Produced Shipped Stocked - 50 1,219 186 81 985 - 91 751 188 163 726 1 243 3,352 208 253 771 Week Ending 7/22/67 Produced Shipped Stocked - 160 1,269 182 136 877 78 105 842 161 152 701 268 2 3,594 229 140 816 Week Ending 7/29/67 Week Ending 7/22/67 Cans Manufactured 2,753,664 3,753,851 Five-Gallon Pails Manufactured Inventory Vacation 21,000 43,153 21,000 Maumee Chemical As reported previously, it was necessary to reduce the labor force in July due to a cutback In customers* orders. The plant is now shut down for vacation and will resume operations on August 14. It is planned to produce Isatoic Anhydride the last two weeks in August due to new orders, which is a month or six weeks earlier than anticipated,. This will reduce the present stock of Pbthalic Anhydride and result ip same September requirements. 0007-SWP-00002923 OD rr 0007-SWP-000110402 5- 1942-3 - RAW MATERIALS AND SUPPLIES Total usage for the pasi two weeks is as follows: Week Ending 7/29/67 7/22/67 Tankcars Tankcars Linseed Oil Soybean Oil Tall Oil & Fatty Acids Other Oils TOTAL 10 5 1/2 1 1/2 1 1/2 TB 9 1/4 5 1/2 1 1 16 3/4 Styrene Butadiene Latex Acrylic Latex PVA Latex TOTAL 3 1/4 3 i/2 6 3/4 4 1/4 3 1/4 3/4 8~ 1/4 Phthalic Anhydride Isophthalic Acid 217 1/2 tons 11 1/2 tons 173 3/4 tons 6 1/4 tons Phthalic Anhydride The inventory declined 24 tons in the past two weeks. Total inventory as of July 29 was 1590 tons including 889 at paint and varnish factories, 91 at Maumee and 610 tons at Phthalic Anhydride factory - excluding 458 : tons to be redistilled. Since September 1 orders have been placed on outside suppliers for 3,588 tons domestic material and 1,822 tons have been imported for a total of ; 5,410 tons. Tin Plate Steel companies have raised the price of tin plate effective the first ; week in September, 25 cents per base box or 2.7%. This will undoubtedly result in an Increase in tin cans of at least this amount, possibly more to cover higher labor costs. Cobalt This material is again available for use in manufacture of driers. It was possible to book through Belgium sources 40,000 pounds for September delivery and 20,000 pounds for December. Also, a new Canadian source ! has been developed. This should cover our requirements at least through the 1968 fiscal year and possibly through September and October. Slow Moving, Obsolete, Etc. Raw Materials and Packages Inventory - June 30, 1967 ______ _________ _________ The following is the quantity and value as of June 30 of materials and packages in factory inventories that have not been purchased or manufacf* tured since September 1, 1966. The remaining inventory as of August 3l|, 1967 is subject to write down as a reserve but will remain in factory inventory at full value unless disposed of prior to that time. 0007-SWP -000029230E OQ07-SWP-OOO110403 -6- RAV MATERIALS AND SUPPLIES CONT'D Slow Moving, Obsolete, Etc. Raw Materials and Packages Inventory - June 30, 1967 cont*d___________________________ The total value is $1,074,000 down from $1,294,000 as of April 30, 1967. In addition to this, there is a quantity of returned goods, spoiled hatches, and overgrinds which as of May 30 amounted to 341,000 gallons or $540,000 so that this total inventory of materials in this category as of June 30 is approximately $1,600,000. It is extremely important that plant managers do whatever is possible to reduce the inventory wherever possible in a businesslike way to minimize write down and make available dollars and space for other inventory required for production. Mr. Hennig reported that it is estimated that the August 31 inventory will be $3 million higher than last year which anticipates a reduction of $8 million from the May 31 inventory figures. Inventories as of June 30 showed little improvement over May. Every effort must be made to control inventories within established goals. Raw Materials Packaging Items Total Quantity * of Quantity* of Value 6/30/67 8/31/66 6/30/67 8/31/66 6/30/67 PVStL Factories Cleveland Chicago Newark Gibbsboro Detroit Dayton Martin-Senour Pittsburgh Garland Oakland Los Angeles Total PV&L 197,280 257,395 121,462 42,345 62,696 32,900 4,405 27,813 67,976 56,635 51,153 92r/DOT 45* 143,784 39* 376,804 61* 128,925 35* 84,199 48* 111,845 17* 11,928 6* 5,588 25* 136,295 28* 79,697 29* 106,521 53* 50,247 37* 1,2337833 50* 67* 47* 63* 67* 33* 16* 64* 39* 56* 51* 55* $ 66,015. 120,696. 58,845. 23,606. 37,948. 13,909. 3,506. 9,506. 26,711. 26,842. 26,242. $41373257 Chicago C$C Finished Product Chicago C&C Raw Material 238,343 100,383 48* 59,362 $221,560. 54* 29,177. Chicago Tin Can Hubbard San Leandro Coffeyville Bound Brook Deshler Linseed Oil Mill Rubberset - E. Newark Rubberset - Gravenhurst Grand Total - Value as of 6/30/67 $135,903. 45,147. 126,004. 36,720. 28,515. 15,138. 4,778. 13,452. 3.905. $1,074,275. 0007- SWP-00002923OF 0007.SWP-000110404 -7 1942-4 - TECHNICAL Emulsion Research Laboratory Quality Control Report - June 1967 Domestic Samples received - 1157 Rejected - 7 Pending - 23 Factory Cleveland Chicago Dayton Gibbsboro Garland Rejections Shade - 1 Body - 2 Shade - 1 Body - 2 Shade - 1 Foreign Samples received - 43 Rejected - 3 (Mexico-SKT-2 Texture 1 Shade) Kem-Glo Criticism Report - July 1967 total Factory Batches Chicago 13 Cleveland 19 Dayton 17 Detroit 2 Garland 19 Gibbsboro 43 Los Angeles 4 Montreal 4 Newark 12 Oakland 20 TOTAL 153 Criticism of Color 7 5 1 . 8 15 2 3 7 TS Rejections lTCoTor & Vise.) 3 (Color) Under $10 Complaints - June 1967 Region Coif Western Southeastern North Central Pacific Southwestern South Atlantic North Atlantic This Year 9 81 82 68 3 70 82 19 Last Year 26 78 64 84 18 73 78 17 Total Month 414 438 Total Year to Date 3304 3863 For the month 210 complaints pertained to Super Kern-Tone and Kom-Glo. 0007-SWP-000029230G OO07-SWP-OO0110405 -8- 1942-5 - STOCKS ft DISTRIBUTION Finished Goods - Stocks and forecast expressed in gallons (000's) for the week ending July 29 Total Inventory Forecast for Period Starting July 9 Orders Received Back Orders Holding Consolidated Trade Sales Products Painter Products Institutional Products All Other Products 5,761 1,521 745 1,283 2,212 4,507 1,296 623 1,074 1,510 666 246 189 83 103 41 144 36 229 86 The Morrow Factory is included in this report for the first time. Rack Orders holding for the above week dropped from 299,000 in the prior week to 246,000. The major part of the Back Order Holding is at three factories. Chicago 48,000 - Cleveland 41,000 - Newark 67,000. Service Level of Regularly Stocked Items A preliminary flash report was made' to the Board for the Service Level covering the period of July 10 to August 4. These Service Levels: for this period, compared to the prior periods, are listed below* This detailed final report will appear in the next Board of Operators Minutes. There have been some sizeable declines in some Factory Service Levels, Morrow Service Level is reported for the first time: Chicago Cleveland Detroit Garland Gibbsboro Los Angeles Morrow Newark Oakland Period 7/10 to 8/4 ----- 8571 84.9 80.9 93.5 85.8 96.2 84.1 78.9 91.0 Period 6/12 to 7/7 82.6 88.4 87.4 94.1 89.5 95.6 82.5 92.7 Weekly Warehouse Shipping Performance Report The following is a report for all factories for the past two weeks: Meek Ending 7/29 7/22 Total Orders Shipped Total Shipped on Time Service for Week Total Orders Holding at end of week % Service for preceding week 5,825 5,301 91.0 833 88,3 5,380 4,750 88.3 626 91,6 0007-SWP-00002923OH 0007-SWP-000110406 -9- STOCKS ft DISTRIBUTION CONT'D Weekly Warehouse Shipping Performance Report cont'd Cleveland's shipping performance increased from 72.6# two weeks ago to 83.5# this past week. Gibbsboro Factory's shipping performance decreased from 83.5# to 65.9# this past week. The Morrow Factory increased from 65.0# the previous week to 85.8#. Ultra Var, A67 V 50 The Technical Department has stopped production on Ultra Var for the present. The Factory Stockkeeping Department has drawn off inventories at all factories and Regional Warehouses and will balance stocks insofar as possible to hopefully provide sufficient stock until a new formula is available. Oil Stain Non-Wipe Extender. A48 V 25 Mr. Render pointed out that in 1&6S the Sales Department gave an overly enthusiastic estimate of the sale of this product in half-pints versus quarts. The half-pints did not sell anywhere near the estimate tout quarts sold quite well. There has been an excessive stock of half-pints. For the last two years half-pints have replaced quarts at the quart price. The inventorv of half-pints has been reduced from 41,413 at August 31, 1964 to 8,859 at July 31, 1967. Since this material is 1963 manufacture,*an exemption was given in the 1966 year from the three-year depreciation charge to the Branch. This exemption was not continued during the 1967 year. There have been many complaints from Branches that they are receiving old stock which will be charged off to them at 8/31/67. These complaiots have been ignored because the material is perfectly good. Half-pints will continue to be substituted for quarts until about January 1, 1968. This should dispose of most of the balance of the half-pints. Mr. Gram stated,there was a possibility of this line being changed, which would not require the use of the Extender. Before we produce any additional quarts or half-pints, a check should be made to see where we stand on the possibility of a change in the line. PV&L Finished Goods Inventory Goals - August 31, 1967 Finished goods goal for Angus t 31 is 89.1 million which is 2.8 million or 3.3# higher than last year. 2.3 of the 2.8 million increase is at Acme and is entirely the result of the increase in leased department stores and the added Levitt operation. Adjusting for additional invea-r tory at Morrow and the increase at Acme, the net inventory goal is less than last year. The goals appear realistic providing sales meet forecast and factory production eases down. Factory inventory goals will not take priority over service standards. 0007-SWP-0000292301 rr 0007-SWP-000110407 -10- 1942-6 - MISCELLANEOUS Automotive 1968 Colors Hr. Gram reported that the production to date on 1966 colors was disappointing as only 47 out of a total of 85 had been completed. The situation is more serious than normal inasmuch as the Automotive Industry is pushing to produce as many 1968 cars as early as possible prior to any possible labor difficulties. Mr. Spencer reported that the delay was due to many reasons. First of all, the standards for General Motors were received later than normal, the 1968 colors are both more difficult to formulate and manufacture plus the Detroit factory has been hampered in filling and finishing operations due to the installation of new conveyers, accumulating tables, etc. In addition, they had been hampered by a tight labor market and civil strife. Orders for IBM Equipment A Letter of Intent nas already been issued with IBM corporation for the purchase of a 1287 Optical Reader and a Mass Memory File 2311, Mr. Allen requested and the Board approved issuing a firm purchase order to cover the purchase of these two pieces of equipment in order to assure us a firm delivery date which cannot be guaranteed with a Letter of Intent, These will be supported by a plant and large expense requinition. Complaint and Criticism Analysis - July 1967 Type Products Trade Sales Super Rem-Tone Other Emulsions Kem-Glo Professional Coatings Automotive Chemical Coatings Graphic Arts Dexall TOTAL Month TY LY 1 10 11-- 12 81 25 19 -1 55- 55" Recall Analysis - July 1967 Month TY LY Trade Sales Super Kem-Tone Other Emulsions Kem-Glo Professional Coatings Automotive Chemical Coatings Graphic Arts Dexall TOTAL 3 4 1 5 10 5 - 25 7 - 1 3 3 3 3 2 77 Year to Date TY LY 52 168 21 55 19 19 11 60 27 254 275 4 12 4 505 TY LY 79 112 17 22 26 5 5 13 40 24 59 52 42 49 15 7 775 257 0007- SWP-000029230J OO07^SWP-OOO110408 -11- 1942-7 - NEW GOODS SLIPS Pinal Approval 1) Zip Mask. Light Green F25 G 4 This will replace the present material F25 G 3 which is being dropped due to unavailability of one of the raw materials used in the formula. 2) Zip Mask, Clear F25 T 6 This will add a clear "to the line which can be tinted with Kem Tinting colors. 3) Professional Coatings Traffic Zone White B46 W 16 and Traffic Zone Yellow B46 Y 2_________________ ________ ,__ ,________ This will replace many specials now being produced and will off4r a low priced traffic paint line for sale under the Professional Coatings label. Hr. Spitzer was asked to investigate the possibility of revising the Trade Sales Sher-Guide Traffic Paint to be parallel to this line. 4) Zinc Clad 5 Organic Zinc Rich Coating B69 A 45 To add zinc rich products to the Industrial Maintenance Line te be '! competitive and furnish a complete line. 5) Zinc Ctad 7 Catalyzed Epoxy Zinc Rich Coating B69 A 47 To add zinc rich products to the industrial Maintenance Line to be competitive and furnish a complete.line. 6) Zinc Clad 8 Inorganic Zinc Rich Coating B69 A 48 To add zinc rich products to the industrial Maintenance Line to be competitive and furnish a complete line* 7) Loxon Roof Paint K16 Series Change rex assignment to Al9 Series, effective January 1, 1968. 8) Loxon Exterior Masonry Paint K1S Series Change rex assignment to A25 Series, effective January 1, 1968. 9) Loxon Interior Kasonry Paint K12 Series Change rex assignments to a 22 Series, effective January 1, 1968. 1) Loxon Latex Concrete K13 T 1 and Loxon Latex Concrete Liquid K13 Y 2 Change rex assignment's to A&3 f 1 and A23 V 2 respectively as of January 1, 1968. 11) Five-Gallon Pails - Open Head and Tlte-Head Change color standards as follows: Unlined pails from black or white to Turquoise. Interior lined pails from dark gray to light gray. This change will be effective when Hubbard is able to make the changeover. DROP SLIP --TS1 z3Tp Mask, Light Green F25 G 3 Dropped due to unavailability of raw material. F25 G 4. Being replaced with 0007- SWP-00002923OK 0007-SWP-000110409