Millwork Institute Meets At Fresno

Adopts Advertising Campaign

Sixty-five members of the Millwork Institute of California attended the Quarterly Session held at Fresno, at the Californian Hotel, June 12 and 13.

The meeting had been postponed from May, due to a number of causes, accounting for the sfnall number of members on hand at the opening of the meeting, called to order by President Harry Gaetjen. He told of the very favorable reaction of the members of the Pacific Northwest Association and the Millwork Cost Bureau, to the insignia adopted by the California Institute, and predicted that similar action would be taken by these bodies, in a short time.

In his report, Secretary Didesch commented on a recent decision affecting trade associations, saying:

"One of the best things for association work generallv that has happened in a long time is the recent decision of the Supreme Court in the cases of the Maple Flooring Manufacturers and the Cement Manufacturers Protective Association. The Supreme Court has actually reversed itself in its idBas as to trade associations. Heretofore, there was a stigma in their minds merely in the fact that such an association existed. The way they looked at it, every- thing pointed to collusion, price-fixing and so on and they even w-ent so far as to say it was illegal to issue prices subject to discount; that you could not agree as to costs and all sorts of things like that. Now, they haven't said now that you can fix prices and agree as to costs, but they have taken a more liberal view and say it is not illegal for trade associations to compare statistics bearing on cost, production, sales, profits and all things of that kind. As you all know, Herbert Hoover is verv strons for the idea and has done a lot of wonderful work in his deoartment and has invited us now to participate in what they term simplifica- tion. Now that is incorrectly called standardization and usually it is understood to mean that everything, our whole product, would make an attempt to standardize it. That is all wrong. but what they aie after is to eliminate, or have less standards but have those standards of the same kind."

I\{r. Wm. Lucas, Secretary of the Eastern Millwork Bureau, spoke at the afternoon session, telling of the otganization, foundation and the functions of their body.

After considerable discussion, pro and con, on the proposed $60,000 advertising campaign as worked out by Hammel-Sutphen Co., Inc., Los Angeles, the meeting went on record as being in favor of its adoption, for one year. This rvill mean, if the majority of the members concur, that the Millwork industry of California will receive the benefit of thousands of pieces of advertising matter telling the general consuming public of the aims of the industry, and will increase the use, it is predicted, of custom made millr.vork, against the material that has been heretofore made up on the job.

Mr. Arthur Brenhauer, of Fresno, spoke of "What are the Three Most Glaring Causes of Loss of Profit ?" In part he said:

"I don't know how we are going to confine this to three. The causes of loss is an easy subject to talk to, but to tell you how to eliminate them is not so easy. In any discussion along this line, we always thing of cost-finding which is fundamental and we have had so much talk on that, I am going to leave that out of it

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(Continued from Page 96) practically. We are looking for a profit but we don't know where we are looking; don't know where the profit should be. r

"One reason I think the planing mill faces tremendous losses is the way wi make bur bids. Most planing mills have estimating departments where men put in from 2 hours to a week's time in compiling an estimate. They go into a lot of trouble; thev figure , the footage on the job; estimate the labor; they use their past experience; if they don't have a cost finding system, they use horse sense and get together a figqre on the job, representing a fair amount of profit. But, that subordinate don't have the authoritv to 'make a bid. He takes it to the manager. Business is pretty rotten;. the manager is not feeling very good; the job figures up 920,000 and the manager says that the bid on that job will be gl8,@0. He don't know why; don't know whether there is 92,000 or $5,000 profit in the job, but he can't believe that it would be possible to sell the job for what the figures show. So, through habits acquired through a period of years.

"It isn't because we don't know, but I believe that somehow. some way, the planing mill operator gets by and has some fair conception , of what the cost should be as shown by these records here, tiking -./into consideration the firms with complicated cost finding systems; - others with no cost finding system, and yet the average was the same.

"It isn't because we don't know, but because of that haphazard method of making bids. If business is slow and we have tb go after the business-I am not here to tell you that we are going to sit by and say if we can't get this business, at our price, we won't take the business. If you take a job too cheap, you lose money; but if you don't take it at all, you lose money too. There is a breaking ' point somewhere on volume that we have got to have. A lot of us don't know enough about that and are taking jobs too low to increase volume, where we would be better ofi if we didn't increase it.

"If you are going after business on a low cost basis. there is only ' one way to do it and that is to analyze every figure on the estimate and get that down to the lowest possible point and then have nerve t-g^pa!e that your bid. That will help to eliminate that particular difficultv.

"Another item that enters into our loss and not usuallv discussed are our Selling methods. We give credit to people not entitled to qdit. The-only reason that we have to justify that action is that ff6 are afraid that our competitor will get the job. We don't Sre alrald ouf don't real:;ze that we are helping to put the legitimate contractor out of business-the man that is willing to pay a fair price is either compelled to quit business or to shop around, peddle bids and do everv- thing else to try and compete with this irresponsible contractor that_ you -and I_ are keeping in business. That same thing applies to the wholesaler and I have told several of them a eood manv times, whenever a wholesaler sells a planing mill whose credit doei not justify such purchase, he is hurting the entire business. I am not difierentiating between the large and small concerns, or the large and small contractors, because I believe the smallest planing mill can be operated on just as firm a financial basis as the bie one, if assets and liabilities are in proper proportion. We should ' have a credit standard to go by; should refusC to sell people that are not responsible; make collections promptly and in that wav cut down losses, which will increase our profits.

"The losses through the giving of credit in my mind should never exceed gnore than one per cent of the gross sates and it should better be one-half of one per cent or sometimes even less than that. isn't because we don't know again. We do know and know . when we are taking chances, but are so anxibus to get the business that we let our judgment slip and take these accounts that we can't collect.

"Another reason for loss of profit is lack of organization, or improper orga.nization. Too many ptaning mills think of three units, the ofrce, the general superintendent and the emplovees. each one trying to function separately. In my opinion that is absolutely impossible. Those three units make up a planing mill, directed by .o.ne head, all striving for the same purpose and unless we can put 'that over to the superintendent, to the men in our mills. we can't have the right kind of an organization. If the superintendent of an organization says that the office has made a promise of detivery on this job at a certain time and if they think I am going to break my neck to fulfill that promise, they are mistaken and he tries to hold up the order, it is impossible for a mill under those conditions to give any service. It is true that the man that sets these times of delivery, or dates of time of deliveries should consult with the superintendent, and not arbitrarily try to force something through the factory, but when that word is once given out. it shiruld bind that firm ind.everybodv in that organization should strive to meet to lhat obligation, just the same as if when I attend this meetins and I put rfy firm on record for any subscription or any obligation, anc r my nrm suDscrrptton obligatron, whether my partners think that is right or. not, that binds the Fresno Planing Mill Company. If thea have any objections, they can takelit up with me afterwards. The same in taking an order, if delivery is promised in ten days, it is up to my company to make d.elivery and up to everybody in that organization to make it possible to make delivery, whether I was right or wrong, and fhen within the organization let's have some other procedure, if there is any conflict.

"The men have got to be made to see and they can be made to see.through education that every time'they co-operate with the management to procure an extra order from some competitor, they are just insuring their employment that much longer and whenever your men see that, they are going to be just as anxious for these jobs as you are. I can go through the plant and the men know some of the jobs we are figuring on and they are more interested to know whether we landed them than I am, because they know it means employment. That holds good when there is low volume. and when things are going.good. You should develop plant loyalty and co-operation between different departments. If your lumber department is trying to see if they can cut the sash and door man and hold him back by not supplying material-why we would fire any and every man that won't co-operate with everv othbr man. In running a detail plant, we have to overlap from one department to another. Our machine for cabinet work is in the sash and door department. Not long ago I went to the sash and door foreman and asked him about a certain job and he said he couldn't get any- thing through because the cabinet men wanted to use the machine all the time. I told him that the cabinet department was furnishing the cabinet work on the same job that he was furnishing the doors and the contractor didn't care anything about the dispute. What he wants is the work on this job and that it was just as important that he have the cabinet work as for him to have the doors. and that it was up to those two fellows to co-operate. They came through, and I believe that is possible in any organization. It takes somebody at the head of things. Nobodv can make deliverv on certain days, by turning a hundred orders out into the mill and letting every man in the mill decide which should be made first. Somebody has got to route that stufi through the mill.

"Another thing that happens in some plants, in lhe smaller olanls *they don't have enough office organization that can deal with trade over the counter and thev send the contractors. into the mill and let'them talk with the benclr and sticker men, tryirtg to find out when work will be out. No contractor goes through my plant. He gets his information over the counter for two reasons. You send a contractor out in the factory; the superintendent is a little bit grouchy and he insults the contractor. An office man is trained to take that shock and we take a lot of abuse that we don't like to take. We go out in the factory and tell the superintendent he has to have the stuff. He blows up and says it can't be done. I keep talking to him until he decides it can be done. The contractor don't know about that conversation, AII he knows is that he has my word that the stufi will be delivered at that time.

"Organization has a lot to do with efficiencv and profits. We say cost systems are too complicated, but this isn't complicated and we can use horse sense. When I had my first cost system put in, the accountant said that he didn't want to put in any system that would interfere with the way I had been running, because he said I had been running on judgment and horse sense and that he would have to tie into that, or else I would be floundering around, and he did that thing.

"I could give you three or more points, but those three things do cause tremendous losses and can be eliminated without verv much trouble."

Mr. H. L. Martin, of the Mortgage Guarantee Company, Los Angeles, spoke on "Ethics."

The next meeting of the Institute will be held at Oakland, on Thursday and Friday, Thanksgiving week.