July 26, 2016 Color-Coated Success

Volume 9 | Issue 2

Pinturas Osel delivers creativity and quality following the market’s pace. Susana Baumann reports on how this Mexican company has changed the color of people’s lives since 1950.

The painting products industry has made substantial changes in the last decades. Manufacturers are looking to facilitate applications, increase durability, decrease the time between coatings, and make cleaning easy. Contractors as well as weekend “paint warriors” are seeking that one paint that will make their job easier, faster and look great.These market demands have driven companies to develop new technologies stressing architectural paints and coatings with low maintenance and high resilience. Companies that choose quality as the base of their long-term strategy have raised standards in the industry.

“When Pinturas Osel chose quality as the core of its competitive strategy, that decision changed our production, distribution and commercialization processes,” said Vice President of Marketing and Sales Jaime Lomelin. The decision proved itself right when Pinturas Osel was the only Mexican company in its segment to be presented with the national award to quality in 1992 similar to the Malcolm Baldrige Award. The President of the Republic confers this award to organizations that constitute a role model regarding best practices and product quality.

“We are the only company that guarantees its products in writing. We can do it because our products are technically superior,” said Lomelin. In order to support this statement, Pinturas Osel became the only Mexican member of the Coating Research Group, Inc. an international association of paint and coatings manufacturers dedicated to the benefits of shared research and development, which includes troubleshooting, technical updates, and exchange of information on raw materials, manufacturing and business practices, based in Cleveland, Ohio. As a member of CRGI, Osel shares the highest quality of technical research and development of new products. The company is endorsed by an internationally recognized association of painting and coating manufacturers.

“CGRI has created a beneficial exchange of technological and industry information for those companies that thrive on creating quality and service,” he added.

Pinturas Osel is also associated with Color Systems International – formerly Color Guild International. Color Systems offers the most dynamic and functional color system worldwide, through its brand name Millenium®. “Color Guild not only offers the most extensive and complete color system, but exceptional quality sale aid materials that facilitates our distributors’ job,” said Lomelin.

With such endorsements under its belt, or better yet, inside the tin can, Pinturas Osel is on its way to achieve its main goal of becoming if not the largest, the best painting manufacturer in Mexico. Ten industrial naves covering 21 hectares in Monterrey, Nuevo Leon (Mexico), house the company’s 250-plus plant employees. In addition, the company has three distribution centers (DCs) located in México D.F., Guadalajara, Jalisco and Hermosillo, Sonora. It has created a distribution network of over 10 points of sales, and helped develop numerous independent distributors.

THREE AREAS, ONE STRATEGY
Although Pinturas Monterrey S.A. de C.V. was founded in 1950 by Don Oscar Elizondo López with eight employees and an annual production of 30,000 liters, it was not until 1990 that the commercial opening and market globalization offered by NAFTA brought new ideas to the company. “NAFTA created a well of opportunity that was captured by Elizondo’s sons, the second generation of the family at this point in charge of the company,” said Lomelin.

In order to respond to the new market conditions, the company revised strategies and long-term goals, defining a new company culture that placed quality at its core. The business name was changed to Pinturas Osel S.A. de C.V. in order to reflect the broader scope of activities. “It came up from the acronym of Don Oscar’s name. The change in strategy required a comprehensive restructuring of three main company areas, product manufacturing, distribution and commercialization,” he added.

In order to produce better quality as well as grasp the conditions created by this new environment, Pinturas Osel became an integrated company, producing some of its key raw materials in order to ensure results. “Out of the four painting components, pigment, resins, additives and base, resins are instrumental in defining the quality of the product. Resins define the painting or coating durability, strength and adhesion. We produce our own resins in order to ensure the correct component ratio of the mix,” said Lomelin.

At that time, Pinturas Osel joined Color Guild, which provided a system with over 1,500 colors and hues, being the first Mexican company to bring these standards to the country. The Millenium Color System is a palette of 192 unique families of colors, artistically arranged in six separated groups: colors in white, clear colors, muted colors, shaded colors, neutral shades and bright accents. Each color is arranged with its accompanying complementary, analogous, split complementary, double complementary, monochromatic component and its triadic colors. “You will not find repetitions in this unique system. Besides, the consumer can chose from a large spectrum of combinations and options,” said Lomelin.

In 1991, the company implemented Kanban, a visual communication system that helps coordinate logistic efforts. “Kanban changed our value chain distribution efforts, the way we reacted to and interacted with the market demands. Most companies work with sales projections and a large inventory. The “card-signal” system allows our company to keep inventories at low levels, and promptly respond to consumers’ needs within a 48-hour time frame,” explained Lomelin. The company system is based on a Japanese approach in which upstream activities react in response to the downstream activities. “The push production approach, which most of our competitors use, is based on sales anticipation. Then they forecast the time and amount of purchase and launch authorizations to get ahead these needs,” he said. Pinturas Osel uses the opposite approach, “pull production,” building production on product consumption, which reduces large “dead” inventories and warehousing costs, and keeps the production lines constantly active, without downtime periods.

Kanban cards are organized in a visual system, based on the “use one, make one” premise. Lomelin explains that the Kanban system is ideal for companies such as Pinturas Osel, in which demand is stable within any line of products, identifying the exact amounts and cycle specified by the system. Osel’s central inventory is located in Monterrey, where distributors request merchandise through a “traveling card.” Handling of inventory is satisfactory, based on years of experience working under the system, and new products can be developed in 30 to 45 days.

In 2000, Pinturas Osel increased its installed capacity 150 percent, reaching five million liters a month. “Based on the achievements and growth rate of 25 percent per year in the last three years, our strategic plan for the next five years contemplates doubling our company’s sales volume and presence around the republic,” said Lomelin. The investment focused on the most advanced technology that would ensure the highest quality and hygienic production process, and an automated production line that monitors electronically all activities.

The goals are ambitious, especially because Osel responds solely to the national market, and competition is thorny. The strategic plan includes marketing to the most representative enterprises in Mexico, capturing high volume accounts and increasing clients’ portfolios. Currently, Osel maquila products, and it has done it for a number of years for big superstore chains. “We are not concentrated in the U.S. market, nor do we contemplate that possibility in the next few years, but we may not refuse to consider any offers that would fit into our strategic plan,” said Lomelin.

For now, commercialization is pushed through the company’s own point of sales and independent distributors. “We currently have presence in most states, we need to concentrate efforts in building the Southeast region, and consolidating the rest,”
he added.

Testimonials of Osel’s exclusive independent distributors shown at the company’s Web site talk about the professional experience, high competitive level and prestige in the industry, superior quality of materials and technical support the company offers.

According to Lomelin, exclusive independent distributors find in Pinturas Osel an excellent inventory and service, continuous training and technical support with initial schooling at the Monterrey plant, experience in strategic planning, advertising support, guidance for the sales force, competitive prices and volume discounts. “In addition, the company has made the effort to offer sundry products, such as brushes and rollers, through distributorships. It increases sales opportunities and satisfies clients who make a one-stop shopping experience,” he commented.

PAST CLIENTS, FUTURE CLIENTS
National and international prestigious companies have used Osel’s architectural paintings and coatings to finish and decorate their facilities. Ritz Carlton, Sharp, Canon, Hyundai, IBM, GM, Ford, McDonald’s, Torre Comercial América, Soriana Supermarkets, Plaza Sésamo, Club Industrial Monterrey, among others, have benefited from the company’s expertise, which includes troubleshooting, technical updates, and exchange of information on raw materials, manufacturing and business practices. Construction companies as well as developers prefer Osel’s products for quality and durability, and its written guarantee that is almost unheard-of in the industry.

Lomelin places the company among the top four in the nation, after Comex, Berel, and Sherwin Williams. “Through our business partners, CRGI and Color Guild, we bring to our distributors and clients the latest technology and the most fashionable international trends in color. Due to our business consistency and credibility, our distributors have developed successful businesses and our clients keep coming back,” said Lomelin. Certainly, in Osel’s future, there is a pot of gold at the end of the rainbow.

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