Auto-summarization H/W question

So what is this fuckery that is confusing me?

A class C network: Network.network.network.node

If we have networks:

192.168.16.0 through 192.168.31.0 and we want to summarise them, well

1. We look at the block size. In this case, it's 16 which fits nicely

2. The summary network address is the first IP used, in this case 192.168.16.0

3. The summary mask is 240 (256 - 16 = 240)

So, our it would be

192.168.16.0/255.255.240.0

Everything makes sense, except one thing.

When subnetting a class C address, shouldn't the 4th octet be manipulated, not the 3rd? Or am I misunderstanding something? Is this process different than "normal" subnetting?