Few homes are built today that do not incorporate equipment made by Nortek, the Providence-based manufacturer of building products that enjoyed $776 million in sales in 1995.
Shoppers at Home Depot are familiar with Nortek's line of bath and kitchen fans and range hoods marketed under the name Broan. Shoppers at Sears can find Nortek's products being sold under the name Kenmore. And many other Nortek products will be appearing in do-it-yourself retail stores&such as Home Depot, Payless Cashways, and Lowe's&as consumer trends turn away from the traditional wholesalers and toward home centers. Today, more than 5,000 employees work in Nortek's 14 operating companies, which have factories throughout the world. Nortek's stock is traded on the New York Stock Exchange.
A major product area for the company is air conditioning for the manufactured housing sector. Essentially, manufactured houses are mobile homes that do not move. The homes are constructed in one or two pieces&-- with the appliances built in&-- and then delivered to the site. In 1995, 340,000 such homes were shipped, mostly to destinations in the South.
Origins
Founded in Providence in 1967 Nortek was reorganized in 1990 by Richard L. Bready, the
company's current chairman and CEO.
Bready set a course designed to produce stable growth for Nortek, which was then broadly diversified, by restructuring to focus on three core businesses: residential building products, air conditioning and heating products, and plumbing products. Subsidiaries that did not fit into Bready's strategic plan were sold, and he initiated a program of strategic acquisitions designed to increase the company's market share in its strongest areas.
Bready says the company's strategy is simple "Our challenge is to continue to have the best prices and the best products in each of the industries where we compete."
To sustain the competitive, Nortek managers think of improvement as an ongoing operation. "Every business is more competitive today than it was 10 years ago," says Bready. "Today, you have to have to continuously improve both products and costs. If you don't, someone else will. That's our philosophy."
New Initiatives
To accomplish its goal, Nortek has embarked on two major initiatives: streamlining
distribution and improving the manufacturing process.
The first initiative, "design flow technology," reduces inventories or maintains them at existing levels while giving the customer better distribution services.
"We require the vendors who supply us with raw materials and component parts to provide precertification of quality so we can eliminate incoming inspections," Bready explains. "The vendor has already done the inspection so we can bring the product directly to our production lines and, in turn, supply our completed products to our customers with no delays and without increasing costs."
The second initiative is a program designed to simplify manufacturing and reduce the number of parts in every product. "Each time you handle a bolt or a screw, it costs money," says Bready. "Therefore, we want to have as many common parts as possible so we can reduce the number of parts and operations, but still have a well-designed product."
Growth Prospects
In fact, Bready sees the HVAC (heating, ventilation, and air conditioning) market as a
growth sector for the company. Nortek's domestic HVAC subsidiary, Nordyne, already
produces a line of domestic air conditioners and furnaces that, for many years, has
dominated the manufactured housing market, which represents more than half of the U.S.
furnace market. Now, Nordyne is rapidly gaining share in the traditional site-built new
home construction market. "We've grown from virtually no sales to about $80 million
in just four years," says Bready. "We're continuing to add distribution, we're
increasing our product offering, and we expect to see that area grow in double digits over
the next four to five years."
In addition to heating, cooling, and ventilation products, Nortek manufactures ceramic bathroom fixtures through its Universal-Rundle subsidiary. Universal-Rundle was a leader in the development of low water-consumption toilets as well as ceramic disc technology for faucets and pressure balanced valves (PBV). These valves minimize the risks of sudden changes in water temperature when, for example, someone is taking a shower and someone else in the house turns on hot or cold water. With operations in Pennsylvania, Iowa, Texas, and Georgia, Universal-Rundle also makes and sells bathing systems, whirlpools, and bath furniture.
Other Nortek subsidiaries include the Aubrey Manufacturing unit (Illinois), which produces bathroom cabinets, mirrors, and light fixtures. Jensen Industries (California) makes and sells marbleized tops and vanities. Linear Corporation (California and Hong Kong) manufactures security devices. Moore-O-Matic (California and Wisconsin) makes garage door openers. M&S Systems (Texas and Mexico) manufactures built-in music intercoms, cassette and CD players, central vacuum systems, audio speakers and controls, and home automation systems.
From its home in Providence, Nortek continues to improve and expand its product offerings in high-growth markets. Whether through longer-lasting, more stylish bath fixtures, central air conditioning and heating systems for homes, range hoods, or garage door openers, Nortek is dedicated to delivering products that enhance the living and working environment.