Elkay Manufacturing is one of Colorado’s foremost manufacturer and provider of major domestic appliances. The company sells its commodities under the LG & Bosch brand names. Elkay was founded in the year 1947. The company was one of the first to manufacture a new line of electric stoves in pacific north-west during the early 1950’s. Over the past decade, Elkay has been among the top companies in appliance manufacturing, with a wide range of kitchen and bath products being sold domestically and abroad. A reciprocal agreement with Procter & Gamble, sees the latter providing advertising and marketing assistance under contract. Elkay provides the consumer a full range of kitchen and laundry appliances, and also participates in the central air conditioner market.
The company’s head office is in Denver, Colorado. It operates three factories at the following locations: Colorado Springs, Aspen, & Corinth. All factories have been accredited with ISO 9001-2009 certification. For the year 2015, Elkay noted gross revenue at just over 168 million, with over 300 employees, and presently holds a strategic position in the major appliance market. Elkay provides exports to many international markets, including Europe and Asian. What Elkay lacks however is a reliable service company, that can service commercial and residential customers in the north American market, thus the decision to acquire Merrick Services Group Ltd. With the acquisition of Merrick, Elkay will be free to concentrate on the manufacturing and distribution end, whilst Merrick fulfills the majority of the service work in the kitchen appliance area.
Merrick Services Group:
Emphasis on timing and quality has enabled Merrick Services Group Ltd to set itself apart in an industry that often has customers recommending it to others. The Company was founded in 1992 with the express purpose of bridging the gap between the service expected and the service delivered in the home appliance industry. With sales just over 45 million for the year 2016 and over close to 100 employees trained in the services industry specifically with Elkay appliance products, Merrick is well positioned to enhance margins in the challenging services market. A perception of service quality is a result of a comparison between what a consumer considers the service should be and their perception about the actual performance offered by a service provider. Service quality that is experienced by a customer is experienced based on two dimensions technical and functional which is moderated by the company image. The functional dimension looks at the way a service is provided, namely courtesy, attention, promptness and professionalism whereas the technical dimension of service quality refers to the result of the service. In all these areas of service examined both functional and based on perception of the customer, Merrick was graded better than its leading competitors.
Management has embarked on a further growth strategy for Merrick group and the following focus areas to be implemented to ensure the group continues to provide improved shareholder value including; Improved value added services to our customers, implementation of sustainable cost savings in the upcoming financial year to improve stockholding holdings, Reducing the working capital requirement to improve the liquidity of the company.
Overall corporate structure after the acquisition of Merrick as of January 1, 2017, will be as follows,
* Non-executive directors provide the board with advice and experience that is independent of management and the executive. The presence of independent non-executive directors on the board, and the critical role they play as board representatives on key committees, ensures that the Company’s interests are served by impartial views that are separate from those of management and shareholders.
Research indicated both companies incorporated TQM practices into their business. Elkay provided incentives to their employees to maintain quality control, with Merrick providing immediate feedback from their customers in the form of surveys and follow up communication.
The objective of the process maps was to gain an understanding of both the process, management, and note parallels between the two companies. where applicable. Merrick, being the smaller of the two companies could benefit from streamlining its processes to gain efficiency and to eliminate duplication. Services were illustrated based on the assumption that both companies were providing all the human resources and equipment. At present, Elkay was contracting its warranty and repair services to multiple contractors, in addition to maintaining a small residual repair force for defective equipment brought off the assembly line.