Gateway Outlines New Fulfillment Model For Its Rapidly Growing Product Line

Previously Discussed Outsourcing Review Leads to Plan Providing Greater Flexibility, Faster Delivery Times, Lower Costs
Measures Expected to Help Lead to $115-$130 Million in New Annualized Savings;
Transformation Expense of $120-$160 Million to be Taken in Coming Quarters
POWAY, Calif., Sept. 3 /PRNewswire-FirstCall/ — Gateway, Inc. said today that it is transforming the way it handles product sourcing, logistics, support and service — creating a more efficient platform to support its overall transformation into a branded integrator of personalized technology solutions.
The new product-fulfillment model delivers on one of the company’s core
transformation milestones announced at its May 8 analyst meeting and is
expected to be operational by mid-November, in time for the holiday selling
season. It is based on using strategic partners and collaborative planning
with suppliers, as well as consolidating in-house resources, to make the
company leaner and nimbler as it dramatically broadens its array of
Gateway-branded products.
“We have spent the past six months transforming our products, our retail
network and our marketing efforts,” said Gateway chairman and chief executive
Ted Waitt. “But we’re also completely re-designing our sourcing, logistics,
service and support systems to create a more efficient infrastructure as the
backbone of the new Gateway.”
Combining Gateway’s manufacturing and service capabilities with those of
multiple manufacturing and service partners in the U.S. and overseas will
enable it to obtain the best combination of cost and quality for PCs and
consumer electronics. It will also enhance flexibility, allowing the company
to more efficiently design, launch, sell and support the new products that its
customers demand, while allowing for more efficient management of its
traditional build-to-order and configure-to-order PC systems.
Its plan to establish regional hubs for service and shipping purposes will
quicken response time for customer orders and service, while lowering
logistics costs. The company will continue to explore other areas where
outsourcing can be successfully implemented to drive efficiency and
performance improvements.
As an initial part of this plan, Gateway will close its Hampton, Virginia
manufacturing complex on Sept. 30. While Gateway will continue to maintain a
presence in North Sioux City, South Dakota, it will reduce staffing numbers at
that location and at its Sioux Falls, South Dakota facility as certain
responsibilities shift to partners and other facilities.