Zebra Implements New Supply Chain Strategy

Filed in archive News on February 12, 2008

Zebra Technologies Corporation recently announced the details of its new supply chain strategic plan, according to CNN. The company plans to establish regional distribution and configuration centers, consolidate its supplier base, and transfer final assembly of thermal printers to Jabil Circuit , a global third-party electronics manufacturer. These actions are intended to optimize Zebra's global printer product supply chain to improve responsiveness to customer needs and increase Zebra's flexibility to meet emerging business opportunities. This plan supports Zebra's efforts to serve high-growth territories more effectively and extend global industry leadership in specialty printing solutions.

The transfer of final printer assembly operations from Zebra's plants in California and Illinois to Jabil's facility in HuangPu, China, will occur during approximately the next 18 to 24 months. During this period, the company estimates 650 production-related positions will be eliminated. Zebra will continue to maintain operations in California and Illinois, including engineering design centers, product management, sales, marketing and administration.

The supply chain optimization plan will result in estimated total costs and charges of $24-$26 million for severance, professional services and other associated non-recurring costs. Of these charges, the company expects to incur approximately $18 million in 2008, with the remaining amount occurring in 2009. The recovery of these costs and expected financial benefits are expected to begin to accrue in 2009.