company $200 in devaluation plus shipping. Inouye and his team made a commitment to improved quality and enhanced customer service. By the end of 2003, every customer service call was handled as what the industry terms a “level 3” call, with a technically qualified individual on the receiving end of the call.

eMachines’s extraordinary turnaround is a vivid demonstration of a number of the themes explored in this book. The company started by envisioning the business system as a whole and chose to focus on a very few high-leverage points: distribution, demand forecasting, and customer service. Then, it outsourced everything else in order to focus and limit the moving parts in the business, to act quickly, and to keep costs down. And its fanatical attention to customer activity at the retail level— which generated critical metrics—allowed the company to develop a low-cost, low-risk process for launching new products. Finally, eMachines had a clear vision of business model innovation. There was nothing special about the elements that made the product itself. But Inouye conceived a business model that had the advantages of made-to-order manufacturing in combination with retail distribution, allowing the company to offer a quality product at a lower cost.

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