CDW 2004 Annual Report Download - page 11

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Custom Configuration. We offer custom configuration services such as the installation of accessories and
expansion products, loading of software, imaging for custom applications and configuration of network
operating systems. These services are performed in a configuration center within our distribution center. Our
custom configuration services benefit our customers by reducing the cost and time necessary to deploy new
products into their existing technology environment.
Technical Support. Our technical staff is well-trained and maintains high levels of professional
certification from product manufacturers. We employ a technical staff of more than 160 with over 440
manufacturer certifications to assist our customers with technical questions and issues during regular business
hours. We offer technical support services by telephone 24 hours a day, 7 days a week. We believe that our
commitment to service at the time of sale and after the purchase maximizes sales opportunities and encourages
repeat customers.
Information Technology. We use proprietary, real-time information technology systems which centralize
the management of key functions and generate daily operating reports enabling management to identify and
respond quickly to internal changes and to provide high levels of customer satisfaction. We also monitor trends
in the technology industry. We integrate our real-time systems with our Web sites, CDW.com, CDWG.com,
macwarehouse.com and CDW.ca, providing real-time information for our customers.
Effective Inventory Control. Our inventory tracking system, purchasing system, cycle counting system and
use of vendor stock balancing and price protection programs allow us to minimize our investment in inventory
and to reduce inventory discrepancies and the risk of obsolescence while meeting customer needs by shipping
orders generally on a same-day basis.
High Quality Coworkers. We strive to attract, retain and motivate high quality coworkers and provide our
coworkers with competitive compensation and incentives designed to maximize performance and productivity.
Our objective is, whenever possible, to promote coworkers from within the Company to positions of increased
responsibility. Examples of rewards and motivations for our coworkers include short-term incentive programs,
stock-based compensation and an on-site childcare and fitness center facility at our Vernon Hills, Illinois
headquarters.
Product Offering
We sell multi-brand computers and related technology products, including hardware and peripherals,
software, accessories and other products, for use on a variety of technology operating platforms, including
Microsoft, Apple, Linux, Novel, Unix and others.
We continually seek to expand and improve our relationships with manufacturers as well as increase the
number of products which we are authorized to sell.
Purchasing and Vendor Relationships
We purchase products for resale from manufacturers, distributors and other sources, all of whom we
consider our vendors. During 2004, we purchased approximately 50% of the products we sold directly from
manufacturers and the remaining amount from distributors and other sources. We believe that effective
purchasing from a diverse vendor base is a key element of our business strategy. For the year ended December
31, 2004, purchases from distributors Ingram Micro and Tech Data represented approximately 19% and 16%,
respectively, of our total purchases. Additionally, in 2004, sales of products manufactured by Hewlett-Packard
comprised approximately 28% of our total sales.
Our marketing and purchasing staffs work together to identify reliable, high-quality suppliers of products,
then actively negotiate to achieve the lowest possible cost and expand vendor incentive programs. We seek to
establish strong relationships with our vendors, and employ a policy of paying vendors within stated terms and
taking advantage of all appropriate discounts. Several of our leading vendors, such as Hewlett-Packard, IBM
and Microsoft, have full-time product specialists on-site at our facilities.