Home Depot 2007 Annual Report Download - page 19

operated 30 lumber distribution centers in the U.S., Canada and Mexico, and 39 conventional distribution centers located in the U.S., Canada and
Mexico. At the end of fiscal 2007, we also operated eight transit facilities in the U.S. and Mexico to receive and consolidate store merchandise
orders from suppliers for delivery to our stores.
In fiscal 2007, approximately 20% of the merchandise shipped to our U.S. stores flowed through the distribution centers, and about 20% through
the transit facilities. The remaining merchandise was shipped directly from suppliers to our stores.
During fiscal 2007, we introduced improved flow-through distribution processes in an existing U.S. transit facility by converting it to a Rapid
Deployment Center ("RDC"). RDCs allow for aggregation of store product needs to a single purchase order, and then rapid allocation and
deployment of inventory to individual stores upon arrival at the center. This process allows improved transportation, simplified order processing
at suppliers, and reduced lead time from store product need determination to replenishment. We opened a second RDC facility in January 2008.
We plan to open several more RDCs in the U.S. over the next few years to increase our central distribution capabilities and product flow-
through.
In addition to replenishing merchandise at our stores, we also provide delivery of in-stock and special order product directly to our customers.
Associates.
At the end of fiscal 2007, we employed approximately 331,000 associates, of whom approximately 26,000 were salaried, with the
remainder compensated on an hourly or temporary basis. Approximately 67% of our associates are employed on a full-time basis. We believe
that our employee relations are very good. To attract and retain qualified personnel, we seek to maintain competitive salary and wage levels in
each market we serve.
Intellectual Property.
Through our wholly-owned subsidiary, Homer TLC, Inc., we have registered or applied for registration, in a number of
countries, for a variety of internet domain names, service marks and trademarks for use in our businesses, including The Home Depot®;
Hampton Bay® fans, lighting and accessories; Glacier Bay® toilets, sinks and faucets; Pegasus® faucets and bath accessories; Commercial
Electric® lighting fixtures; Workforce® tools, tool boxes and shelving; and www.doitherself.com. We have also obtained and now maintain
patent portfolios relating to certain products and services provided by The Home Depot, and continually seek to patent or otherwise protect
selected innovations we incorporate into our products and business operations. We regard our intellectual property as having significant value to
our business and as being an important factor in the marketing of our brand, e-
commerce, stores and new areas of our business. We are not aware
of any facts that could be expected to have a material adverse effect on our intellectual property.
Quality Assurance Program. We have both quality assurance and engineering resources who oversee the quality of our directly imported
globally-sourced and proprietary products. Through these programs, we have established criteria for supplier and product performance that are
designed to ensure our products comply with federal, state and local quality/performance standards. These programs also allow us to measure
and track timeliness of shipments. These performance records are made available to the factories to allow them to strive for improvement. The
program addresses quality assurance at the factory, product and packaging levels.
Environmental, Health & Safety ("EH&S").
We are committed to maintaining a safe environment for our customers and associates and
protecting the environment of the communities in which we do business. Our EH&S function in the field is directed by trained associates
focused primarily on execution of the EH&S programs. Additionally, we have an Atlanta-based team of dedicated EH&S professionals who
evaluate, develop, implement and enforce policies, processes and programs on a Company-wide basis.
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