EMC 2010 Annual Report Download - page 9

Table of Contents
Manufacturing and Quality
We conduct operations utilizing a formal, documented quality management system to ensure that our products as well as services satisfy customer
needs and expectations. The quality management system also provides the framework for continual improvement of our processes and products. This system
is certified to the ISO 9001 International Standard. Several additional ISO 9001 certifications are maintained for sales and service operations worldwide. We
have also implemented Lean Six Sigma methodologies to ensure that the quality of our designs, manufacturing, test processes and supplier relationships are
continually improved. Our storage systems' manufacturing and test facilities in Massachusetts, North Carolina and Ireland are certified to the ISO 14001
International Standard for environmental management systems. EMC's Franklin, Massachusetts, Apex, North Carolina and Cork, Ireland manufacturing
facilities have achieved OHSAS 18001 certification, an international standard for facilities with world-class safety and health management systems. We also
maintain Support Center Practices certification for our primary customer support centers. These internationally-recognized endorsements of ongoing quality
and environmental management are among the highest levels of certifications available.
We maintain a robust Supplier Code of Conduct, actively manage recycling processes for our returned products, have won an Environmental Steward
Award and are also certified by the Environmental Protection Agency as a Smartway Transport Partner.
Our products are assembled and tested primarily at our facilities in the United States and Ireland or at global manufacturing service suppliers. We work
closely with our suppliers to design, assemble and test product components in accordance with production standards and quality controls established by us.
Our software products are designed, developed and tested primarily at our facilities in the United States and abroad. The products are tested to meet our
quality standards.
Raw Materials
We purchase many sophisticated components and products from one or a limited number of qualified suppliers, including some of our competitors. Our
products utilize industry-standard and semi-custom components and subsystems. Among the most important components that we use are disk drives, high
density memory components, microcontrollers and power supplies. While such components are generally available, we have experienced delivery delays from
time to time because of high industry demand or the inability of some vendors to consistently meet our quality or delivery requirements.
Research and Development
We continually enhance our existing products and develop new products to meet changing customer requirements. In 2010, 2009 and 2008, our
research and development ("R&D") expenses totaled $1,888.0 million, $1,627.5 million and $1,721.3 million, respectively. We support our R&D efforts
through state-of-the-art development labs worldwide. See Item 2, Properties.
Backlog
We produce our products on the basis of our forecast of near-term demand and maintain inventory in advance of receipt of firm orders from customers.
We configure to customer specifications and generally deliver products shortly after receipt of the order. Service engagements are also included in certain
orders. Customers generally may reschedule or cancel orders with little or no penalty. We believe that our backlog at any particular time is not meaningful
because it is not necessarily indicative of future sales levels.
Competition
We compete with many companies in the markets we serve, including companies that offer a broad spectrum of IT products and services and others that
offer specific information storage, protection, security, management and intelligence or server virtualization products or services. We believe that most of
these companies compete based on their market presence, products, service or price. Some of these companies also compete by offering information storage,
information governance, security or virtualization-related products or services, together with other IT products or services, at minimal or no additional cost in
order to preserve or gain market share.
We believe that we have a number of competitive advantages over these companies, including product, distribution and service. We believe the
advantages in our products include quality, breadth of offerings, performance, functionality, scalability, availability, interoperability, connectivity, time-to-
market enhancements and total value of ownership. We believe our advantages in distribution include the world's largest information infrastructure-focused
direct sales force and a broad network of channel partners. We believe our advantages in service include our ability to provide our customers with a full range
of expertise before, during and after their purchase of solutions from us or other vendors.
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