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Students Corner - 80

Distribution Center

A Distribution Center can also be called a warehouse with some additional tasks. Warehouse is a place of storing products; it is exclusively for storage only which can be used by business-stakeholders like manufacturers, importers and exporters, wholesalers and transport businesses, so on.

Though to many people the difference between a warehouse and a distribution center may not be obvious, the logistics industry, however, makes a valid difference between the two with distinct functions. There are a whole lot of internal operations for a distribution center with some responsibilities to fulfill and a warehouse is not expected to carry them out. Even in terms of structure, there is some difference between the two.  A warehouse can be and is designed to receive goods directly from railways, airports and seaports and it is always equipped with cranes and forklifts essential for moving and organizing goods. Moreover, there are different types of warehouse with some special facilities for some goods like fruits and vegetables; we have already looked into what is called climate-controlled warehouses.  Again, another important fact about the warehouses is that they are meant for storage for a long period; with the result, they may not be of much use for small retailers who do not need store goods for a long period. To achieve a sustainable business, a retailer must sell more products at a greater frequency; the faster the goods move the more is the profit and business for a retailer; therefore for him a warehouse may not be as useful as it is for a wholesaler.

A distribution center is specially designed to store goods for both the retailers and the wholesalers. Once the goods are received, the distribution center re-sends them to a different location as required by the retailers or the whole salers; sometimes, the goods are sent directly to customers. As a matter of fact, a distribution center is an integral part of what is called Order Fulfillment Process particularly for online traders and e-commerce businesses. The general practice is as follows: the retailer, for example, ships products to the distribution center and from there the product is sent to the customer. For the sake of convenience, the distribution centers like warehouses also are often located in easily accessible areas so that the transport of goods will not be an issue. Main roadways and highways are the preferred locations for distribution centers.

Depending on the needs, a business man can choose a warehouse or a distribution center. As said earlier, warehouses for storing goods for long and not to be sent out immediately; business does not demand it.  Distribution centers, on the other hand, are designed to receive and re-send the goods at a faster pace.  In short, the business-need decides the choice whether of a warehouse or of a distribution center.