So, basically the flow velocity through the distribution center is much greater than the flow velocity through a warehouse. A distribution center stores products for relatively lesser periods compared to a warehouse.A warehouse is used for storing products while a distribution center, apart from storing products offers value-added services like product mixing, order fulfillment, cross docking, packaging etc.Now that you know the context, let me tell you the exact difference between a warehouse and a distribution center: The traditional warehouses are not completely fit to cater to this new supply chain rule and this led to the evolution of static warehouses into distribution centers. The new supply chain rule is to have “the required quantity of the right product in the right place at the right time” Modern supply chains equipped with better information & intelligence are able to predict product demand well in advance, plan accordingly and deliver the items close to when they are needed. Supply chains have evolved and are much different from what they used to be say 2-3 decades back. This gave birth to the warehouses which were used for stockpiling inventory and inventory would be shipped out months after it arrived in the warehouse. This rule had to be followed because of lack of information flow and planning mechanisms in the supply chain. The simple rule in traditional supply chains was to store “maximum possible quantity of every product, everywhere, every time” So, how different is a distribution center from a warehouse? Let me tell you upfront that they are as different as a modern 21 st century supply chain is from a traditional supply chain. Some of them even say that “there is effectively no difference between a warehouse and a distribution center”. CONTRIBUTION BY BAIDHURYA MANI – supply chain analytics trainer and author of a bestselling supply chain courseĪ lot of logistics professionals use the terms warehouse and distribution center interchangeably.
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