If you are new to the manufacturing and distribution industries or are not familiar with them, you may use the terms “warehouse” and “distribution center” interchangeably, however, these two serve different functions in the supply chain.
Keep reading to learn more about the difference between a warehouse and a distribution center.
What a Warehouse and Distribution Center Have in Common
In order to understand what is the difference between a warehouse and a distribution center, it is important to understand what they do actually have in common.
For both warehouses and distribution centers, goods are received, stored, managed, pulled for orders, and shipped. Additionally, both warehouses and distribution centers often look the same with aisles of products or raw materials and staff in place to receive product or inventory, count and store the products, manage logistics, pull for orders, and eventually assist in shipping out the orders.
Additionally, both warehouses and distribution centers may benefit from implementing intelligent, cloud-based ERP and CRM solutions that address business pain points and help streamline business processes.
The Difference Between a Warehouse and Distribution Center
Since we have addressed the few things that a warehouse and distribution center have in common, we can now look at the difference between a warehouse and a distribution center.
In an oversimplified way, a warehouse is the building used to store goods or products while a distribution center is a warehouse or other specialized building which is stocked with products and goods that will be redistributed to retailers, to wholesalers, or directly to consumers. In other words, a distribution center could be a warehouse, but a warehouse in and of itself cannot be a distribution center.
The function that truly sets a distribution center apart from a warehouse is that it processes and fulfills orders while a warehouse does not.
While many people continue to use the terms warehouse and distribution center interchangeably, they have very unique characteristics despite a few similarities.
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