What is the difference between a warehouse and a distribution center?

I started my career with responsibility for warehouse planning, among other things. With nearly a dozen local and out-of-the-way buildings storing raw materials and finished goods, I spent more than my fair share of time walking through more than one warehouse or distribution center and walking up and down the aisles lined with racks and shelves.

Later in my career when I entered the retail and logistics sector, the facilities where goods were stored and distributed were referred to as distribution centers. There were the same configurations of racks and shelves as warehouses, and they served both to store goods and to distribute goods.

To the untrained eye, the warehouses and distribution centers looked very similar.

But were they really the same or were they actually very different?

Due to the rapid rise of e-commerce, the distinction between the two establishments has become clearer. There are now thousands of them scattered across the country, serving the needs of consumers worldwide. If you’re managing one anytime soon, you need to know what you’re getting into.

This article will give you a clearer insight into their similarities and differences. Understanding the most fundamental difference between the two facilities will enable you to set clear goals for their operations to make managing a facility a success.

What is a camp?

A warehouse is simply a building where goods are stored.

That’s about as simple and basic as a definition can get. But I think it’s too easy.

It goes without saying that in order to get the goods into the warehouse, the goods must be received, placed on racks or shelves, counted and tracked, and somehow pulled (or picked) to ship the goods out of the docks in.

In this case I prefer the definition offered by businessdictionary.com that a warehouse is the “performing administrative and physical functions related to goods and materials”. These functions include receiving, identifying, verifying, putting away, retrieving for issue, etc.”

This is consistent with my experience of what a “warehouse” is. Most notably, a warehouse is not considered a facility where the goods are transformed or altered in any way. Goods are only brought into the building, stored in it, or moved out of the building.

In addition, I’ve also seen a few instances where a warehouse was used for a purpose other than storing products, making it versatile. These rentable warehouses can host events, be a location for films or photo shoots, or other temporary activities.

What is a distribution center?

According to Wikipedia “A distribution center for a range of products is a warehouse or other specialized building stocked with products (goods) to be redistributed to retailers, wholesalers or directly to consumers. A distribution center is a key part, the fulfillment element, of the overall order fulfillment process. A distribution center can also be referred to as a warehouse, distribution center, fulfillment center, cross-dock facility, bulk break center, and package handling center.”

This is certainly a broader definition. It is worth noting here that a distribution center can be a warehouse, but a warehouse cannot be a distribution center. It does a lot more than what is associated with a warehouse.

The “main function” of the distribution center is “order processing” or “order fulfillment”.

This makes sense because, particularly in retail, a distribution center is the facility where orders are received, goods are picked/picked up according to those orders, and the items are packed for shipment to stores, consumers, or other channels.

In addition, a distribution center logistics operation may also involve some level of light assembly, processing, testing, or repackaging prior to fulfilling orders.

Is a warehouse really different from a distribution center?

For many people, the terms warehouse and distribution center are synonymous.

In both cases, goods are received, stored, managed, picked or pulled and shipped. That’s a fact.

When distinguishing between the two terms, it is usually either the point at which a distribution center fulfills orders for individual end users and/or some level of processing and transformation of goods and the provision of additional services.

I’ve also heard some people point out that a warehouse really only involves or allows for the long-term storage of goods. There may or may not be a customer for these goods and there is relatively little activity. I think that can be true, but not exclusively. I know of warehouses that are far more active than this chart suggests.

Alternatively, a distribution center is assumed to involve the relatively faster transhipment and movement of goods. And there is definitely a customer or channel that these goods are destined for.

Nonetheless, both facilities operate in a manner that maintains the quality of the items stored within and provides workers with a good and safe working environment. Therefore, safety is an aspect that must be given priority in these large installations. For one, ensuring proper ventilation by adding Make-Up Air units is critical to improving the air quality in your facility.

If your exhaust systems are removing a lot of air, that air should be replaced to keep the interior in favorable condition – which requires the use of makeup air units. This ensures a healthy and safe working environment in your facility and ensures that the stored products are free from airborne contaminants such as fumes and dust.

Conclusion

While many people continue to use the terms warehouse and distribution center interchangeably, it can be argued that despite their similarities, they have very unique characteristics.

To further complicate the discussion, it is worth noting that these types of operations can also be referred to as fulfillment centers, solution centers, logistics facilities, and more.

For many, regardless of the distinctions outlined here, these operations are referred to by the name they have been given over time.

Is that just semantics?

Or is there really a difference between a warehouse and a distribution center?

Originally published June 4, 2019.

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