Warehousing and Distribution

Specialized storage is required for nearly every product available on the market today. Product marketing and presentation are only effective if the product can be delivered to the customer quickly and in good condition. The storage and distribution of product is a critical link in the product supply chain.

Warehousing & Distribution

Simply put, a warehouse is a building in which product is stored in a static manner- often for weeks or months at a time. Warehouses are focused on product preservation and storage. A distribution centre is a building in which product is received and stored temporarily before being sorted and shipped to the retailer or customer. Where warehouses are long-term storage, distribution centres are focused on moving product to the end customer. Warehouses are static storage; distribution centres are the centre of the shipping and receiving aspect of the business. A typical distribution centre serves multiple retail markets, opening up opportunities for companies to increase their networking abilities.

How a distribution centre serves a business

Unlike a warehouse, a distribution centre is a short-term storage solution. Product is received, placed on the distribution centre floor, following a pick and pack management system, and distributed as ordered by retail outlets and customers. A distribution centre typically uses higher manpower in order to sort and re-distribute the product in the most efficient manner. Product comes in from the manufacturer, is unpacked and, depending on the customer’s requirements, repackaged before delivery.
A distribution centre offers some valuable services, both to the manufacturer and to the retailer. Value-added services like repackaging allow companies to present their own logo to the end customer, increasing brand recognition and customer loyalty. Cross-docking, order fulfillment, labeling and stock control are all important aspects of a distribution centre’s functions.

Since the distribution centre’s focus is on the customer, service is a high priority, creating strong relationships between the manufacturer and retail outlets. Relationships drive business. Distribution centres allow for greater networking opportunities for companies. A distribution centre creates a strong link between the manufacturer and retailer. Finally, a distribution centre is run with a much higher emphasis on technology and efficiency than a typical warehouse.

How warehousing serves a business

Warehousing is usually reserved for out-of-season product, which needs to be stored for weeks or months at a time until the demand is sufficient to create sales and profit. Holiday-specific items are a good example. Warehousing allows a manufacturer to avoid loss if sales are lower than expected during a term, stockpiling items that will be in demand at a later date. Warehousing is more cost-effective than long-term storage in a distribution centre.

How a 3PL serves a business

A third-party logistics, or 3PL company serves businesses by providing warehousing and distribution centre services. Using a 3PL company allows the company to enjoy significant savings over creating and maintaining their own storage and delivery infrastructure. Since a quality 3PL company works with the company on marketing as well as storage and delivery systems, outsourcing distribution logistics is an excellent way to increase efficiency.

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