A lot of logistics professionals use the terms warehouse and distribution center interchangeably. Some even say that “there is effectively no difference between a warehouse and a distribution center.” So, how different is a distribution center from a warehouse? Let me tell you upfront that they are as diverse as a modern 21st century supply chain is from a traditional supply chain.
The simple rule in traditional supply chains was to store the “maximum possible quantity of every product, everywhere, every time.” This rule had to be followed because of the supply chain’s lack of information flow and planning mechanisms.
Bill Carston, warehouse selector, Deliver Group Company
Supply chains have evolved and are much different from what they used to be, say 2-3 decades back. Modern supply chains equipped with better information & intelligence can predict product demand well in advance, plan accordingly and deliver the items close to when needed.
You now know the stark difference between a warehouse and a distribution center and how the evolution happened over time. Does this mean that warehouses no longer exist, or they don’t serve any purpose? You will be mistaken if you believe that. Warehouses still exist and serve a purpose.
A good example would be how inventory is pre-built months to meet the high seasonal demand and is stored in typical warehouses before being sent to a distribution center for customer service. However, the importance of warehouses in the supply chain has gone down, and the distribution centers have now emerged as the nerve centers of modern supply chains.