The difference between Warehouse and Distribution Center (2024)

Most of supply chain professionals even experts say there is no difference between warehouse and distribution center moreover use both terms interchangeably.

absolutely there is a difference. Briefly we can say distribution center the new generation and the evolution of warehouse

In the past the mission of the warehouse is to store the maximum quantity of materials or products due to lake of information technology and demand forecasting, but now for complex operations, distribution center was born.

The next two pictures explain a pretty good idea of what each of these facilities are capable of doing. Both have important jobs, however, both are completely different .

There are 5 main differences as illustrated below:

1. The purpose: Warehouse is used to store possible maximum quantity of materials for long periods whilst distribution center stores only the required quantity of the right product in the right place at the right time.
2. value-add services: Warehouse doesn't offer value-add services just dedicated for storing pallets.but distribution center offers other operations such cross-docking, order fulfillment, mixing products, packaging, co-packing etc......
3. processes velocity:A distribution center stores products for relatively lesser periods compared to a warehouse. So the flow velocity through the distribution center is much greater than the flow velocity through a warehouse.
4. Customer focus: A distribution center is customer-centric and is the bridge between a supplier and its customers. While the role of a warehouse is to store products efficiently, the role of distribution centers is to efficiently meet customer requirements.
5. Complexity: The operations at a distribution center is much more complex than that at a warehouse. As a result, the distribution centers are equipped with latest technology for order processing, warehouse management, transportation management etc.