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Distribution center
A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order processing element, of the entire order fulfillment process. Distribution centers are usually thought of as being demand driven. A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation. For example, a "retail distribution center" normally distributes goods to retail stores, an "order fulfillment center" commonly distributes goods directly to consumers, and a cross-dock facility stores little or no product but distributes goods to other destinations.
Distribution centers are the foundation of a supply network, as they allow a single location to stock a vast number of products. Some organizations operate both retail distribution and direct-to-consumer out of a single facility, sharing space, equipment, labor resources, and inventory as applicable.
A typical retail distribution network operates with centers set up throughout a commercial market, with each center serving a number of stores. Large distribution centers for companies such as Walmart serve 50–125 stores. Suppliers ship truckloads of products to the distribution center, which stores the product until needed by the retail location and ships the proper quantity.
Since a large retailer might sell tens of thousands of products from thousands of vendors, it would be impossibly inefficient to ship each product directly from each vendor to each store. Many retailers own and run their own distribution networks, while smaller retailers may outsource this function to dedicated logistics firms that coordinate the distribution of products for a number of companies. A distribution center can be co-located at a logistics center.
A large distribution center might receive and ship more than ten thousand truckloads each year, with an individual store receiving from only a couple of trucks per week up to 20, 30, or more per week. Distribution centers range in size from less than 50,000 square feet (5,000 m2) to the largest identified in 2015 approaching 3 million square feet (300,000 m2).
Goods (products) arrive and are stored in a distribution center in varying types of storage locations and containers suited to the product characteristics and the amount of product to be transported or stored. These types of locations and containers have specific industry-accepted names. Specialized pieces of equipment (material handling equipment, or MHE) are used to handle the various types of containers. The following is a list of some of the names and characteristics of common storage containers:
Another way to look at a distribution center is to see it as a production or manufacturing operation. Goods arrive in bulk, they are stored until needed, retrieved, and assembled into shipments. The efficient processing of a distribution center can greatly impact the final price of the product delivered to the end user. Efficient processing not only directly impacts the cost of goods through reduced labor, but it also indirectly impacts the cost of goods through reduced inventory. Inventory represents an investment with its associated investment interest or inventory carrying cost. Reducing the processing time of order processing can directly reduce the amount of inventory necessary to be stocked in the operation (see demand chain management).
The most efficient method of distribution would be to ship a full truckload or railcar directly from the manufacturer to the retailer. The next most efficient method would be to ship a full truckload to a distribution center, unload full pallets of products, and immediately load the pallets onto trucks destined for individual stores. Both of these methods can be used only on very high-volume items. Most products cannot be delivered in this manner, and pallets or even individual boxes must be broken down and divided.
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Distribution center AI simulator
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Distribution center
A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order processing element, of the entire order fulfillment process. Distribution centers are usually thought of as being demand driven. A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation. For example, a "retail distribution center" normally distributes goods to retail stores, an "order fulfillment center" commonly distributes goods directly to consumers, and a cross-dock facility stores little or no product but distributes goods to other destinations.
Distribution centers are the foundation of a supply network, as they allow a single location to stock a vast number of products. Some organizations operate both retail distribution and direct-to-consumer out of a single facility, sharing space, equipment, labor resources, and inventory as applicable.
A typical retail distribution network operates with centers set up throughout a commercial market, with each center serving a number of stores. Large distribution centers for companies such as Walmart serve 50–125 stores. Suppliers ship truckloads of products to the distribution center, which stores the product until needed by the retail location and ships the proper quantity.
Since a large retailer might sell tens of thousands of products from thousands of vendors, it would be impossibly inefficient to ship each product directly from each vendor to each store. Many retailers own and run their own distribution networks, while smaller retailers may outsource this function to dedicated logistics firms that coordinate the distribution of products for a number of companies. A distribution center can be co-located at a logistics center.
A large distribution center might receive and ship more than ten thousand truckloads each year, with an individual store receiving from only a couple of trucks per week up to 20, 30, or more per week. Distribution centers range in size from less than 50,000 square feet (5,000 m2) to the largest identified in 2015 approaching 3 million square feet (300,000 m2).
Goods (products) arrive and are stored in a distribution center in varying types of storage locations and containers suited to the product characteristics and the amount of product to be transported or stored. These types of locations and containers have specific industry-accepted names. Specialized pieces of equipment (material handling equipment, or MHE) are used to handle the various types of containers. The following is a list of some of the names and characteristics of common storage containers:
Another way to look at a distribution center is to see it as a production or manufacturing operation. Goods arrive in bulk, they are stored until needed, retrieved, and assembled into shipments. The efficient processing of a distribution center can greatly impact the final price of the product delivered to the end user. Efficient processing not only directly impacts the cost of goods through reduced labor, but it also indirectly impacts the cost of goods through reduced inventory. Inventory represents an investment with its associated investment interest or inventory carrying cost. Reducing the processing time of order processing can directly reduce the amount of inventory necessary to be stocked in the operation (see demand chain management).
The most efficient method of distribution would be to ship a full truckload or railcar directly from the manufacturer to the retailer. The next most efficient method would be to ship a full truckload to a distribution center, unload full pallets of products, and immediately load the pallets onto trucks destined for individual stores. Both of these methods can be used only on very high-volume items. Most products cannot be delivered in this manner, and pallets or even individual boxes must be broken down and divided.