What is Distribution Center?: Simplified Definition

A distribution Center or DC is a product storage building for storing goods. The Distribution Center is for order fulfillment from which products are sent out for distribution. DC building holds the products prior to sending commodities to wholesale, retail, and customers.

What Is DC?: Technical Definition

ClickPost defines DC (Distribution Centre) as a specialized building to store products, also functioning as fulfillment centers and inventory for redistributing products to wholesale, retail, and customers with additional services like order processing, inventory, and transport management. 

What are the Functions of the Distribution Center?

Distribution centers offer modern technology and fulfillment infrastructure to provide companies with accurate processing and shipping. Some of the functions are:

  • The distribution center is a temporary space for holding up products, which reduces the number of warehouses required in the supply chain.

  • Its primary focus is to allow the inflow and outflow of products through the supply chain without any hiccups.

  • Distribution centers are station posts that break down bulk cargo into smaller groups of commodities that are then processed, packaged, and transported.

  • Distribution centers also function as docking stations where similar products are grouped and packaged before sending them to the required destination. Goods are also docked for transportation within the distribution center and outside it.

  • DC can conveniently function as a facility for primary and secondary assembling and packaging for certain products before sending them out in the supply chain.

  • Returned and exchanged goods are forwarded to the distribution center before sending them to the origin warehouse, where they await reselling or exchange.

What is the Difference Between Warehouse and DC?

  • Warehouses are primarily used for storage, whereas distribution centers, apart from providing storage facilities, offer additional services like order fulfillment, packaging, cross-docking, assembly station, packaging, etc.

  • Distribution centers are temporary storage locations, unlike the warehouse, which allocates storage space for a longer duration. The flow of products through the DC is much more than a warehouse.

  • Distribution centers are customer-prone, bridging the gap between the seller and the buyer. In comparison, warehouses are stand-alone storage facilities.

  • Distribution centers typically ship orders acting as order fulfillment locations, serving customers, whereas warehouses do not serve external customers.

  • In comparison to warehouses, Distribution Centers are equipped with more modern technology and well organized fulfillment centers for order processing, packaging, assembling, inventory solutions with a more centralized management system.

What are the Benefits of DC?

  • Distribution centers are dedicated facilities for order fulfillment and provide benefits for a satisfying customer experience. Organizations maintaining multiple distribution centers covering a large area can conveniently take on a large customer base and expedite deliveries.

  • When manufacturing companies might not afford multiple warehouses, distribution centers can come in and provide efficiency in operating fluid and fast-tracked supply chains. Moreover, DC can break down bulk cargo into smaller bulks making it easier to manage transportation.

  • Distribution centers also make life easy for retailers to buy the product in small quantities instead of investing in larger quantities and rid themselves of worrying about storage spaces.

  • DC simplifies large quantity orders by providing multiple functions like picking, packing, assembling, and combining similar products.