The Difference between a Warehouse and a Distribution Center The Difference between a Warehouse and a Distribution Center

Some will probably suggest a warehouse and distribution center. However, not all of them are aware of the distinction between a warehouse and a distribution center. Both warehouses and distribution centers are key assets for any supply chain. And, by leveraging their capabilities, they may help optimize the shipper’s supply chain, etc., and establish a significant competitive advantage. 

So, how does a distribution center differ from a warehouse? To help you grasp the distinction between distribution centers and warehouse centers, as well as the critical function these facilities play in transporting items from point A to point B, we’ve created a brief comparison of the two.

Warehouse and a Distribution Center Definition

In the previous supply chain system, regulations were typically prioritized to raise the amount of any product at any time and from any location. Because of information flow and planning systems lacking in the supply chain, the law should be followed.

As a result, the warehouse was utilized to stockpile commodities that would be distributed many months after they arrived at the facility. The supply chain has evolved and altered throughout the last century. The contemporary supply chain is now equipped with greater information and technology that can forecast future demand for products and deliver items on time. 

What are warehouses?

Warehouses are large storage facilities where goods are kept for an extended length of time. Warehouses are generally large and may contain a large number of items at any given time. Large warehouse items are transferred to smaller, more manageable distribution hubs. Warehouses function as a long-term storage facility for specific products. It played an important role in the past since its nature allowed them to store a wide range of commodities.

The conventional warehouse is no longer able to meet customers’ requirements, which has resulted in the transformation of traditional warehouses into distribution centers. While warehouses are used to store products, distribution centers provide a variety of extra services, such as product mixing, order fulfilment, cross-docking, and packing. In general, distribution center items have shorter expiry dates than warehouse products. The distribution center’s flow velocity is greater than the warehouse’s flow rate.

What Exactly Are Distribution Centers?

Distribution centers are the modern-day answer to warehouses. While warehouses served a different purpose in long-term stockpiling, distribution centers provide a quick flow of items. Corporations can hire distribution facilities to hold a set quantity of products. 

The quantity of products is governed by demand. In comparison to distribution centers, warehouses are used for long-term storage. Delivery centers are more concerned with on-demand distribution than with storage. Distribution centers consolidate, package, and ship a variety of commodities.

Distribution vs. Warehouse Differences

When comparing distribution centers to warehouse centers, there are a few points to keep in mind. Once you’ve grasped the two fundamental distinctions between distribution centers and warehouses, distribution and storage, respectively, there are a few more. Here are a few examples:

WarehousesDistribution Centers
Devoted and long-term.For shorter-term storage, distribution is the primary goal.
Distribution centers’ suppliers are warehouses.Businesses and consumers rely on distribution facilities for their supplies.
Incorporate the minimum technology required for small amounts of planning, even with an abundance of items.Data planning, business communication, and packaging technology advanced.
Ideal for delivering stock to several firms.Ideal for distributing said inventory to a large number of businesses.
Warehouses frequently transact with industrial zones and industries.Distribution facilities frequently conduct business with both small and large shops and enterprises.

 

When deciding between warehouses and distribution facilities, your decision will be determined by your unique requirements. While both warehouses and distribution centers appear to be almost identical on the outside, their internal operations are somewhat different. In summary, warehouses are better suitable for long-term storage needs and do not require quick shipment of products. 

On the other hand, distribution centers are intended to handle the quick intake and shipping of products. While all of these methods may be used to keep temperature-controlled products, perishables such as foodstuffs are most frequently seen in distribution centers due to their inability to be stored for an extended period. When deciding between a warehouse and a distribution center, your choice should be obvious, since they provide significantly different characteristics.

Warehouse and a Distribution Center in Vietnam

The market for ready-built factories and warehouses in Vietnam is projected to grow further in the future years. Warehouse need has been primarily driven by e-commerce businesses extending their storage capacity and delivery network. Furthermore, more investors/developers are actively looking for locations to build logistics facilities. 

Niche industrial and logistics assets will also benefit in the long term, with growing consumption and distribution of groceries and fresh foods set to accelerate occupier demand for temperature-controlled storage. In the setting of restricted industrial land availability, high-rise warehouses have been created to provide more storage space for e-commerce firms’ demands.

There are opportunities to build storage and distribution infrastructure. The current storage infrastructure must be integrated with other logistics services such as transportation, inventory management, cold chain management, customs facilities, and warehouse management. 

The majority of warehouses and distribution facilities in Vietnam lack Warehouse Management Systems (WMS) and Transport Management Systems (TMS). A WMS is essential for modern supply chain management, as it automates the process of order fulfilment, from accepting raw materials to dispatching finished goods.

Conclusion

Recognizing Vietnam’s strong demand for industrial services, we established the Industrial & Logistic department to provide comprehensive logistics and multi-let industrial services. Our specialists, situated in Vietnam and other significant regional markets, assist customers with leasing, selling, investing, valuation, planning, and development. Our expert team in Vietnam and the surrounding area enables us to continuously monitor and track activities in local, regional, and national markets.

Working on behalf of developers, investors, landowners, corporate occupiers, logistics companies, and public sector bodies, everything we do is backed by the extensive knowledge and up-to-date insight of the Industrial Savills research team. In every case, we prioritize client communication and on-time delivery. Therefore, contact Savills Industrial now to discuss your business development ideas in further detail.