Benefits of consolidating distribution centers

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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.

They may also have automated equipment for de-palletizing and re-palletizing product.

Some of the most sophisticated systems can convey product directly into storage racks and then convey out of the racks to trucks, all automatically.

Large distribution centers for companies such as Wal-Mart serve 50–125 stores.With lead times measured in weeks or months, stocking these products in a distribution center is often the only way to maintain in-stocks at the store.New seasons, holidays, or special promotions may also prompt a retailer to store specific items prior to a large rollout or demand forecast.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.

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