Introduction

Warehouses are crucial components of most modern supply chains. They are likely to be involved in various stages of the sourcing, production and distribution of goods, from the handling of raw materials and work-in-progress through to finished products.

Warehouses are an integral part of the supply chains in which they operate, and therefore recent trends, such as increasing market volatility, product range proliferation and shortening customer lead times, all have an impact on the roles that warehouses are required to perform. Warehouses need to be designed and operated in line with the specific requirements of the supply chain as a whole. They are therefore justified where they are part of the least-cost supply chain that can be designed to meet the service levels that need to be provided to the customers. 

A distribution centre 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 re-distributed to retailers, wholesalers or directly to the consumers. A distribution centre is a primary part, of the order processing element, of the entire order fulfillment process. 

One of the key benefits of a distribution centre is the structure of supply network set up which allows a single location to stock a vast number of products. Some organizations operate both retail distribution and direct-to-consumer distribution out of a single facility, sharing space, equipment, labour resources and inventory as applicable. A typical way in which a retail distribution network operates is by setting up centres throughout a commercial market where each centre will then serve a number of stores. Large distribution centres for companies such as Wal-Mart serve 50-125 stores. How it works is? Supplier’s ship truckload of products to the distribution centre and the distribution centre then stores the product until needed by the retail location and then ship the product quantity as required.