As your business grows and expands, the ability to pick, package, and ship orders can become a bottleneck in your ability to fulfill the growing demand. Distribution centers are constructed and operated to meet the climbing demands of an expanding company’s supply chain.
In order to meet your company’s distribution needs, it is key to understand what a distribution center is, and what individual services specifically solve your fulfillment needs.
What is a Distribution Center?
Distribution centers are warehouses that specialize in strategically storing, packing, and shipping finished goods to their intended destination. Also known as a fulfillment center, a distribution center will handle all the supply chain tasks associated with delivering goods to customers.
4 Ways Distribution Centers and Warehouses are Different:
- Customer-centric Processes – The level of involvement between warehouses and distribution centers are drastically different. Warehouses are simply expanded storage units where the owner pays for the space their inventory needs, while distribution centers actively manage and optimize their supply chains. Distribution centers provide customer support, expertise in both inbound and outbound logistics, and work with customers to utilize the right technology, practices, and procedures to save on logistical costs and time.
- Storage Management – Distribution Centers actively streamline both the storage and fulfillment process of shipping orders to customers as efficiently and effectively as possible. Warehouses are simply storage for inventory, nothing more.
- Internal Processes – A crucial differentiator between using a warehouse versus a distribution center is the distribution center’s utilization of technology in the fulfillment process. Many 3PL-operated (3rd Party Logistics) distribution centers offer integrations with their warehouse management systems to automate the fulfillment and shipping processes, saving time, energy, and money.
- Shipping Workflows – The process of moving inventory in warehouses and distribution centers is skewed in terms of effort and efficiency. With some warehouses, you may even need to arrange your inventory on your own, while distribution centers have partnerships with shipping carriers to maximize the speed of shipping.
What Are the Essential Distribution Center Processes?
- Receiving and Storing Inventory – Distribution centers receive and store inventory (including the delivery to the center, unloading, and actual storage). Thought-out receiving and storage practices, along with having the proper documentation, can ensure a seamless process.
- Picking and Packing – Distribution centers tend to use a warehouse management system to streamline the warehouse picking process, where they assign similar orders with similar inventory to the same space of the warehouse. This picking management system allows pickers to pick orders with reduced travel times, improving efficiency and lowering costs.After that, a picking list is created with the details of each order, including quantity and the location of that inventory in the distribution center. After all the items for an order are picked up, they are packed and given a shipping label.
- Restocking – Restocking, otherwise known as inventory replenishment, is a vital part of a distribution center’s services. Being able to have enough inventory stored and ready to be sent out is critical to keeping up with demand.Effective restocking practices will include considerations for forecasted demand, as well as managing the restocking of distribution centers in multiple different locations. Many distribution centers have an inventory management software system to automate, control, and analyze current restocking practices.
- Managing Returns – Being able to aptly process returns can provide a major customer satisfaction boost as well as decrease logistical costs.
You also have the possibility of using a 3PL partner to manage returns for you.
How PFS’s Distribution Centers Benefit eCommerce
- Reduced Costs – PFS’s ability to reduce the time and energy typically associated with warehouse management through specialized technology, data management, and internal resources is designed with one goal for you: save money.
- Saves Time – Eliminate the time you’d normally spend packing boxes and labeling orders to focus on the actual development of your business, allowing your business to scale without worrying about logistical restrictions.
- Wide-Ranging Technological Integration – PFS’s systems are intentionally built to integrate with whatever eCommerce platform your business utilizes. When an order comes in, oversee the entire process from ordering to packing to shipping, all while receiving analytical data to make your business more efficient and impactful.
- Experience with Growth – With over 13.5 million Amazon orders fulfilled, over 20 million kits built, and more than 30 thousand outbound trucks, PFS is an expert in what it takes to help your eCommerce business grow.
- Faster Processing and Shipping – Orders placed by 8 a.m. are shipped the same day, and, with a 99.96% accuracy rate, you can be assured your orders will be shipped as fast and accurately as possible.
Warehouses simply don’t meet the needs of a growing business. Product Fulfillment Solutions is a reliable, experienced, and professional logistics service provider that is dedicated to working with your company to handle all its logistical necessities, and is dedicated to saving you time, money, and letting you focus on growing your business.
Distribution Center FAQs
What does a distribution center do?
Distribution centers go above regular warehouses by offering logistics services for companies including warehousing, fulfillment, and shipping. Distribution centers are usually connected in one network to allow storage across multiple sites, reducing lag times and shipping costs.
Differences between a warehouse and distribution center?
Warehouses only function as storage, while distribution centers can also handle fulfillment and other logistical services.
How long does a package sit at a distribution center?
Packages tend to be shipped out the same day as an order, depending on when the order was placed.
How do distribution centers operate?
Distribution centers function as warehouses that also handle the logistical processes associated with eCommerce for the companies utilizing the distribution center. This includes storage, fulfillment, shipping, and managing returns.
Want a personalized consultation to discover what 3PL solutions can do for your business? Contact PFS today!