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.