Distribution centre

A distribution centre or goods distribution centre, logistics centre, distribution warehouse or goods distribution centre is a building complex that is a warehouse, a transshipment point or a combination of both.

A distribution centre serves as an interface and functions exclusively within a logistics network. It is primarily concerned with the processing and fulfilment of orders by receiving, temporarily storing and redistributing goods. Accordingly, material flows between manufacturers and customers are organised and handled. Typical functional areas include goods receiving, picking and packing.

Advantages of a distribution centre:

• Well-placed distribution centres can minimise transport costs and shorten delivery times.
• Cost optimisation by avoiding unnecessary storage and transport costs
• More flexibility through short lead times for orders
• Possibility of large-scale dispatch of goods to customers or retailers

On the other hand, there are various disadvantages. These include, above all, the retailer's dependence on the distribution centre. In this context, there is, for example, the risk of natural disasters, as a result of which the central warehouse fails and the retail trade can no longer be supplied with goods.