How Can a Distribution Center Help Your Business?

As businesses scale, they must determine whether they can handle all of the increased demands on their operations in house, or whether they need to outsource particular processes. One of those processes is order fulfillment. Businesses looking to make their order fulfillment processes more efficient and less costly turn to 3PL's that operate distribution centers.

What Is a Distribution Center?

A distribution center (DC) is a warehouse operation that specializes in the storage, order fulfillment, and distribution of goods from suppliers (manufacturers, distributors, or retailers) to their clients or clients' clients (typically retailers, wholesalers, or end customers). Third-party logistics providers (3PL's) can operate their own DC's in shared environments (where they store and distribute products on behalf of a variety of clients) or they can manage one or multiple clients' operations (dedicated DC's).

History of Distribution Centers

The growing consumer culture of the 1950's paved the way for the proliferation of distribution centers in the latter part of the 20th century. However, their start can be traced back to the mail order industry in the late 19th century. Montgomery Ward, Sears and Roebuck, and later retailers established catalog-based ordering processes and needed large warehouses to store the products listed for sale. Gradually, companies began to outsource their order fulfillment to third parties that specialized in handling, storing, and distributing goods. The emergence of big box stores hastened the need for more DC's, and the ecommerce boom of the past few years has accelerated their growth.

5 Ways a Distribution Center Can Help Your Business

1. Scale as your business scales
2. Provide real-time inventory management
3. Streamline and accelerate the order fulfillment process
4. Provide value-added services, such as co-packing, re-packing, re-labeling, kitting, and specialty packaging
5. Deliver cost savings and transparency on shipped orders, negotiating special rates for LTL, FTL, local delivery, and other shipping methods

ASW has a long history of managing distribution centers in shared and dedicated environments. Reach out to learn more about ASW's distribution services.