A warehouse, a building dedicated for the safe storage of items, is an integral part of a modern supply chain. At its core, a warehouse frees up space for activities by holding items that do not require immediate attention. However, this strategy of putting away items for future use has driven more than commerce and trade over the course of human history.
History of the Warehouse in Brief
An early manmade structure that fit the basic function of a warehouse is the granary – a separate building from living areas to store excess grain for later. It proved to be a defining tool for our ancestors in their transition from a nomadic lifestyle to living in settlements. The earliest evidence of a granary dates back to the Neolithic as early as 11,500 BC!
As human settlements grew into civilisations and empires, the humble granary also changed. It grew in size and gained improved features to adapt to storage needs like resistance to damage caused by water, fire, and pests. The granary stopped being a granary when consumables and commodities other than grain had to be stored safely. For example, in the end of 2nd century BC, the Romans constructed the horreum, a public warehouse with multiple rooms within the building, to store and organise consumables like fish products, cheese, and honey, and commodities like textiles and metals, among others, to feed residents and drive economies. The Romans also used strategically placed horrea (plural of horreum) to support military campaigns for the expansion of the Roman empire.
With the expansion of empires and creation of new trade routes between years 1500 to 1800, the warehouse became a common sight at ports all around the world to fuel mercantile trade, many doubling as market centres and trade offices. It became more ubiquitous during the Industrial Age beginning in the year 1760, most likely exacerbated by the advancement of land transportation like the steam locomotive to distribute goods from factories to marketplaces over long distances. Towns were transformed in Europe and the United States of America, creating warehouse districts where the railway ran through land filled with large commercial buildings constructed to hold inventory as part of the distribution process.
More Than Just a Space
Mexpower increases storage space with selective racking system in the distribution centre.
For a very long time the warehouse was designed, structurally and functionally, to be space efficient where the use of space is maximised to store the largest number of goods possible in a fixed area. Of course, this was done without physically impeding on the typical flow of goods of a warehouse – receiving of items, storage, picking orders, sorting of orders, and shipping out from the warehouse. In addition to that, the warehouse usually holds goods long-term.
Various demands of the supply chain and the advent of computer technology to process data in the 1970s transformed the warehouse from just a storage space to something more dynamic. While space efficiency remains key in the operations of the warehouse, the focus shifted to adapting typical operations to trends captured from data collected throughout the supply chain with the help of computers. It is this significant shift where the line is drawn to distinguish a distribution centre from a warehouse.
Warehouse vs Distribution Centre
Value-added services like order fulfillment requiring breaking bulk and modifications to the contents of a carton, reverse logistics to accept returns, and postponement solutions to temporarily hold goods to avoid crowding of revenue-generating retail space are part of the daily operations of a distribution centre. They address supply chain trends that can change frequently as data are increasingly made available at a real-time basis with advancements in computer technology like machine learning, artificial intelligence, cloud computing, and more.
Mexpower utilises computer technology to accurately fulfill break bulk orders in a distribution centre.
Due to the high rate of data accessibility resulting from these advancements, goods flow through a distribution centre significantly quicker than through a warehouse. Therefore, the holding of goods in a distribution centre is generally at shorter time periods as compared to a typical warehouse.
Both the warehouse and the distribution centre may appear identical from the outside and share similar basic functions like inventory storage, but their operational demands and timeframe for said demands are extremely different. A warehouse is more suitable for those that need long-term storage instead of immediate shipping while a distribution centre is designed to see the rapid actions to address supply chain trends.
Warehouse VS Distribution Centre. They are streamlined for different functions – the distribution centre is optimised to respond to trends (evident through the modification of the contents of each carton, a process known as break case order fulfillment) while the warehouse is optimised for storage. Note that in the warehouse operation of the illustration, not all items are delivered out at the same time, allowing for wares to be in holding for a longer period of time. Interestingly, our cross-docking operation is similar to the illustrated warehouse operation but at a much quicker speed where goods are only stored for a maximum of two weeks.
Adaptable, Agile, Accurate
Which is better – the warehouse or the distribution centre? Neither is better than the other without any context. Ultimately, the preferred service for a warehouse, distribution centre, or the combination of both, boils down to the needs of your business. Which is why at Mexpower, we provide personalised solutions to fit the demands of your business. We tailor our arsenal of logistical services to drive your supply chain appropriately. Contact us if you are looking for an adaptable, agile, and accurate logistics partner.
At the time of writing, Mexpower operates a distribution centre for two fast-fashion brands, a regional distribution centre in a bonded facility for seven fast-fashion brands, and provides warehousing services to two trading companies.
Update May 2021: Mexpower now operates an e-commerce warehouse to serve four fast-fashion brands in addition to the list stated above.
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