The terms relate to facilities integral to the supply chain, but they serve distinct functions. One type focuses on order fulfillment, involving receiving, picking, packing, and shipping individual customer orders. The other emphasizes the efficient movement of goods to various retail outlets or other facilities in bulk quantities. As an example, consider a product arriving from a manufacturer. It might first go to the second facility type for initial sorting and then be shipped to the first facility type to await individual orders.
Understanding the difference is vital for optimizing supply chain logistics and inventory management. Efficient distribution lowers transportation costs and ensures timely replenishment of retail stores. Efficient order fulfillment leads to faster delivery times and improved customer satisfaction, crucial factors in todays competitive market. Historically, businesses often managed these functions separately, but modern logistics aims for integration to streamline operations and reduce costs.
