Distribution center

A distribution center is responsible for the efficient and rapid flow of material from the company to the customer and allows the company to remain competitive in the global environment. The function of distribution logistics thus lies in the combination of the production of the company with its customers and includes all activities associated with supplying customers with half -finished and finished plants and merchandise related to it. A distribution center is a way to realize the flow of material in this sense.

Tasks of a distribution center

  • Time compensation
  • Amount of compensation
  • Economy
  • Profit maximization
  • Quality improvement

Functional areas of a distribution center

  • Yard management
  • Goods receipt
  • Stock
  • Picking
  • Consolidation and packaging
  • Outbound

The central management of the tasks a distribution center not only allows the reduction of the transport volume but also purchasing advantages. This creates advantages for the consumer as well as for the company. Potential benefits arising from the use of a distribution center for the consumer, are, for example, an increased delivery speed, low stock shortages on the shelves as well as a wide selection of goods.

For the companies, however, are at the forefront cost savings, more efficient handling of goods due to shorter cycle times, reduce inventories, maintaining the availability of goods and faster delivery times. Although a distribution center are connected many advantages, are facing this also possible drawbacks.

Disadvantages for the Company are as ignorant of the requirements of the Consumer carrier, more complex material handling as well as more sophisticated input controls, clumsiness, bureaucracy, delay and danger of monopoly posturing of the distribution center. Arguably one of the most significant disadvantages of the distribution center lies in its very nature - the central handling of goods receipt and goods issue for a large number of retail stores. This centralization retail stores will be provided from the distribution center depending. If it now is a failure of the distribution center, is not just a business - in the event that this has its own distribution department - but all transactions that relate to the goods of this distribution center, at risk. A current example of such a case can be found on the basis of the devastating Hurricane Rita on the Gulf Coast of the United States.

Examples from practice

  • Wal Mart Germany

This company made ​​use of two distribution centers for its formerly 89 Super Center in Germany to, at the right time, the right place to have the right product available to the consumer. The logistics strategies Wal- Mart Germany were the one in a low inventory stock, docking to the other in the so-called Cross. Here the goods were transhipped directly at the distribution center and picked home- specific pallets. These were then immediately shipped to the individual stores.

  • Intermarket

This company operates 350 distribution centers that handle everything from frozen food to consumer electronics and supply these products to over 3,500 retail locations throughout France. In order to ensure efficient performance of the distribution centers, it has been equipped with a new and efficient logistics and inventory management system.

Process of distribution

The process of distribution is illustrated by means of Intermarket and starts at the unloading ramp. There, the incoming goods are scanned and verified against purchase orders. Using the wireless data acquisition Intermec receives Intermarket stowing in warehouses, picking orders for loading, loading the trucks and managing the delivery routes a complete overview of the article movement throughout the supply chain. The wireless terminals reduce the administrative burden and improve the working conditions and the safety of the operator, because it is excluded a risk of injury: The tangled in cables. In combination with the INFOLOG software, equipment storage errors set of all goods transfer points to an end.

Summary

In the context of globalization, a distribution center gained more and more importance. Having a center in each country is from today's perspective, an outdated strategy. Rather large in traffic- favorable locations centers need to be built that can supply several countries. So is accessed via Sweden Northern Europe, the northern continental Europe via Belgium and southern France Southern Europe. Of increasing importance is also the Saarland as a seat for distribution centers, as it is able, due to its central location, all of Europe to supply fast and cheap. In Asia, Singapore is often chosen as the location for the supply in Southeast Asia. With the help of a distribution center so can thus gain economic advantages that allow the Company at the present time to remain competitive.

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