Since both the warehouse and the fulfillment center belong to the same industry they are usually considered the same. However, in reality, they are very different from each other. Warehouses and fulfillment centers are large buildings that are used to store inventory for companies that wish to sell their products. This is the only similarity between the two. In reality, both of them are quite different from each other and fulfill different purposes for the company. However, whether to use a fulfillment center or a warehouse completely depends on the nature of the business as well as on its requirements. AWL is one of the leading warehouse logistics companies that enables businesses with smart tech enabled warehousing solutions and fulfillment centers.
Furthermore, AWL offers the best in class logistics and supply chain solutions that can make it easy for you to focus on other important business operations. Continue reading to understand the functions of warehouses and fulfillment centers and also to find out the difference between the two and which one will suit your business requirements.
Warehouse: When Is It Used?
Warehouses are large storage centers or industrial space designed to store inventory in bulk. In other words, warehouses are buildings where a business can store their products or goods for an extended period of time. The layout of the warehouse is specifically designed to store maximum inventory. An efficient warehouse layout is one which allows to store the maximum amount of inventory and also which allows one to move freely around the warehouse to handle those products. Any business enterprise can use a warehouse to store its bulk inventory until it is needed. Moreover, any warehouse will have high shelves and forklifts driving and moving containers across the warehouse. The operations in a warehouse remain the same every day including adding into the warehouse and moving it across different locations.
Usually, wholesale businesses or the ones that deal with bulk quantities of goods use warehouses to store their inventories. Renting or leasing a warehouse is a cost effective and smart idea to store inventory. Moreover, a fulfillment center can act as a warehouse but not vice versa. AWL introduced WAAS, which stands for Warehouse As A Solution. WAAS includes modern technology enabled warehouses that can provide you a competitive edge over other competitors in the market.
Fulfillment Center: When Is It Used?
Unlike a warehouse, the fulfillment center is not just used to store goods but plays an important role in the supply chain of a business. The fulfillment center is used to take care of the entire order fulfillment process ranging from order picking and processing to packaging and distribution. 3PL companies like AWL use fulfillment centers to receive, process, and fulfill orders for major business enterprises and help in streamlining the entire supply chain process. In a fulfillment center, inventory is not stored for a long period of time and gets shipped rapidly. The main aim of fulfillment services is to carry out order shipments more quickly and efficiently. Fulfillment centers are usually used by retailers who directly wish to ship their products to the customers.
A fulfillment center can never act as a warehouse. In fact, a warehouse can be used to store extra goods and ship them to a fulfillment center whenever required. Fulfillment centers are usually busy with numerous activities going on at the same time. A fulfillment center receives and stores inventory while simultaneously shipping goods at the same time. Since fulfillment centers usually take care of picking, packing, labeling, and shipping goods, it needs to be equipped with the latest technology to carry out all of these tasks. Businesses that neither have the time nor resources to store, pack and ship goods can approach a fulfillment center. Moreover, warehouses don't serve external customers, while, on the other hand, serving external customers is the main focus of a fulfillment center.
Differences Between Warehouse and Fulfillment Center
There are multiple differences between a warehouse and a fulfillment center. Some of the major differences are as follows:
Long-Term VS Short-Term Storage
The inventory sit time in a warehouse is much higher than any fulfillment center. A warehouse usually stores inventory for an extended period of time. Whereas, fulfillment centers store goods for short periods of time before they are delivered to the final customers. Warehouses are long term projects since a business stores inventory is stored in them for longer periods of time. While fulfillment centers are short term storage projects with a short inventory storage period, usually for less than a month.
Operations Frequency
The operation frequency is different for both these business models. Warehouses stay inactive or static for the majority of the time. Whereas, a fulfillment center stays busy with multiple complex operations going on day and night. In other words, warehouses include operations whenever there is an inward or outward movement of goods from the warehouse. However, in a fulfillment center the movement of goods takes place on a frequent basis which involves a lot of operations throughout the day.
Process
The process of a warehouse is very different from that of a fulfillment center. Although, both the warehouse and a fulfillment center both are a party of the supply chain process. However, both fulfill different functions and purposes of the supply chain fulfillment for an organization. Warehousing plays an important role in fulfilling the storage process of the supply chain. Whereas, a fulfillment center includes all the stages of the entire order fulfillment process. A warehouse stores products to use later, while fulfillment centers store products for a short duration of time, pick and pack them and ensure that they are efficiently delivered to the customers.
Automating Warehouses & Fulfillment Centers
Companies like AWL India maintain technology as the base of the entire supply chain process. Every step of the order fulfillment process is automated to keep the business in the loop and provide real time updates to the business about the supply chain operations. AWL India ensures the use of cutting edge technology in both the warehouses and fulfillment centers operations to help them in staying competitive in the market. By using the latest modern technology, both warehouses and fulfillment centers can stay aware of their inventory levels and make strategies accordingly. With built in integrations businesses can ensure better customer satisfaction levels and improve their business operations.
Conclusion
Now that you are aware of the differences between a warehouse and a fulfillment center and their working models, it is safe to say that you can decide what you want to fulfill your business requirements. Warehouses simply store your products for an extended period of time to be used later. Whereas, fulfillment centers store products for a short period of time as they pick, pack, and deliver goods to the customers. AWL is one of the leading warehouse as well as fulfillment center providers that can enable your business with the latest cutting edge technology, so that you can focus on other essential operations of your business.
Rituraj Pankaj
Tech Leader in Supply Chain Management