what is a distribution network 
in a supply chain a distribution network is an interconnected group of storage facilities and transportation systems that receive inventories of goods and then deliver them to customers it is an intermediate point to get products from the manufacturer to the end customer either directly or through a retail network a fast and reliable distribution network is essential in today s instant gratification society of consumers understanding a distribution networkdeveloping an efficient distribution network is one of the most critical aspects of the success of a company it is a component of strategic planning that allows a company s products to reach customers quickly and efficiently while at the same time keeping costs low for the company so that they may realize larger profit margins the supply chain for goods can involve a far reaching distribution network depending on the product and where the end customers are located a manufacturer may have a distribution network to serve wholesalers who in turn have their own network to ship to distribution networks operated by retailers who at the last link of the supply chain would sell the goods in their retail stores alternatively a simplified supply chain could involve a manufacturer shipping finished products to its distribution network and then directly to end consumers location proximity to the customer and infrastructure quality are two important attributes of a distribution network additionally the storage handling and transportation functions at a distribution site are set up to suit the particular needs of the company to serve its customer base in a geographic area there can be a high level of sophistication at a single site and by extension the entire distribution network to optimally process order flow of finished goods whether a handful of large items such as farm tractors or thousands of skus for a retail chain for the entire distribution network a company must plan out needs for equipment workers information technology systems and transportation fleets the company must determine whether a hub and spoke distribution network is right for its business or a decentralized network distribution networks come at the post manufacturing part of a supply chain the flow of goods and services and include all stages that deliver final products into the hands of consumers real world examplesestablishing an effective distribution network requires a studied approach because it is increasingly considered a critical asset in this new age of e commerce walmart wmt for example with 190 distribution facilities as of 2020 is allocating more capital to build out additional fulfillment centers for its distribution network as it evolves with the competitive demands of the market as of july 2020 walmart s distribution network including its retail stores is 924 million square feet it is so large that in comparison the island of manhattan is 661 million square feet for even more efficiency walmart divides its distribution network into specific categories for example it has regional distribution centers food distribution centers fashion distribution centers and more this ensures that each distribution center is focused on one product area and is therefore perfectly designed to meet the needs of delivering that product quickly and at the lowest cost amazon amzn has also increased its distribution network building out enormous robotically controlled warehouses across the world and operating its own freight trucking fleets and cargo planes amazon has even discussed using autonomous drones to deliver goods to customers which would be an innovation in the distribution of goods amazon is a massive global retailer and therefore its distribution network spans many countries as of july 2020 amazon has 1 215 distribution facilities in 21 countries amazon primarily breaks its distribution network down into prime hubs fulfillment centers inbounds and outbound sortation centers and delivery stations 