Distribution Centres vs Warehouses: Triadic, Dyadic and Monadic

Are you ready for some mental gymnastics? Here’s my hypothesis: they are everywhere! Triadic and non-triadic distribution centres, I mean. But most logisticians have no concept of what either is, let alone the importance of understanding and thinking with a triadic perspective.

Want to test your warehousing and supply chain colleagues? Well, ask them if they have considered the difference between triadic and non-triadic warehouses, or the difference between a warehouse and a distribution centre? No doubt, you will face blank stares, complete indifference, and questions about your mental health.

So, who cares about triadic warehouses? Logisticians, DC Managers, Supply Chain Managers, Directors, and CEOs should care about different types of warehouses and DCs — let me explain.

First, What’s the Difference Between a Warehouse and a Distribution Centre?

One of the most common questions we answer is around warehouses and DCs. While warehouses and distribution centres may seem similar, and the terms are often used interchangeably, they can serve slightly different purposes:

Warehouses are primarily about storage, and are designed to hold inventory for longer. They’re like a “parking lot” for inventory, with basic functions like receiving and storing products, basic inventory management, simple picking and shipping, and overall more static operations.

Modern distribution centres (DCs) are more dynamic facilities that can enhance the flow and movement of goods throughout your site. They’re designed to receive products and get them out fast, fulfil complex orders, and they often have automation and advanced inventory management systems, which can help with higher inventory turnover and shorter storage times.

That said, modern facilities often blur these lines, with many warehouses adopting DC-like capabilities and vice versa to meet evolving supply chain needs. So, you’ll often find people using these two terms interchangeably. Let’s look at the most common warehouse layout: the triadic warehouse.

What is a Triadic Warehouse?

It’s a warehouse that is broken up into three sections. Simple enough! What about multiple zones within the same warehouse, or conjoined facilities which are split into three sections? These may be triadic as well, but not always.

My estimate is that around 85% of warehouses are triadic. What of the other 15%? By implication, these are non-triadic warehouses, because they are not compartmentalised into three zones.

Great, so what characterises the triadic warehouse?

• The Pareto Principle applied to stock management is applied to warehouse layout and operations. Attributed to Vilfredo Pareto, this principle — also known as the 80/20 rule — reveals that for many events, 80% of effects come from 20% of causes. Inventory management tends to follow this theory, as in most businesses, 80% of sales and product movement is commonly attributed to only 20% of the stock keeping units (SKUs).
• The reliable inventory tool of ABC analysis is used to locate goods in storage bins and picking faces. ABC analysis has its roots in the Pareto Principle, but takes it further. Stock is divided into three categories: A — representing 70% of stock movement or sales; B — representing the next 20%; and C — representing the remaining 10%.

(Please note that application of the above two points outlines what I am now defining as triadic thinking. This leads to additional characteristics that naturally flow from such thinking.)

• Goods are received, stored, picked, and packed according to their frequency of demand, regardless of inventory value.
• They are designed for optimal flow to minimise handling resources and labour.
• They feature fast pick, medium pick, and slow picking zones.
• Generally, although not always, operators with triadic awareness review the frequency of demand and move stock around to perpetuate optimal layout and performance. (What percentage do this regularly? Here is the disappointing part: only 15–20% of companies do this regularly.)
• They are typically larger warehouses or rooms in warehouses — for example, greater than 500 sqm — but smaller facilities with many SKUs may also employ triadic thinking.
• Most importantly, they have a warehouse management or control system which manages inventory using triadic thinking.

Benefits of Triadic Warehouses

Now for the value question. Are triadic warehouses good? Yes — if they are managed properly. But if not managed well, they can deteriorate to non-triadic status, thus becoming suboptimal in operation and expensive to run.

The main reason people opt for triadic warehouses is that they offer savings and efficiency. This is achieved by combining a warehouse and a distribution centre, allowing you to eliminate the need for multiple sites, reduce overheads, and increase supply chain visibility. This integration means better inventory management, lower stock levels, and fewer stockouts and instances of overstocking — plus, it can help ensure faster order processing and less handling time too.

There’s also the potential for triadic warehouses to help businesses improve customer satisfaction by providing faster and more accurate order fulfilment. By ensuring that products are readily available and delivered promptly, triadic warehouses play a crucial role in enhancing the overall customer experience.

What About Non-Triadic Warehouses?

This question is a little more complicated, because there are two types of non-triadic warehouses: dyadic and monadic.

Dyadic Warehouses

This is a warehouse, room, or zone within a warehouse that is divided into two classes. It follows the Pareto Principle of stock placement as alluded to previously.

It could, for example, encompass grouping fast-moving stock away from the rest, to allow for freer access to receiving and dispatch zones. Examples of dyadic warehouses include subsections of larger facilities — such as freezers, cool rooms, clean rooms, or dangerous goods stores — which are all distinct storage entities.

Monadic Warehouses

This is a warehouse, compartment, or zone within a warehouse that has just one class of stock and no meaningful reason for placing stock anywhere in particular. In these instances, the footprint may be so small that breaking stock into dyadic or triadic locations is meaningless.

However, applications of monadic warehouses can occur when there are specific temperature, environmental, or handling requirements that dictate a monadic environment.

The characteristics of non-triadic warehouses may include:

• Goods are stored at random, with little or no reference to frequency of demand.
• Operators have little regard for flow and the use of handling resources and labour.
• The warehouse layout has little or no differential picking zones.
• The warehouse design is not based on Pareto principles or ABC analysis.
• They tend to be smaller facilities.

The schematic plans illustrate each of the non-triadic, triadic, and hybrid triadic warehouse concepts discussed, plus ways in which warehouses may be structured.

What About Automated Warehouses?

Often, automated sections of the warehouse are a virtual triadic oasis within a larger facility of triadic or non-triadic design. This is because automated systems — such as goods-to-person, automatic storage and retrieval systems, autonomous vehicles, and robots — have control systems which achieve triadic management of stock.

Put simply, they feature built-in algorithms which optimise the placement and retrieval of stock within their own system. Thus, the systems provide optimal storage locations and are programmed to provide the fastest material routes for both put-away and retrieval of stock.

So, What? Where Are We Going With This?

As much as warehouse layout designers, materials handling companies, WMS companies, supply chain directors and distribution centre managers, consultants, and CEOs understand the Pareto Principle and ABC analysis, triadic thinking is sadly lacking in our industry.

How do I know this? Because every day, I see evidence of it in the workplace. The symptoms are double handling, long travel distances, wrongly slotted products, warehouse blockages, low picking rates, gridlock, and operator frustration.

Is There a Solution?

Yes — think triadically! Think in threes, then twos and ones. But mostly in threes. Design your warehouse layout and operation along these lines.

Here is a test to see if you and your company are thinking from a triadic perspective.

1. Is your warehouse organised triadically (three zones according to Pareto and ABC principles)?
2. Do you review your flow, warehouse stock locations, and layout regularly?
3. Do you use systems to manage storage placement, product slotting, and optimisation of resources?
4. Do your employees understand the triadic versus non-triadic nature of warehousing?

If you answered no to some or all of these, don’t worry. Regardless of your answers, there is hope.

Our Solution: The Triadic Warehouse Continuum

Now that you know about triadic and non-triadic warehouses, here’s the opportunity to improve. Be encouraged that for all but the very smallest of warehouses, firms can move along the Triadic Warehouse Continuum — thus, you can move from low efficiency to high efficiency by applying triadic thinking and practice.

The tools required to do so will include an understanding of ABC analysis, the Pareto effect, a stock frequency report, a calculator, and a pad and pencil. Finally, a draftsman to help you re-slot your products and redesign the layout of the facility will also help. Not too complicated, really.

However, for a larger, more complex warehouse with lots of products and high volumes, stock optimisation and product slotting software are helpful. With such tools, warehouse operators have every opportunity of moving their facility along the Triadic Warehouse Continuum (to the right) so that they can become more efficient.

So, do you agree with my hypothesis? To be honest, I don’t mind if you don’t. Yet in my experience, there is prima facie evidence that both triadic and non-triadic distribution centres exist and permeate the world of warehousing logistics. Moving from non-triadic to triadic operations should be the goal of every warehousing logistician.

Best Regards,
Mal Walker
Contact Us or 0412 271 503

 

Mal is Manager Consulting with Logistics Bureau. He is passionate about triadic warehouses, design, layout, and operation, and works across Australia and the Pacific as a Warehousing Specialist. In his spare time, he plays drums in a bush band, chases his grandkids, and supports the Sea Eagles. If you have an opinion or a story to tell on triadic thinking, please let him know.