Now Trending in Logistics: The Hub and Spoke Distribution Model
Efficient logistics has become a key enabler for success in the supply chain industry. Hub and spoke distribution is now becoming a popular logistics model among enterprises to ensure cost efficiency and faster deliveries.
What is a hub and spoke distribution model?
As its name suggests, a hub and spoke distribution model is a centralized warehousing and shipment system that resembles the structure of a bicycle wheel. The center of the wheel is the hub or a distribution center and each spoke represents a direction of delivery.
How is it different from a Point-to-Point distribution model?
In a point-to-point distribution model, packages typically move between point A to B, C, D, or E based on delivery requirements and inventory availability at that time.
In a hub-and-spoke model, distribution centers/ warehouses are strategically placed at a location from where reaching multiple delivery locations is possible with the most optimal travel distance and time.
Advantages of the Hub and Spoke Distribution Model
Simplifies shipment processes
Enables accurate allocation of delivery partners
Improves workforce productivity
Helps with efficient route planning
Ensures faster all-mile deliveries
Reduces operational costs in logistics
Is it ideal for your supply chain?
The hub and spoke model is ideally suited for supply chain enterprises with bulk day-to-day orders within a fixed radius.
All in all, the hub and spoke model is certainly a more flexible and profitable distribution network ensuring smooth flow of goods and cost-efficient deliveries.
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