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.
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.
Simplifies shipment processes
Enables accurate allocation of delivery partners
Improves workforce productivity
Helps with efficient route planning
Ensures faster last-mile deliveries
Reduces operational costs in logistics
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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