Efficiency is the key to a successful contemporary supply chain and the hub and spoke distribution model deserves respectful mention
when it comes to efficiency.
It has grown in popularity in recent times in modern supply chain management due to
its economical and efficient model for both businesses and end consumers. It has been in use for more than a century in the air freight business and is still quite effective in today’s business scenario. This type of distribution network is a huge success in improving productivity,
inventory management, and cutting down transportation costs in supply chain management.
To get a basic idea about it, this blog will provide you with a comprehensive guide on what a hub & spoke model is all about, its advantage for businesses, and how businesses can best find the result of using the hub & spoke model, etc.
What is a Hub & Spoke Model in a supply chain network?
The Hub and Spoke Model is a highly centralized distribution model in which goods move from the central “hub” to various “spoke.” The hub is a warehouse,
distribution center or another type of storage facility,
and the spokes are typically multiple delivery locations or other points of distribution.
This model is often used in conjunction with just-in-time (JIT) inventory management,
which minimizes the need for warehousing and other costly inventory management practices.
with little or no buffer stock held in reserve. This requires good coordination between the various elements of the supply chain, which the hub and spoke model can facilitate.
Advantages of the Hub & Spoke Model
Today, many supply chains are optimized using the hub and spoke distribution model as
this model offers several advantages over conventional supply chain models.
- 1. Increased Efficiency: The hub and spoke model is more efficient than other models, as it allows for the centralization of various distribution stages (such as inventory management).
- 2. Reduced Costs: Centralization of the distribution process further cuts down on fuel expenses, as the entire supply takes place from one dedicated hub despite moving to multiple hubs at distant locations.
- Greater Flexibility: The model is also more flexible when compared to the point-to-point distribution model, as it enables delivery agents to plan their delivery routes without worrying about any constraints such as traffic.
- Improved Customer Service: The hub and spoke model can also improve customer service, as goods can be delivered more quickly to targeted locations.
- Reduced Risk: Finally, this model can also help to reduce the risk in the supply chain, as disruptions at one particular location are less likely to affect the entire network.
How 3PL Can Help in Optimizing Modern Supply Chains?
A 3PL using Hub and Spoke Distribution Model can help in optimizing the modern supply chain by providing a single point of contact for the management and coordination of shipments.
NimbusPost is a reliable 3PL company that uses this model and thus better allows businesses to focus on their core competencies and reduces supply chain costs. Additionally, it can provide valuable data analytics that can help improve supply chain performance. It has quick shipping services offering the same and next-day delivery across 29,000+ domestic pin codes. It provides a seamless and flexible international courier service in about 196+ countries at reasonable shipping rates.
Why Choose NimbusPost?
- One-click integration to multiple international and national courier partners, eCommerce channels, and marketplaces in a single place.
- It leverages AI-enabled technology and offers fully-equipped warehouses and world-class fulfillment facilities to smoothen the supply chain management process.
- Real-time shipment tracking facility.
- Lowest shipping rates across India and 196+ countries.
- Advanced NDR management panel.
- Automated order confirmation and lowest return rate.
- 24*7 customer support with prompt responses.
To know more, visit nimbuspost.com
Hub and spoke distribution model will only develop further as technology advances, giving shippers and carriers more flexibility,
faster transit times, and more personalized customer service.
Therefore, partnering with a shipping service provider who leverages the hub and spoke model in their distribution model can turn out to be beneficial for your business for a brief period.