Hub And Spoke Model

If you were in the logistics industry, you would have learned about the model called a hub and spoke. If you are wondering, what is it and how it works, you are at the right place. We’re going to see what hub is and spoke model is in logistics and then we will see what the benefits are of the same. We will also see how it works and why we need it.

What Is the Hub and Spoke Model in Logistics?

The Hub and Spoke Model in logistics is a way of organizing deliveries smartly and efficiently.

It’s like a complete system that fulfills the order most efficiently.  To understand it, we will take the example of the bicycle. It’s the only example using which you can understand the whole concept in the best way possible.

You have the hub at the center, which is like a main warehouse or sorting center. Just like in a cycle, the main part remains in the center which is responsible for the entire wheel. Then, you have the spokes, which are routes that go out to different locations. For this, the logistics have a vehicle through which the goods to go the smaller warehouses or other delivery areas. Some people call it a small hub while some people call it a delivery station. No matter what you call it, the meaning remains the same.

How does the Hub and Spoke Model Work?

Now that you know about the hub and spoke model. We will now see how it works. Earlier, we were mainly dependent on the example of bicycles. Here, we are going to take it a step further and see how it works in the logistics market.

The traditional logistics model didn’t have the model. So, they used to send stuff directly from one place to another without any hub or spoke. Now, the new model makes it easier.

Instead of sending things directly from one place to another in a random way, items first go to the hub. This is the main hub that we talked about. It’s in the center of the wheel if you take the bicycle example.

At the hub, everything gets sorted out. Then, it’s sent along the spokes to where it needs to go. This system helps save time and makes delivering goods faster because it’s more organized.

If you take a small example from your real life. You might have to go to a smaller station and then go to the airport to get the bigger flight, right?

If you are in a small city in India and want to travel to a different country, you will first have to go to the bigger city from which you can onboard the international flight. The same concept is applied to logistics. This way, businesses can move things around more quickly and customers get their packages sooner.

Why can’t the Main Hub Send all the Goods?

If you are new to the logistics industry, you will surely think of this. Many young entrepreneurs want to get into the world of logistics, or they simply are wondering about some logistics models. So, this question is crucial.

If the main hub sends all the stuff, it’s going to take a lot of time to sort every individual parcel. By the time, they figure it out, there will be new parcels coming in the hub. So, they will need more manpower. Even if they have more manpower, it’s still going to take more time as the place will become too crowded for anyone to even move their hand. Even if you take the costs, this is not at all cost-efficient as they will need a small vehicle to pass on the goods. It usually takes more cost than stuffing all the items in a single truck and moving them to a smaller location. So, the hub and spoke model was introduced.

Benefits of the Hub and Spoke Model

We will now see the benefits of hub and spoke model.

(a) Making Shipping Easier

A big win of the hub and spoke model is how it makes shipping simpler and more centralized. With so many complicated steps in shipping and logistics, the hub and spoke system brings everything to one place.  Using this, the companies can manage planning, loading-unloading, and keep track of inventory.

(b) Better Planning and Deliveries

This model also makes it easier to plan routes and make deliveries more efficient. With a central hub, it cuts down on complicated routes. You can make the hubs in such a way that you can easily unload the trucks in the best and easiest way possible. So, the model allows you to make better planning and deliveries.

(c) Eco-Friendly Operations

By needing fewer vehicles and routes, this method is kinder to the environment. Using less fuel means lower carbon emissions. It’s one of the things that all of us are responsible for on the planet. So, you need to add this to your value.

(d) Saving Money

The hub and spoke system can also help save a lot of money. It does this by lowering the costs of labor for shipping and delivery. With shipments going to a central hub, you need fewer people to handle inventory and send out shipments. This cuts down on the need for extra staff and the costs of running many warehouses or distribution centers.

(e) Efficiency and Performance

You can easily have the best efficiency and performance when you add this model to your operations. This will improve the efficiency of all the operations. If you take individual parts, it will help you with everything. To begin with, you will need less manpower as compared to others. Further, it will also solve many other problems such as costs, etc.

(f) Scale the Business

Lastly, the major benefit of using this mode is that you will be able to scale your business with ease. When there are multiple hubs in the same city, it will be easier for you to handle more goods traffic. When the goods are more, the company can scale at more speed. So, this is one of the best benefits of using the model.

Using Tech for Better Management

You can implement the most efficient model but it’s of no use if you don’t have tech-enabled to it. Technology helps you with every single process.
Transport management software (TMS) is a must-have for managing a hub and spoke model efficiently. It gathers important data and insights and helps you manage the model in a better way.
A TMS can not only be used for this model but it’s a complete software for you to manage your entire logistics business in one place.
You can check out TMS by Bharat Software Solutions (BSS) for more information. It’s a highly recommended tool if you don’t have any software that manages all your business operations. A logistics company should have a TMS using which they can manage all the stuff. It’s like an oiling in a bicycle for the bicycle. Without it, you won’t be able to run the operations easily.
So, we highly recommend using this software if you are into the logistics business. It is even helpful if you have multiple branches of your business. You can even train your staff for all this. When you train the staff, even they will be able to use the software. With this, your staff can add the entries and start doing the work for you.

Summary

To summarize, the short definition of the hub and spot model is that all the goods that come from the main location will be gathered in the main hub. They are then sent to different parts from the small hubs or centers. The whole process is used to save time and money. It makes the whole delivery process easier and simpler. To make it even simpler, you can use a TMS which will help you in managing all the stuff carefully. It helps you with the entire business operations as well.