Hub and Spoke network

What is a Hub and Spoke network?

 

A hub and spoke network can simply demonstrate like a complex bicycle wheel, with the hub as the strategic center of the network, and the spokes radiating out to connect it with outlying points. This system is adopted by various industries like telecommunications and information technology but widely used by Logistics industry. Under this model, carriers gathers cargo from its point of origin i.e, the tips of the spokes and move it back to a central processing facility ie the hub. The shipment is then either stored or distributed directly from the main part of the network.

Hub and spoke network has the advantage of improved shipment tracking, reduces transportation costs, improves cycle times, and minimise inventory. The logistics industry utilises this as one of the cost-effective way of shipping freight.


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