A

PRESENTATION
ON
HUB AND SPOKE SYSTEM

UNDER
THE GUIDANCE OF
MR.VIRAJ JADHAV
 INTRODUCTION
 Hub & Spoke network involves a series of nodes
(hubs) connected by arcs (spokes) that represent
viable transportation alternatives between two
nodes.
 A hub and spoke network is a centralized,
integrated logistics system designed to keep costs
down.
 Hub and spoke distribution centers receive
products from many different origins, consolidate
the products and send them directly to
destinations.
 SPOKE

SPOKE HUB SPOKE

SPOKE
 IMPORTANCE OF HUB AND
SPOKE SYSTEM
Increase in market coverage.
Minimizing the transfer time.
Elimination of interlining.
Maximizing the number of marketable
connections.
Helps to enter inaccessible territories.
FUNCTIONS OF HUB AND SPOKE
• Stockiest are appointed in major towns and feeder
towns.
• Retailers in & around the towns get attached to
these stockiest.
• The stockiest take care of sub-distribution on the
terms and conditions determined by manufacturer.
• The stockiest operate their own delivery vans to
take care of secondary transport and local
delivery jobs.
 PROS AND CONS OF HUB AND SPOKE
PROS CONS
1.Spokes are simple, and new ones 1.Inflexible,changes at the hub,or
can be created easily. even in a single route affects the
whole network.
2.Scheduling is convenient since there 2.The hub constitutes a bottleneck in
are few routes, with frequent service. the network.

3.Complicated operations can be 3.Delays at a spoke can also affect the

carried out at the hub, rather than
every node.
4.Small number of routes generally
leads to more efficient use of
transportation resources.
whole network.
4.Cargo must pass through the hub
before reaching its destination, results
in longer journey.
 ADVANTAGES AND
DISADVANTAGES
ADVANTAGES:-
• To distribute products in areas not easily
accessible to distributors.
• Strengthening distribution network.
• New market development.
• Market penetration.
• Cost effectiveness
• Transport efficiency
DISADVANTAGES:-
• Congestion and delays at hub airports.
• Discontinuous use of airport facilities.
• Airport dependency.
 • Most of the 12 major U.S. passenger
airlines use a hub-and-spoke network
to route their plane traffic.
EXAMPLE • A hub is a central airport that flights
are routed through, and spokes are
the routes that planes take out of the
hub airport.
• A good example of hub and spoke
system is that of Delta airlines,
which has its hub at Hartsfield
Atlanta Airport.
• Say you are in Charleston and want
to go to Memphis. There is not a lot
demand for charleston-to-memphis
flight, so the airline flies you from
charleston to atlanta and then from
atlanta to memphis via connecting
flight.
• The purpose of H&S system is to
save airlines money and give
passengers better routes to
destinations.
 • Centralized distribution system would not
be suitable for rural areas.
EXAMPLE • Under H&S distribution system,stock was
transported from the bottling plants to
Coca Cola
hubs and then from hubs,the stock was
transportedto spokes which were situated
in small towns.
• These spokes fed the retailers catering to
Hub the demand in rural areas.
• Company used large trucks for
Independent Entrepreneurs
transporting stock from bottling plant to
hub.
• Used medium commercial vehicles from
hubs to spokes.
Distributer • Stock from spokes to village retailers
company utilized trucks, auto rickshaws,
Small Villages
cycle rickshaws and hand carts.
THANK YOU