Thursday, April 1, 2010

Hub-and-Spoke-System

In transportation one usually distinguishes between direct transportation and Hub-and-Spoke-Systems.

Direct transportation is a point-to-point connection, which means transports that are going into one direction.

The basic characteristic of Hub-and-Spoke-Systems is its star-shaped organization.
The hub is the central node from where the transportation takes place to all the end nodes.



When having a Hub-and-Spoke System there are predefined trans-shipment centers/reloading points (here yellow) which usually are situated at major transportation routes and which are used to hand over grouped goods to regional distributers.
Hub describes the reloading point, whereas Spoke stands for the commodity flow from/to the Hub. [http://www.vnl.at/Hub-and-Spoke-Systeme.275.0.html]

Why having a Hub-and-Spokes-System?

  • to optimize the capacity utilization
  • to avoid utilization below capacity or even empty drives
Typical examples of Hub-and-Spokes-Systems:
  • parcel and mail delivery
  • courir express services
  • feeder traffic
  • rail freight traffic
  • truck transport
  • etc.

Disadvantages of Hub-and-Spokes-Systems:
  • In some cases longer distances have to be covered because the transportation passes a central hub.



Example:

In our logistics organization the Hub is located in Hannover (see red dot) and two of the end nodes, or spokes are in Hamburg and Berlin (see blue dots).

Now certain goods are supposed to be transported from Hamburg to Berlin.
With the Hub-and-Spoke-System these goods are first going to be transported from Hamburg to Hannover (because Hannover is the Hub). In Hannover the goods may even be reloaded before then being transported from Hannover to Berlin.
[http://www.logistikbranche.net/glossar/hub-and-spoke.html]

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