Introduce efficiency and savings with a hub and spoke solution

Ian Hampson - Chief Technical Officer
23rd March 2022

Energy prices, fuel, basic ingredients, everything is inching up in price and the cost of living is on the rise. So wouldn’t it be good if there was a way you could introduce cost savings for your business? There is, and it’s called ‘hub and spoke’.

If you’re holding goods in a number of warehouses to meet customer orders across a region or even across the country, you might find you start doubling up on products. That’s inefficient on a number of levels. You’re not just paying for twice the space you need, you’re also paying for twice the manual work to process those products. Not only that, if the items in question are chilled or have a short shelf life, there’s a danger that they may go to waste.

By going about things a different way, you can introduce efficiencies into your storage and save money in the process. Nominate a depot as your hub, where you keep the majority of stock, and you free up your other depots to act as your spokes, where you can store fast-moving or critical lines.

Your spokes don’t need to be as large as the hub, and they don’t need to take up vast amounts of labour either. After all, if you’re storing the bulk of your products at the hub, then you can forget about tasks like goods receipt, putaway, stock count and replenishment at your spokes.

Suddenly your supply chain starts to get a whole lot more efficient. By buying everything centrally, you can take advantage of economies of scale to introduce more savings to the business. And there’s no longer any need to worry about meeting minimum order quantities either.

This new way of operating can create opportunities to add niche suppliers to the mix. Perhaps there’s a particular artisan brand or specialist product that you’d always thought you just couldn’t sell enough units of to justify stocking in a depot. But with a hub and spoke model, you can store that brand centrally and distribute it out to your other depots according to customer demand.

Pretty soon you’ll find you’re selling a broader range of items and offering a greater product range to your customers. That’s not just good news for your bottom line, it makes the whole experience better for your customers too.

Next you can start to box really clever by introducing ERP software to automate your processes. The software can make sure your stock is all in the right place for servicing customers in the most efficient way possible. So instead of you having to worry about where units need to be, you can properly focus instead on how many are needed.

Automation also means that you can match invoices and receipts easily without human intervention (and human error!). Your supply chain and finance teams are only dealing with one invoice from a supplier, rather than lots and lots of transactions. Again, that saves time and resource as you can free up your finance team to focus on more worthwhile tasks.

Qnetex is a food service-specific ERP that enables you to take full advantage of hub-and-spoke efficiencies. It helps you make the best use of and makes your processes more efficient. With total visibility of all the stock across each of your depots, you avoid wastage and any lost costs, while improving your range to give your customers more everywhere. And you can automate the movement of goods between your depots, find the most efficient ways to store stock and work as efficiently as possible to bring your costs down.

At a time when we’re heading towards higher prices, now could be the perfect time to take the hub and spoke approach and back pedal on some of those inefficient costs.

To find out more about hub and spoke and Qnetex get in touch!