Hubs & Spokes of Redesigned Network

Business Case:

A food & beverages industry faced difficulty with handling slow-moving and fast-moving inventories altogether. They were looking for a strategic approach to get rid of their challenges

Business Situation:

Slow-moving SKUs choked the warehouses and caused a bottleneck in warehouse operations. Moreover, due to inefficient warehouse operations, the organization was losing the shelf life of such products, causing increased warehouse wastages. The industry wanted to handle such SKUs more effectively so that the inventory is reduced without impacting the service levels.

Solution:

We came up with a strategic Hub & Spoke model for the organization. The model identifies the hub warehouses & respective spoke warehouses. All identified slow-moving SKUs are now stored only at the hubs and are shipped to spokes whenever an order arrives at the spoke location. The model reduced the safety stock of the slow-moving items significantly. Warehouse operations for spokes are now simplified and become efficient.