Hub & Spoke Model For GCPL Distribution Network.

1. A PRESENTATION ON HUB AND SPOKE
MODEL IN GCPL
PRESENTED BY
SHEETAL PAVAIYA

2. 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.
In Rural There are several small towns and villages away from the cities
where it is not feasible for the distributor in the city to supply goods due to
constrains of time, transportation costs, etc. In such cases, a Super Stockiest
(SS) is appointed by the company who receives the goods from the depot
and dispatches them to the Sub Distributors/Sub Stockiest (Sub DBs). The
Sub DBs in turn supply the goods to the retailers.
Introduction

3. Hub & Spoke Model

4. GCPL Distribution Model
Urban Distribution Model :- In GCPL Urban Model , first Stock Move from GCPL
CFA to GCPL Authorized Direct Distributor of Concern Area, Then this Direct
Distributor distribute the GCPL Stock to Retailer through his DSR
Urban
• GCPL CFA
Distrib
ution
• GCPL DISTRIBUTOR
Model
• RETAILER

5. GCPL Distribution Model
Rural Distribution Model :- In Rural Distribution Channel GCPL Stock first move
From GCPL CFA to GCPL Authorized GCPL Super Stockiest, which carry forward the
Stock to Sub-Stockiest level situated in Base Villages, who are responsible to cater the
Retailer market with the help of GCPL ISR and also Responsible to Cater van Market by
own Ready Stock Van Services which Partially or Fully paid by company.

6. Each SS deals with numerous Sub Stockiest/ Sub DB. The town where the SS is located is
generally in the Centre of the towns where the Sub DBs would be located (hence the SS
represents a Hub and the Sub DBs represent the spokes). The prime task of the SS is to
dispatch the goods to the Sub DB and a SS is generally not required to sell the goods in
the open market. The SS gets a fixed percentage of margin and also in most cases, the
freight incurred to dispatch the goods to the Sub DBs is reimbursed by the company.
The prime role of the Sub DBs is to sell the goods to the retailers (retailing) and
wholesalers in their respective towns, for which they get a fixed margin (the margins
given to the Sub DBs are generally higher than the margins given to a SS because of the
difference in volume). A company representative generally visits the Sub DBs at regular
intervals and helps them in retailing. Pilot Sales Representative (PSR), Rural Sales and
Distribution Representative, Interior Sales Representative are some names given to the
company representative who works with the Sub DBs.

7. The PSR/ISR also serves as a link between the SS and the Sub DB, and is also
responsible for adding new towns and Sub DBs. The PSR generally visits the Sub DB
towns based on the volume of sales, future potential, competition, etc. It is also the
responsibility of the PSR to ensure that the SS and Sub DBs focus on range selling
rather than focusing on some selective products that are high in demand. Also, the
PSR/ISR is required to ensure that goods are dispatched to the Sub DBs on a regular
basis. Regarding this, let us now understand the two terms “Billing Efficiency” and
“Distribution Efficiency”.
Billing Efficiency: Billing efficiency refers to the % of Sub Stockiest/Sub DBs to whom
goods are sent by the SS during a month. For example, if a SS is responsible for
dispatching goods to 10 Sub DBs, and goods are dispatched to 9 of them in a given
month, the Billing Efficiency would be 90%
Distribution Efficiency: Distribution efficiency refers to the % of brands that are billed
to a particular Sub Stockiest /Sub DB by the Super Stockiest during a month. For
example, if among 20 brands and 14 of them are billed to a particular Sub stockiest,
the Distribution Efficiency would be 70%.