Under ‘Hub and Spoke Model’ meant for development of wheat Silos across the country, the Department of Food and Public Distribution has proposed to develop a capacity of 111.125 LMT of Silos at 249 locations across the country.
- With a view to modernise storage of food grains and to ramp-up the storage capacity for food grains in India, a new model ‘Hub & Spoke’ Model for implementation in Public Private Partnership (PPP) Mode has been proposed.
- The proposed Silos will operate under Design, Build, Fund, Own & Transfer (DBFOT) (FCI’s land) and Design, Build, Fund, Own & Operate (DBFOO) (Land of concessionaire/other agency) mode, through implementing agency i.e. Food Corporation of India (FCI).
What is ‘Hub and Spoke Model’?
The hub and spoke model refers to a distribution method in which a centralised “hub” exists. Everything either originates in the hub or is sent to the hub for distribution to consumers. From the hub, goods travel outward to smaller locations owned by the company, called spokes, for further processing and distribution.
Benefits of ‘Hub and Spoke Model’ –
- There are many benefits of the hub and spoke model, and it’s perhaps easiest to understand these by comparing the hub and spoke model to the model it was intended to replace: the point-to-point model. The exact opposite of the hub and spoke model, the point-to-point model has goods and services go directly from Point A to Point B without going to a centralised distribution hub.
- In the point-to-point model, transportation costs can actually be higher than in a hub and spoke model. This happens because more routes are created in a point-to-point model, whereas products can be grouped and efficiently shipped following set routes in a hub and spoke model.
- A hub and spoke model also makes it possible for transport drivers to travel shorter distances and stay in a more centralised area. That’s because drivers can switch at the hub. In a point-to-point system, there’s no company space for drivers to easily meet and switch.
Example of ‘Hub and Spoke Model’ –
Social media management tools act as centralised hubs where you can draft a single post and then schedule it for publication on sites like Facebook, LinkedIn, Twitter, Instagram, etc. In contrast, you would be using a point-to-point method if you logged into each social media site separately to draft and schedule the same post.