Summary
- The hub and spoke model has become the go to model for Q Commerce players with micro fulfillment centers and dark stores that enable hyperlocal deliveries.
- Q Commerce companies have successfully decentralized the traditional model and are creating many smaller hubs through their dark stores.
- One has to make sure that their logistics platform supports such decentralized operations which may require more intense coordination and communication processes.
The rise of Q commerce in India and worldwide
The 10 minute delivery model has had its share of conversation worldwide as well as in India. In the sub continent companies like Zepto, Blinkit, Grofers and Zomato have geared up for the 10 minute delivery model and have taken the last mile race to the very next level.
The global Q commerce business was valued at around $25 billion in 2021and is expected to grow to $72 billion by 2025. A Euromonitor Report estimates that there are close to 30 Q Commerce startups that are operating in western europe alone and the trend seems to be catching up in the rest of the world.
How do Q Commerce companies operate?
Q Commerce companies use ‘dark stores’ also known as micro fulfillment centers. Each dark store has a customized inventory based on the demand predictions for that area. When you place an order on the app or the website of the Q Commerce company, they would redirect it to the dark store nearest to your location, the order is picked and packed within one or two minutes, a delivery vehicle and person is assigned and before you can blink, they are on their way to your door step.
What is the Hub and Spokes Model?
The hub and spoke model is not new. But the way Q Commerce companies are using it is definitely new. In a hub and spoke model, the inventory is stored at a central location and deliveries are made in a limited area in and around that hub. In normal delivery models, there are only one or two hubs for an entire city and the deliveries happen throughout the city. This is a centralized model.
How are Q Commerce companies using the Hub and Spokes Model?
The hub and spoke model has become the go to model for Q Commerce players with micro fulfillment centers and dark stores that enable hyperlocal deliveries.
Q Commerce companies have successfully decentralized the traditional model and are creating many smaller hubs through their dark stores. Deliveries happen through two-wheelers which have the advantage of faster movement. While the centralized model gives Economies of Scale, the decentralized model allows Economies of Specialization.
By understanding the demand patterns for a given area and storing only those items in a relevant dark store, Q Commerce companies effectively bring the inventory closer to the customers than traditional retailers. They can aggregate order volumes through an app or a website, and thus operate profitably.
The delivery side of the decentralized hub and spoke model
In the decentralized model the focus is on time. The MFC is organized to facilitate fastest picking and packing. Once the order is ready, then it has to be shipped to the customer location within the shortest possible time.
There is no time to wait for consolidating orders. The shorter the promised delivery ETA, the lesser the time to wait for order consolidation. This means more trips and tighter coordination between the remote office and field staff.
This also puts pressure on communication as customers need to be available for taking the orders when the delivery person arrives or opt for contactless delivery, where the delivery person can leave the package in a safe place for delivery.
Such a process requires fast methods of communicating with the customers and the support of an E Proof of Delivery System with images as proof of delivery and an audit trail that can be accessed to trace the parcel in case of a customer complaint.
How Logibee implements the hub and spoke model?
Logibee has been built based on the expertise of logisticians who have more than two decades of experience in international and domestic logistics. Here’s how you can create and manage a complete hub and spoke model for your Q Commerce business:
- With Logibee, you can divide your area of operation into different zones. With the latest feature update you can select a specific location within the zone to be a hub or depot. Each depot serves as a parcel pickup location.
- Each depot can be assigned a supervisor, who can see all the delivery operations that happen through the depot. Several depot’s can be assigned to a zone manager and the zones within the city can be assigned to a city manager.
- Once an order is received and the parcel is ready, it can be assigned to a delivery partner with an AI generated route that minimizes the time taken to deliver the product.
- Whether you are having your own dark stores or you are partnering with local retailers for your order fulfillment, you can quickly add those locations as depots and start your parcel pickups from those locations within minutes.
- Logibee’s AI powered routing and scheduling application helps you to figure out the fastest and the shortest routes for each trip. On field agents can verify and accept or reject parcels for delivery. Each trip can be quickly and meticulously planned.
- Depot supervisors can have a clearcut view of all the trips scheduled and the live location of drivers and accurate delivery ETAs in real time. They can get alerted to any exceptions and take proactive actions.
- With Logibee’s built in communication sequences, your remote office or your delivery partner can communicate with the customers via Call, SMS and Email.
- Logibee also has a state of the art E Proof of Delivery system with image as proof of delivery. The system also can generate a detailed audit trail which can be accessed and analyzed in case of a customer complaint.
Conclusion:
Whether you want to run a nation wide, multi-city operation with 100s of MFCs or scale it down to a single location with a single depot and a small delivery fleet, Logibee is the perfect solution for you. Connect with us now to expand your delivery operations without losing control. With Logibee, all your information needs are fully addressed and your operations are streamlined without blinking an eyelid.