Supply Chain Hub and Spoke Model for Convenience Stores

Abstract

As grocery retailers have limited profit margin, the players in the industry are constantly looking for cost effective supply chain model for increasing profit margins. Any convenience store should have assortment which is more suitable for the local target customers but the company might receive the inventory from multiple sources. In this chapter we have proposed a new way to handle the supply chain for the convenience store, that is, Hub and Spoke model between Hypermarket/Supermarket/Supercenter and Convenience store. In this model Spoke (Convenience Store) receives all inventory from single source, that is, Hub (Hypermarket/Supermarket/Supercenter), hence there is a significant reduction in the logistics cost. This will allow the retailer to be more focused on customer service which in turn will make more loyalists for the store.