Depending on one warehouse in India leads to some serious logistics problems, such as increased freight charges and delays in delivery. By distributing inventory across strategically chosen theme locations like Gurgaon in the North, Mumbai in the West, and Bengaluru in the South, the distance to the end consumers is reduced. This step reduces the number of zones and increases Turnaround Time (TAT).
The Impact of Multi-Hub Distribution on Shipping Zones and TAT
| Metric | Single Centralized Hub | Multi-Hub Distribution (Gurgaon, Mumbai, Bengaluru) |
|---|---|---|
| Average Shipping Zone | Zone D / Zone E (Cross-country) | Zone A / Zone B (Intra-city & Regional) |
| Turnaround Time (TAT) | 3 to 5 Days | Same-Day to 24 Hours |
| Last-Mile Transit Costs | High (Long-haul air/express surface) | Low (Local surface dispatch) |
| RTO (Return to Origin) Rate | High (Due to transit delays) | Significantly Reduced |
Benefits of Splitting the Regional Hubs
- Avoidance of Transit Friction Between the States : The use of regional hubs would eliminate the use of long hauls for delivery.
- Reduction in Zone-level Costs : The transportation costs of Zone A and B are much lower than those of Zone D or E, respectively.
- Facilitation of same-day and express delivery : To meet the 12-to-24-hour delivery requirement of major e-commerce platforms, inventory needs to be maintained in the local area.
Handling a Multi-Hub Fulfillment System
Demand Forecasting and SKU Assignments
Monitor regional sales velocity for optimal inventory distribution. High-velocity SKUs should be stored in all three hubs, while low-velocity SKUs should be stored in a main hub.
Distributed Order Management System (DOMS)
Use software that routes orders to the closest fulfillment center with stock, thus minimizing shipping distances and costs.
Unifying Your Logistics Network
To manage multiple regional distribution centers requires a cohesive software program and standardized procedures. Edgistify is an industry player that helps brands establish logistics warehousing networks in different locations in the metro area.