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The Spoke-hub distribution paradigm (also known as a hub and spoke model or hub and spoke network) derives its name from a bicycle wheel, which consists of a number of spokes extending outward from a central hub. In the abstract sense, a location is selected to be a hub, and the paths that lead from points of origin and destination are considered spokes. The model is commonly used in industry, in particular in transport, telecommunications and freight.
Analysis of the model The hub-spoke model is most frequently compared to the point-to-point transit model. Benefits Drawbacks Commercial aviation FedEx founder Fred Smith pioneered the hub and spoke model for overnight package delivery in the mid-1970s. Smith established his company's hub at Memphis International Airport (Memphis, Tennessee). Soon after, other firms like UPS and Airborne had no choice but to develop their own hub and spoke model given the natural superiority of this system for speedy delivery of packages. In addition to FedEx, Delta Air Lines pioneered the hub and spoke system in the passenger transportation industry at its hub in Atlanta, Georgia to compete with Eastern Air Lines. In the early days of FedEx, customers would be surprised to learn that all packages went through the Memphis hub, even packages between relatively close cities such as San Francisco and Los Angeles. While it seems inefficient at first, in reality the aircraft leaving San Francisco would have packages for many destinations, and likewise the aircraft heading for Los Angeles would have packages from many sources. More recently, airlines have extended the hub-spoke model in various ways. One method is to create additional hubs on a regional basis, and to create major routes between the hubs. This reduces the need to travel long distances between nodes that are close together. Another method is to implement point-to-point service for high traffic routes, bypassing the hub entirely. Hub and spoke industrial district The "hub and spoke" has also been used in economic geography theory to classify a particular type of industrial district. Ann Markusen, an economic geographer, theorised about industrial districts where a number of key firms and/or industrial facilities act as a hub with associated suppliers and firms spread out across the economic landscape like the spokes of a wheel. The chief characteristic of such hub-and-spoke industrial districts is the domination of one or more large firms, in usually one sector, surrounded by smaller associated stakeholders. Examples of cities with such estates include Seattle with Boeing and Toyota City with Toyota. | ||||||||
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