The Challenge of Distributed Fulfilment
As your business expands globally, simple, linear fulfilment stops working. Relying on a single distribution centre (DC) means longer shipping times and higher costs for international customers. The solution lies in adopting a Hub and Spoke fulfilment model. This strategy uses a central “hub” (often your main DC) and multiple “spokes” (regional warehouses, 3PLs, or stores) to move goods closer to the customer.
The key to making this work is a cascading logic system within your Order Management System (OMS). This system instantly analyses every order and automatically routes it to the most efficient spoke, optimizing for cost, stock availability, and speed.
Step 1: Define Your Fulfilment Hierarchy and Costs
Before you build the rules, you must define the operational hierarchy of your sites. Not every warehouse is equal in cost or speed.
- Map Locations: Clearly define all your Hubs (main DC) and Spokes (e.g., EU 3PL, US warehouse, key retail stores).
- Assign Priority: Determine the ideal sequence. For a French customer, the EU warehouse is the highest priority. For a UK customer, the UK warehouse is first.
- Document Costs: Record the true cost of fulfilment for each location. This includes the pick/pack fee, carrier costs, and any cross-border duties. This data is essential for the OMS to make profit-driven decisions.
Action: Consolidate all location data and associated costs into a centralised platform. This provides the input for your automated routing logic.
Step 2: Build the Cascading Fulfilment Logic
The cascading logic is the intelligence behind your Hub and Spoke model. This is where you create IF/THEN rules for the OMS to follow, ensuring a single, successful route is found for every order.
The logic should be built on three core pillars: Destination, Stock, and Cost.
- Check Destination First: If the delivery address is in France, the system immediately checks the French Spoke first.
- Check Stock: If the French Spoke has the required inventory, the order is routed there. (SUCCESS)
- Initiate Cascade (Stock Out): If the French Spoke is out of stock, the system automatically cascades to the next best option (e.g., the closest Hub in the UK).
- Final Fail-Safe (Cost/Time Check): The system verifies the cost difference between the UK Hub and perhaps a distant dropshipper. It selects the route that meets the service level agreement (e.g., 5-day delivery) at the lowest possible cost.
Outcome: This automated, instant decision prevents manual intervention and guarantees the order is always fulfilled from the most optimal location available.
Step 3: Automate Inventory and Tracking Sync
For the Hub and Spoke model to function without errors, stock and tracking data must remain perfectly consistent across all locations and systems.
- Real-Time ATP: The central OMS must constantly pull Available to Promise (ATP) stock figures from every Spoke location. This ensures the routing logic always uses the most current data.
- Tracking Consolidation: Once an order is fulfilled by a specific Spoke (be it a 3PL in Germany or your DC in the UK), the tracking data must instantly flow back to the central OMS. The OMS then synchronises this tracking information with the original sales channel (website, ERP, marketplace).
- Invoicing Alignment: The OMS must pass the fulfilment location information to the ERP. This ensures the finance system can correctly attribute inventory deduction and cost of goods sold to the correct legal entity or cost centre.
Modulus365: Global Fulfilment Without the Custom Code
Implementing robust, cascading Hub and Spoke logic often requires expensive, custom-built middleware, which quickly becomes unmanageable.
Modulus365 provides this critical functionality out of the box.
- Our platform allows you to define complex routing rules based on destination, stock levels, and carrier costs.
- We manage the cascading logic automatically. Orders instantly move from your preferred Spoke (e.g., EU Warehouse) to the next (e.g., UK 3PL) without any manual intervention.
- Modulus365 centralises all inventory and tracking data, giving your team and your customers complete, real-time visibility regardless of which country the order ships from.
