Overview
The Hub & Spoke planning models are designed to optimize inventory management by aggregating usage and adjusting lead times based on specific requirements of hubs and spokes. Recurrency now supports both flexible and strict hub and spoke models.
💡 Successfully using either model requires that you have a defined replenishment path for your stockable inventory. Enabling this feature without setting replenishment paths will lead to no change in how Recurrency makes min/max recommendations. Additionally, after updating a setting, it can take up to 24 hours for the changes to take effect.
Flexible Hub and Spoke
Who is this model best for?
This model is ideal for companies with flexible supply chains and decentralized purchasing systems.
In the Flexible Hub and Spoke Model, Recurrency calculates the minimum and maximum inventory levels for each item at a specific location. The calculation considers the total lead time taken for inventory to move from the supplier to the location, including all intermediate steps (i.e. transfers between locations) if defined.
How it Works
In a Flexible model, Recurrency helps by:
Recommending min/max levels for each spoke → so that you're able to order directly to the spoke, or so you know when and how much to transfer from the hub to keep the spoke stocked.
Recommending min/max levels for the hub → focusing only on what the hub itself needs to stay stocked.
Given that this is a Flexible model, requirements are not aggregated, and each location plans for itself.
💡 Important: Each recommendation (hub or spoke) is based only on that location’s own historical usage. This model focuses on calculating the minimum and maximum inventory levels for each stockable item at a specific location.
Spoke recommendations are driven by the spoke’s past demand, lead times, order cycles, safety stock, etc.
Hub recommendations are based solely on the hub’s own demand — not automatically factoring in spoke needs.
The recommendation calculations consider the total lead time taken for inventory to move from the supplier to the location, including all intermediate steps (e.g., purchase to hub, transfer to spoke).
Even if you override a spoke’s min/max, the hub’s forecast doesn’t automatically adjust — because it’s calculated separately, based on each location's usage and forecasts.
You can then use Purchase Groups to aggregate the requirements of all locations into a single purchase to the hub for all of the locations.
Why should I use it?
Suitable for companies with flexible supply chains and decentralized purchasing systems.
Allows flexible recommendations and purchasing strategies.
Offers a clear breakdown of each location's needs.
You have not defined clear replenishment paths for all items across all locations.
Strict Hub and Spoke
Who is this model best for?
This model is best suited for companies with well-defined replenishment paths and centralized purchasing operations
Strict Hub and Spoke focuses on the combined usage of an item at a hub location and all its dependent locations (spokes). The min/max levels for hub locations are determined based on the aggregate usage of the hub and its spokes. The min/max levels for the spoke locations are then recommended as the amount to make sure are always being transferred in.
How it Works
In the Strict model, Recurrency helps by:
Recommending min/max levels for each spoke → based on the spoke’s own historical demand, lead times, order cycles, and safety stock. These min/maxes guide how much you need to transfer from the hub.
Recommending min/max levels for the hub → by aggregating usage from both the hub itself and the spokes it supplies.
Because Recurrency recalculates this aggregated usage internally, the numbers you see for item usage at these locations may not match what’s shown in your ERP — Recurrency adjusts them for planning accuracy.
💡 Key difference from the Flexible model:
In Strict, the hub’s min/max recommendations already account for spoke demand.
If you have one hub and multiple spokes, the hub’s min/max is calculated to cover both:
➔ its own local demand and
➔ the transfer needs for the spokes.
Even if you override a spoke’s min/max, the hub’s forecast doesn’t automatically adjust — because it’s calculated separately, based on aggregate forecasts (from historical demand across locations).
Here’s the split:
Spoke forecasts → based only on that spoke’s historical demand (to guide transfer amounts)
Hub forecasts → based on combined historical demand across hub + spokes (to guide purchasing)
Additionally, Recurrency adjusts lead times for spokes to match transfer time from the hub, ensuring accurate replenishment timing.
Why should I use this model?
It reduces variance of usage across the company by aggregating uncertainty, enabling lower overall safety stock. This can lower your overall held inventory over time by centralizing the majority of the safety stock in a hub instead of each of the spokes.
It clearly separates purchasing and transferring processes.
To learn more about how to enable either of these models, visit our Settings Page help article.
Both Hub and Spoke models introduce the concept of replenishment paths, which define how inventory should move through your different locations.