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Convergence and Divergence points serve as good nodes for inventory buffer.
If we are designing an agile distribution network working on replenishment principles, we need to identify locations where strategic inventory buffers should be maintained. A good starting point is to look for locations where supplies converge from multiple upstream nodes, as well as those locations which are used to service multiple downstream nodes.
Keeping buffers at convergence points helps in consolidating supplies coming from multiple sources, thereby improving the frequency of servicing the downstream lanes.
Holding inventory buffers at divergent points gives us the flexibility to deploy it at any of the downstream nodes at the last moment. It is akin to the concept of delayed differentiation applied to stock deployment.
If a node is both convergent as well as divergent, it assumes a very significant role in the agile network. Regional Warehouses (RWH) are an excellent example of such nodes.