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Inventory nodes in the distribution network should be properly defined to get agility benefits.
If we look at the finished goods distribution network of various FMCG and Pharma companies, there are vast differences in their design approach. Some companies believe in creating Plant Warehouse (PWH) and Regional Warehouses (RWH) on way to the CFAs. Some others prefer direct dispatches. While some of it is context specific, a large part of the difference arises due to their understanding of agility and the importance they attach to it.
There are two perceptions widely prevalent in the industry. The first one says that higher number of nodes would delay the flow of products through the network and bring down agility. The second perception is that more nodes would necessitate higher inventory carried in the system, thereby affecting freshness of products.
Both these perceptions need to be challenged.