Suchareactivemanagement
can besuccessfulfromtheserviceperformancepointofviewif
the company’sinventorymanagementisperformingwell,but
nevertheless itcanbecomeveryexpensiveforthewholechain.
The reasonforthisisthattheoptimizationofasinglestocking
echelon oramemberofthedistributionchaininalarge
distribution networkproducessub-optimalresultsforthewhole
supply chain.Itcanactuallydecreasethewholechain’sperfor-
mance, forexampleifsomestoragelocationschangetheir
replenishmentbehaviorintheirbenefitsothatdemandtypes
change fromstabletounstableinthedistributioncenter.These
are theexamplesofwhythenarrowscopeofreactivemanage-
ment isnotsufficientifthereisaneedtoincreasedistribution
chain performancewithoutgeneratingexcessiveinventorylevels
and costs.