Reactive destocking (original) (raw)
Reactive destocking in supply chain management is a reduction of the inventory when expected demand goes down. When a company is only doing reactive destocking, the desired inventory to sales ratio, remains unchanged. Reactive destocking in general is done by operational managers of the logistical activities, without additional instructions. The inventory can include finished products, raw materials and/or goods in process. The terms "reactive de-stocking" and "active de-stocking" were first used in an article about the Lehman wave, published by Dutch researchers in 2009.
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| dbo:abstract | Reactive destocking in supply chain management is a reduction of the inventory when expected demand goes down. When a company is only doing reactive destocking, the desired inventory to sales ratio, remains unchanged. Reactive destocking in general is done by operational managers of the logistical activities, without additional instructions. The inventory can include finished products, raw materials and/or goods in process. The term "reactive destocking" is relevant when it is used in connection with active destocking. Active destocking refers to an active decision to reduce the inventory to sales ratio of a company. In general, active destocking is done following an autonomous, often financial decision by a company to improve its efficiency, freeing up cash and reducing its costs. Decisions for active destocking in general are made by financial executives or general managers. The terms "reactive de-stocking" and "active de-stocking" were first used in an article about the Lehman wave, published by Dutch researchers in 2009. A Lehman wave refers to an economy-wide fluctuation in production and in economic activity with a wavelength of between 12 and 18 months, driven by a sudden major disruption of the economic system. The Lehman Wave is a dampened, wave-like fluctuation around equilibrium. The amplitude of the Lehman wave is larger for a business that is further away from its end market than for a business that is closer to its end market, which difference is caused by cumulative destocking of the intermediate supply chain. The first described Lehman wave was caused by global active destocking, followed by reactive destocking after the financial panic following the bankruptcy of Lehman Brothers on September 15, 2008. The Lehman Wave can have strong effects on the sales volume and therefore on the profitability of companies higher in the value chain. (en) |
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| rdfs:comment | Reactive destocking in supply chain management is a reduction of the inventory when expected demand goes down. When a company is only doing reactive destocking, the desired inventory to sales ratio, remains unchanged. Reactive destocking in general is done by operational managers of the logistical activities, without additional instructions. The inventory can include finished products, raw materials and/or goods in process. The terms "reactive de-stocking" and "active de-stocking" were first used in an article about the Lehman wave, published by Dutch researchers in 2009. (en) |
| rdfs:label | Reactive destocking (en) |
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