Capital shortages have become one of the most common and international problems faced by business and governmental organizations. The universal impact of insufficient operating capital has been a limitation upon the operational flexibility of the firm or agency. Inventories, because of their insatiable demand for working capital, are a popular victim of the economy axe. Too often these cuts are made without compensating changes in physical distribution procedures. A cut in the inventory level will change the configuration of material flow within an organization. An immediate impact of such action is a reduction in ability of the system to absorb shocks or surges from fluctuations in demand and supply. A reluctance of management to accept these shocks, while also realizing that no economic alternative is available, may contribute to the despair noted in many responses to a recent survey on control of customer logistics service. If a concerned management is willing to invest a small portion of saved capital from inventory cuts in a more responsive distribution control system, a majority of its system shocks may be eliminated — even in the absence of safety stock levels.