The realization of increased service flexibility and scalability through the combination of Virtual Network Functions (VNF) and Software Defined Networks (SDN) requires careful management of both VNF and forwarding state. Without coordination, service scalability comes at a high cost due to unacceptable levels of packet loss, reordering and increased latencies. Previously developed techniques has shown that these issues can be managed, at least in scenarios with low traffic rates and optimistic control plane latencies. In this paper we extend previous work on coordinated state management in order to remove performance bottlenecks, this is done through distributed state management and minimizing control plane interactions. Evaluation of our changes show substantial performance gains using a distributed approach while maintaining centralized control.