Centralized and decentralized logistics management

An enterprise is considered decentralized if their basis of function is autonomous. Every unit would be responsible for their own logistical planning as well as its execution. A centralized organization has the opposite policy. A central headquarters group directs logistical planning and execution. In today‘s organization, which is information-intense, the distinction between centralization and decentralization is becoming hazy. Recent trends have seen a shift towards centralized organizations. But with the recent developments in distributed information processing, a centralized logistics organization is no longer required for efficient data processing.

Logistical responsibility gets pushed down the organization, as a result. Basically, there is a direct relationship between the desired degree of centralization and the complete nature of business operations.

Customers who desire a host of products sold by different business units of a conglomerate have encouraged many cross-divisional or various business units. The availability of information technology is considered a major benefit of decentralization. Today‘s organizations, which are agile simultaneously, enjoy both centralization and decentralization.

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