The impact and dynamics of centralization in supply chain decision-making
Name
310115223-MIT.pdf
Description
Full printable version
Size
13.08 MB
Format
Adobe PDF
Checksum (MD5)
5c8737ce70d0b1428e93834271c632eb
Author(s)
Sohn, Tae-Hee
Rangavittal, Guruprakash (Guruprakash Coimbatore)
Advisor(s)
Chris Caplice.
Alternative Title
Economics of centralization in supply chain decision-making
Date Issued
2008
Publisher
Massachusetts Institute of Technology
Abstract
Companies with a corporate supply chain department and multiple business units use one of two methods for their supply chain decision-making: centralized decision-making where supply chain decisions are made at the corporate level by the central supply chain department or decentralized decision-making where supply chain decisions are made at a business unit level. We investigate the hypothesis that a centralized organizational structure helps companies lower costs and a decentralized organization structure enables companies to quickly respond to customer needs on a real time basis and improve customer service. To evaluate our hypothesis we surveyed industry current practice. Based on our analysis from the survey, we identified three factors that influence companies to adopt either a centralized or decentralized organization structure: customer service, supply chain management cost, and organizational control. We identified that a "hybrid" structure, where strategic functions are centralized and operational functions are decentralized, had the lowest supply chain management cost percentage to sales.
Description
Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2008.
Includes bibliographical references (leaves 88-89).
Subjects
Engineering Systems Division.
MIT Department
Massachusetts Institute of Technology. Engineering Systems Division
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