Centralized and decentralized control: Finding the right combination

Abstract

The purpose of this paper is to introduce a more differentiated discussion of choosing an appropriate combination of centralized and decentralized planning and control. Based on identification of three main production control tasks, respectively focusing on customer orders, materials and capacity, we shall introduce a model to illustrate different decentralization strategies. The model has been used in industrial companies and stimulated constructive discussions. To provide a better background for determining an appropriate control strategy we shall introduce a model with four interacting perspectives, representing major contextual elements. A case example is introduced and used to illustrate the use of the two models. Although by far not exhaustive, it is concluded that the two models have led to a more differentiated discussion of the important issue of finding an suitable combination of centralized and decentralized production control.