In a fragmented logistics structure, logistics activities are managed in multiple departments throughout an organization. * Because effective and efficient logistics is predicated on a high degree of coordination amoung logistics activities, such coordination can become difficult when the logistics activities are spread throughout an organization.
In a unified logistics structure, multiple logistics activities are combined into, and managed as, a single department.
A centralized logistics organization implies that the company maintains a single logistics department that administers the related activities for the entire company from the home office. * Advantage: Efficiency * Advantage: Allows an organization to take advantage of the cost savings that can arise from volume-crating opportunities
A decentralized logistics organization, in contrast, means that logistics-related decisions are made separately at the divisional or product group level and often in different geographic regions. * Advantage: Customer responsiveness
Heirarchical, or functional, organizational design has its foundations in the command and control military organization, where decision making and communication often follow a top-down flow. Also, each employee reports to one supervisor. * Advantage: Flexibility in exercising command in the sense that no one manager commands more than a “limited” number of employees. * Disadvantage: Societal changes, such as individuality and questioning authority, are not easily accommodated in a command and control philosophy.
Matrix design, one employee might have cross-functional responsibilities. * Advantage: The multifunction manager can be very responsive to customer requirements. * Disadvantage: The organization tends to be more costly because more managerial-level employees are necessary.
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