Learn more about the system of Transgroup global logistics and its features

Scan global logistic: centralization, strategy development, synergy concept

When addressing the Transgroup global logistics, there are some questions. One of them concerns the desire for centralization in comparison with local autonomy. Traditionally, many companies, including Transgroup international, prefer to delegate decision-making to the local level. However, in this case, it is extremely difficult to optimize service levels and cost indicators of global supply chains, since planning and management are conducted on a fragmented, local basis. On the other hand, the attractiveness of local autonomy is evident in terms of the ability to respond to the market and maintain proximity to the buyer.

red and blue cargo containers on brown wooden dock during daytime

The second question is the synergistic effect of globalization and compatibility with local decision-making process regarding supply, production, and distribution. For example, many global companies organize centers of excellence and training, particularly in R & D and production, which allows them to concentrate resources and/or technology. However, the separation of production units and R & D units from the market do not always give a positive effect, especially if these markets are not homogeneous. Along with these problems, there is also the question of how economies of scale and the benefits of standardization can be subordinated to the need to meet local requirements. Each of the three issues has a significant impact on the logistics situation in the structure of the global company, and each must be discussed in detail.

Centralization or local autonomy

A widespread view is that globalization implies centralization of management and control. However, despite the attractiveness of centralized planning and strategy formulation, there is a fundamental conflict between centralization and the need to stay as close as possible to local markets. In the case of logistics’ planning, centralized decision-making process is required with subsequent implementation on the ground. Many companies have moved from centralized decision-making to centralization of production and distribution capacity.

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The modern logic of managing the integrated supply chain assumes that, if possible, commodity stocks should be kept in as a few places as possible and in a universal form so that when real demand is clarified, it is possible to localize or individualize these goods.