Decentralization is used by many companies to make better decisions and to operate more effectively. The idea is that decisions are made there, where information is promptly available. This applies in particular to plans and schedules. When sending plans and schedules to executional levels, it can be asked whether the people that execute the plan can also decide which work can be done best when. There seems to be an conflict between the hierarchically oriented concepts and the sociotechnical or lean concepts. A real business answer to the question ‘central or decentralized’ is: it depends. It can sometimes work well to make local decisions, and it also saves on expensive planning capabilities and systems.
In some cases, however, it does not work well, and autonomy can be better removed from the shop floor. For example: suppose there are a series of departments that supply each other, and one of those departments is the overall bottleneck. And imagine that this bottleneck can only be well-managed if the departments upstream work to a sequence which is less efficient to them. However, when local decisions are taken, it is likely that every individual department will chase their own priorities, and the overall bottleneck suffers. A lack of insight about the entire chain is the most obvious reason not to apply local decision-making. Another reason may be that planning and scheduling are very complex and it is not clear what consequences are precisely linked to a particular local decision.
Complexity is therefore an important issue in allocating autonomy. Another criterion is the need to make local decisions, which is related to the number of disturbances. If the situation is not too complex but there are many disturbances (some jobshops are like this), it is advisable to have some local autonomy and not send detailed instructions. On the other side, there are situations that are complex and relatively stable, such as some chemical production systems. But what about situations with many uncertainties and high complexity? These are the most challenging situations, and it could be a combination of central schedules and re-scheduling. At the same time, reducing process disturbances should get the highest priority: to make a situation manageable, because planning is impossible without predictability.