Decentralized vs. Centralized Manufacturing: What’s the Difference?

Jonny Parker
May 2, 2023

Learn about the benefits and differences of both approaches.

view of a warehouse shelving aisle

It’s no secret that manufacturing is crucial to the global economy. It transforms raw materials into goods we consume daily, drives economic growth, creates jobs, boosts innovation, and helps countries participate in global trade.

But not all companies use the same manufacturing approach, with some opting for decentralization over centralization and vice versa. 

What’s the difference? Which approach is better? Here’s what you need to know. 

What is centralized manufacturing? 

Centralized manufacturing is a production model where manufacturing occurs in a single central facility. 

What are the pros of centralized manufacturing?

  • High economies of scale. Companies that produce large volumes of standard products often use centralized