Organizing Timebased Distribution in Transnational Corporations : Interaction Between Logistics and Organizational Structures

Abstract: Currently, physical distribution structures for industrial goods are changing. This change is expected to increase in scope over the next few years, facilitated by the advancement of Information Technology and transport systems, and the removal of border frictions. Traditional physical distribution channels, linked from factory warehouses through central warehouses, regional warehouses and local sales subsidiaries' warehouses to customers are replaced by direct distribution to customers from factories or, in many cases, via one or two European distribution centres. This emerging structure has been labelled Timebased Distribution, because of the focus on time instead of distance.One of the biggest hurdles to overcome, when implementing innovative logistics solutions such as timebased distribution, has been noticed to be of organizational nature. Further, it has been argued that logistics could be a driving force for organizational change, especially in the "Europeanization" of transnational corporations in Europe.The purpose of this study is to contribute to the knowledge of organizing timebased distribution, especially the two issues of:1) how to organize timebased distribution, with the focus on the responsibility of different physical distribution activities and ownership of goods.2) how timebased distribution affects the organizational structure.Current theory has neither explicitly treated the organization of timebased distribution, nor how new physical distribution structures affect organizational structures. This study contributes by developing conceptual models of e.g.• the organization of timebased distribution in different organizational structures of transnational corporations;• how responsibility, control and execution of different activities, and ownership of goods are allocated between different organizational units;• the transition of autonomous sales subsidiaries into lean sales branches with centralised administration;• how timebased distribution lays a platform for changing the organizational structure, especially regarding sales subsidiaries.

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