He did address individual hierarchy with respect to production, the more you scale it the more you will need to have a unifying will in one person or a committee. Engels even throws in the ship example, where it is dangerous to not have everyone accept the words of the Captain.

Additionally, he goes on to explain the difference between administrative functions of a worker state and the bourgeois oppressive state, and that Anarchists seek to skip straight past Socialism without building the material conditions for it.