1. The Times 100 Business Case Studies Edition 16
Competitive advantage through efficiency
Aldi

2. Introduction to Aldi Retailer in international markets since 1913
Over 7,000 stores worldwide
Takes a distinctive approach to retailing
Business focuses on principles of ‘lean production’
Savings passed on to customers
Reinvestment of profits enables business growth
Core purpose = to provide value and quality to customers

3. Aldi core values Simplicity Consistency Responsibility
Fewer varieties of brands/products offered at value prices
Consistency
All stores have same simple design
Responsibility
Active role in the supply chain ensures improvement
Training and developing employees drives quality customer service

4. Lean production ‘Lean’ avoids waste or duplicated effort
Techniques most often used in manufacturing industries
Principles equally apply to service industries
‘Lean’ avoids waste or duplicated effort
Focuses on using resources efficiently
Minimise cost
Save time
Reduce waste

5. Reducing costs and eliminating waste
Continuous improvement
All employees focus on quality
Staff trained to become multi-skilled
Allows flexibility across tasks and roles
Time-based management
60% of Aldi’s fruit & veg sourced locally, reduces fuel miles
Efficient till operations increase speed of checkout
Store opening hours shorter
Sales contained in less time, so staff costs less
Reduced use of power/heating etc

6. Reducing costs and eliminating waste (cont)
Just-in-time production
Stock only bought when needed
Releases working capital
Eliminates storage costs
Ready-to-display cases reduce handling in stores
Total quality management - ‘Right first time’
Empowering staff improves motivation
Strong relationship with suppliers
Improves product offerings
Helps suppliers meet international standards

7. Benefits of lean production
Aldi differentiates itself from competitors
Achieves cost savings across the organisation
Customers benefit from keen prices
Savings put back into business and CSR activities