Table of contents:
Brief info about the three retailers ...............
3
Tesco.Logistics
Operations ............................5
Aldi and LIDL Value Chain
Analysis ...............10
Conclusion ....................... .............................
12
References .................. ..................................
13
LIDL
The beginnings of the Lidl chain dates back to 1930. At this time, Josef Schwarz
became a personally liable partner (general partner) in the tropical fruit
wholesaler Lidl & Co. in Heilbronn. The company was in "Lidl & Schwarz KG" was
renamed and expanded rapidly become a wholesaler for the entire food industry.
After the company had been destroyed in 1944, the Reconstruction was within
ten years. The company was awarded again in 1954 in Heilbronn, a private
residence and was in the same year in the "A & O chain" field. 1968 the first
supermarket was opened under the name "Handelshof" in Swabian Backnang.
Four years later, Josef Schwarz moved its headquarters from Heilbronn to nearby
Neckarsulm. Joseph Black died 1977 at the age of 74.
LIDL founded in the UK in 1994, Lidl has increased systematically and these
days have greater than 580 UK stores. While it is still a small in the UK in a
grocery market share of less than 5%, its importance along with that of
continental no-frills competitor Aldi is increasing.
Between other brands, Lidl has the Silvercrest brand; it manufactures electronic
products like satellite and Freeview receivers
ALDI
Beginnings 1913-1946
Karl Albrecht sen. (Father of Karl and Theo Albrecht) was trained as a baker until
he was forced to retire for health reasons this work. Independently as bread
merchant and his wife Anna Albrecht (born Siepmann) opened under the name of
her husband. Bread Anna Albrecht von Stauffenberg was referring to the bread
factory (today a supplier of Aldi).
Second War period 1946-1960
After the Second World War, Karl and Theo took over the family business in
1946. Expanded more and more and had made in 1950 to a food chain of 13
stores conventional character.
Distribution in 1960
1960, the year the division into Aldi North and Aldi South, there were already
300 stores with a turnover of 90 million DM existed At that time, two separate
companies with central management and central warehouse.
4
Tesco
Logistics Operations:
Tesco operates local and worldwide sourcing. There has been continuous
development in the distribution and operation strategy of Tesco which can divide
majorly into four phases.
It was direct delivery at the beginning from the providers to the stores, this
transformed into centralized area of distribution system as the 2nd move in the
late 1970's.
The third move was a complex distribution strategy in the late 1980's and in the
1990's it was the perpendicular collaboration in the supply chain as the fourth
move.
Under its perpendicular collaboration strategy, the concentrate has been to
simplify the supply chain operations with the usage of information technology
and sharing information by the supply chain to create an effective and efficient
supply chain.
Sharing information with the providers began in 1997 with the establishing of
commercial safe data exchange and swap system based on the internet to
simplify the providers with information on the existing inventory holdings.
This was with analysis on the main distribution (manufacturer to distribution
centre) to apply changes that added net value by the entire supply chain. Once
the main distribution was steady, there was business stimulus to create the
logistics and flow of material streamline to create another cost-benefit
specialization. This guided to negotiation of more competitive distribution rates.
This process of lasting change and development has guided to radical reduction
in the lead time to stores and from providers.
Tesco Logistics: UK
Tesco has retail share market 13% in the United Kingdom. The concentration
has been to increase the share in food while growing the space in hypermarkets.
Tesco, at this point of time accomplished the best standard of supply chain
efficiency and the logistic operations are now benchmarked and noticed by the
competitors.
Presently every day the stock is checked on a real time base and based on the
inventory, orders and instructions are operated centrally. Production table plans
are prepared and the same is then transferred from deport to the store after the
acceptance of depot in charge. Jones and Clarke (2002)
Transportation Policy
The sources of Tesco are locally and globally. With the geographical
amplification of Tesco to Central Europe, Asia and lately in the United States, it
has been a challenge and difficult to control the distribution and transportation of
goods at the new places keeping the quality consistent to that of the worldwide
image of Tesco. [Anderson, D. L., Britt. F. E., and Favre. D. J. (1997)]
1. Rail Freight
With the large rail reach in some of the countries rail freight confirms to be an
economical on volume ordering and low value goods. This transportation method
is low on speed and thus need to be used in slow moving goods and in cases
where demand forecasting is rigorous for a longe period of time. But there is a
limitation in this method because of the inflexible service and low speed. But rail
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3. Road Freight
Road freight must put in place as an outcome of the strategic decision to assure
an equation between the speed and response of the inventory management.
Road Transport mode brings a quick and constant service but this can be a
comparatively expensive method of transportation. This can be used in
combination with roll on and roll off ferry services to cover intercontinental trips.
Information Technology
Corporate have now gone to maximum vertical and horizontal combination of
supply chain levels by engaging into strategic with the distributors, providers,
wholesalers, and retailers. This inter organizational improvement of supply chain
has been enabled by strong Information Technology infrastructure, So its
providing three advantages [Mishra R K (2004)]
1. Reduce the Cost.
2. Increase Productivity
3. New product and Market Strategies
In case of TESCO, the typical supply chain can be divided into two sub chains.
The first one can be called as "movement supply chain". This includes
movement of raw material from providers to the company shop, by functional
movement of work in progress goods and the definitive movement of finished
goods from warehouse to the stores.
The second part of the supply chain is the backward and forward information
flow. The following sub chain of information flow is more complex than the
forward movement of the product from assembly line to the final retailing level
because of the combination of the various parties included in the whole supply
chain. Critical issue is of supplying the right info at the right time at every level
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Transportation:
All the components of physical distribution are managed by ALDI and LIDL itself.
They had got their own warehouses in different geographical areas, they have
got their own transportation system through which it collect their inventory and
deliver it to the shops.
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Due to their ownership, ALDI is split into two entities such as north ALDI has
4724 stores and south ALDI has 2344 stores all over the Europe with a common
geographical existence .In the lately stage of its entrance for 20000 inhabitants
ALDI has one store .With the demand of people it is extending its with improving
the contents of physical distribution.
ALDI has a negative impact that it has no channel intermediaries like retailer,
wholesaler ,agent , .The main problem of having channel intermediaries is that
the cost of the product could be very(high) when it comes through the
intermediaries from manufacturer to consumer .The channel management
become uncontrollable by the manufacturer .ALDI itself manufactures the
product in its own brand name store it and sale it directly to the customer .within
this process No other intermediaries can interfere
Conclusion
In conclude the above information it is about the critical appraisal on the
changes in the supply chain operations and processes essentially international
logistics and IT up gradations in order to preserve regular service delivery. Tesco
need to fit as per the legal and culture of the other countries, hence need to
preserve worldwide monitoring and control techniques to trace the cross
continent movement of goods and thus obtaining maximum supply chain
profitability. With the adaptability to global logistics and high grade IT systems,
Tesco can increase the success in the UK on a global stage also.
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