The Times 100

Business Case Studies

Edition 16

Competitive advantage through

efficiency
Aldi

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

Aldi core values

Simplicity
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

Lean production
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

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 Aldis 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

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

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