The food retail industry is a highly competitive market. More so
than ever, organisations need to offer customers value for money.
Customers want the best quality products at the lowest possible
prices. With such tough competition it is vital for organisations to
understand what their customers want. Aldi understands that its
customers want value for money but do not want to compromise
on quality. This case study will demonstrate how Aldi uses a lean
approach to its business operations to offer its customers quality
products at competitive prices.
Since opening its first store in 1913, Aldi has established itself as a
reputable retailer operating in international ...view middle of the document...
They can then be used to further
meet its business objectives for growth. Efficiency is not
something that is achieved overnight. Lean thinking is a
continuous process that constantly enables Aldi to improve the
way in which it meets its business objectives. This enables Aldi to
develop an ambitious investment programme to develop new
properties and suppliers as well as to provide benefits for
• Lean production
• Reducing costs and
• Benefits of lean production
Lean thinking: Using a series of ideas
to improve efficiency and quality while
reducing costs, time, space and effort.
Core purpose: Broad statement of
intent like a mission.
Business objectives: Outcomes that a
business seeks to achieve.
www.thetimes100.co.uk Aldi | Competitive advantage through efficiency 09
Competitive advantage through efficiency
back into the business
Lean production is quite simply about getting more from less.
The aim of lean production is to reduce the quantity of resources
used in providing goods and services for consumers. At the same
time, it is about making the organisation more efficient. Lean
production involves eliminating waste and therefore using less
labour, materials, space and time. This in turn reduces costs.
However, for Aldi, lean production is not just about reducing costs
for the business, it is also about passing these savings on to its
customers to offer value for money.
Lean production is based on a number of efficiency concepts,
• Continuous improvement – a culture whereby all employees are
constantly involved in making improvements to quality
• Just-in-time production – materials are received just as they
are needed, eliminating the need to maintain large stock levels
• Time based management – an approach that aims to reduce
the time wasted in business operations. This usually requires a
multi-skilled and flexible workforce.
• Total quality management (TQM) – a quality assurance ideal where
all workers have a responsibility for getting it ‘right first time’
Although lean production is often considered in terms of
manufacturing, these principles can equally be applied to service
organisations. The principles of lean production are planned and
built into everything that Aldi does. This starts within its supply
chain. For example, up to 60% of Aldi’s fruit and vegetables are
sourced locally where possible, reducing the need for long and
costly delivery journeys. This demonstrates a time based
management approach. The principles of time based management
are also built into the training provided for Aldi’s employees. Training
enables Aldi to eliminate waste and cut costs. Through training staff
to do a variety of tasks around store Aldi can minimise its staff