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Analysis of Retail Supply Chain Management

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This assignment provides a comprehensive analysis of retail supply chain management in the UK, focusing on four major retailers: Tesco, Sainsbury's, Aldi, and Lidl. The document examines the use of technology, including Electronic Data Interchange (EDI) and Radio-Frequency Identification (RFID), to manage warehouse access and logistics. It also discusses the importance of warehouse management systems in optimizing supply chain efficiency. The analysis highlights the benefits of adopting EDI solutions and RFID technology in managing warehouse access and sending alerts. Furthermore, it provides information on how Aldi is using traffic light queueing systems to limit the number of customers in stores during social distancing measures.

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An executive appraisal
of information
systems on the impact
of business
performance.

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TABLE OF CONTENTS
1. ALDI Background, Mission and Vision
2. Why ALDI?
3. ALDI's Strategy
4. Information System comparison between ALDI and
competitors
5. Strategy and Information System timeline
6. Information System's impacts on business
performance
7. Current process map and improvements
8. Advantages, drawbacks and recommendations
9. Reference list

ALDI’s Background
1913
First store opened by Anne
Albercht in 1913 in
Schonnebeck,Essen
Germany(Anonymous,2020)
;
1946
Extended by Anne's sons
Karl and Theo Albrecht in
1946 the Aldi's name came
from Albrecht
Discount(Anonymous,2020;
Rudolph et al, 2012);
1960
The company was split in 2
subsidiaries Aldi Nord and
Aldi Sud, separation
between the 2 branches
was made because one of
them (Aldi Sud) was selling
cigarettes and the other
disagreed(Rudolph et al,
2012;Tyler,2018);
1976
Later Aldi developed
overseas and built new
stores, first one opened in
1976 in Iowa,
USA(According to Aldi.US
website);
1990
By 1990, Aldi Sud joined the
UK market(Rice,2019);
Nowadays
Aldi Sud has over 35,000
employees and 890 stores
in the United
Kingdom(Sweney, 2020).
Bogdan-Marian Dragomir 3

Mission and Vision
Business approach defined by core
values such as consistency,
simplicity and responsibility;
Aldi's mission is to continually set
standards and expand its market
position, pursuit by improving
quality and distinguish itself from
the other retailers;
In Aldi's perspective the importance
of their customers impact on their
products and operations is the key
to avoid negative feedback;
Following the three principles, Aldi
has developed a culture from its
constantly growth and the build of
a durable reputation.(ALDI
Corporate Responsibility,2020)
Bogdan-Marian Dragomir 4

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Why ALDI ?
• Their products come from checked British farms which are
in line with company's sustainability requirements;
• The company aims to minimize the usage of resources as
much as possible;
• Aldi policies do not allow their products to be tested on
animals;
• Aldi is committed to respect human rights as part of their
corporate social responsibility;
• The brand slogan is to "Shop Differently" by providing home
delivery, low prices and selling high quality products.(ALDI
Corporate Responsibility, 2020)
Bogdan-Marian Dragomir 5

ALDI’s Critical
Strategies
6
• Go-to-market strategy - Aldi decided to develop a
business model that allowed them to price his goods
below other food products and to develop a private
label which eventually made them challenge top
discount grocers.
• Store location strategy - In order to grasp Aldi's slow and
steady growth and progress, it is important to
deconstruct its tactical approach to customer
preferences and behavior.
• Tricks of the discount trade - Aldi also perfected a range
of discount trading tricks, such as displaying goods
directly on pallets, and has persuaded sellers to repack
their products in packages that optimize pallet space.
• Human resources - Aldi pays salaries more than most
other discounter rivals, despite its emphasis on low
prices products, Aldi maintains minimal store
workers (Chatterjee, S. 2017).
Ali Ismail

ALDI vs.
Competitors
• There is a grocery price war in the UK with
German discounters Aldi and Lidl – Tesco,
Sainsbury's, Asda and Morrison's. Both
discounters have been in the UK for years, but
in the past decade they have gain market
share from their bigger counterparts.
• The simple success key of Aldi is low-cost
operations and an efficient logistics network.
• Life is still relatively optimistic for discounters
in general, but it gets tougher. Opening more
stores too fast requires a similar revenue
sacrifice.
• Aldi must be on the guard to fight the big
grocery, Tesco, and Morrison in
particular (HIPWELL, D., 2017).
Ali Ismail

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Information System comparison between ALDI and competitors
Tan Long Pham 8
Electronic Data
Interchange (EDI)
Increase the efficiency of
communication between Aldi and
its suppliers regarding to
paperwork, invoice. (Aldi, 2020)
Allow Lidl staff view
documents in real-time and
faster, which could save time
and minimize errors.
(Transalis, 2020)
Reduce the cost of data transfer and
being more secure and faster to
communicate with suppliers. (Xie &
Allen, 2013)
Ensure a more secure and faster
way of exchange information
between Sainsbury and their
suppliers and allow systems to
integrate. (Smith, 2019)
Communicate with all suppliers to
have etter preparation for store
availability. ((Xie & Allen, 2013)
Radio Frequency
Identification (RFID)
Aldi uses this method in their
storeroom to minimize the loss of
products during business hour.
(Fructidor, 2011)
The system was installed in
their warehouse to enhance
the management of goods’s
movement. (Swedberge,
2018)
Using RFID pallets to reduce the
stockout situation and cutting the
replenishment time. (Xie & Allen,
2013)
Adoption of RFID allows
Sainsbury to reduce the time of
scanning each items in their daily
warehousing activities. (Brown &
Bakhru, 2007)
Manage warehouse capacity to
balance inventory levels between
stores. (Xie & Allen, 2013)
Enterprise Resource
Planning (ERP)
The system was used to manage
retail processes at all firm’s
locations throughout the chain
from orders and warehouse
management to store deliveries.
(Edman, 2014)
Enhance the harmony of
communication between the
stores across Europe and
central retail information
system. (Lemmon, 2016)
With the help of Walmart, ASDA has
successfully installed their ERP
system, which reduces year-end
closing time, streamlines all payment
process and improves reporting
procedures. (Doyle, 2010)
Stores’ computers were
connected with Sainsbury’s
central computer server, which
allows staff of all level to keep
up-to-date with their daily
operational activities. (Rodrigo,
2012)
Allow staff to manage daily operation
accurately as well as manage the
information flow in the company.
(UK Essays, 2018)
Click and Collect
To prevent the widespread of
coronavirus pandemic, Aldi
launched new campaign to assist
shoppers (Knapman, 2020)
Lidl installed click and collect
lockers with a QR code which
shoppers scan to open the
compartment holding their
orders (Farrell, 2020)
Shoppers are allowed to either pick
up in store or from a locker or even
from ASDA petrol station, however,
orders must be at lease 25 pound
(HouseholdMoney, 2020)
Customers can choose to pick up
their orders from a fridge van
which will be parked in the
store’s car park (Sainsbury,
2015)
Customers simply drive to collect
point and Tesco staff will help to load
products, then customer will receive
electronic delivery note (Symester,
2019)

Information System comparison between ALDI and competitors
Tan Long Pham 9
Customer Relationship
Management (CRM) X
With the launcher of mobile
app, Lidl’s customers have to
register for an account to
receive the loyalty scheme. (Lidl
App, 2020)
With the use of Christmas
Loyalty Card, ASDA easily
capture the information of its
customer regarding their
shopping behaviors. (Gray,
2020)
Sainsbury has cooperated with
Nectar on loyalty scheme in
which shoppers need to log in
Nectar app to see weekly
promotions of Sainsbury.
(Komiya, 2019)
Categorize market segment. and
understand customer purchase
behavior. (Xie & Allen, 2013)
Electronic Point of Sale
(EPOS) X X X
Improve the efficiency in stores
and reduce the time taken for
applying promotional
campaigns. (Perry, 2009)
Increase the flexibility for
checkout process as well as
allow staff to focus on serving
customer. (Tharakaj, 2016)
Decision Support System
(DSS) X X X X
With the help of business
intelligence, Tesco can easily
explore information and quickly
answer to the business
questions (Tesco Report
Analyses, n.d.)
Warehouse Management
System (WMS) X X X X
Allow Tesco to well-control and
standardize their distribution
centers nationally and globally.
((Tesco Report Analyses, n.d.)

Strategy and Information System timeline
THI DIEU TU NGUYEN 10
1913
1948
Mid-1960s
1976
1990
ALDI decided to go overseas
by reducing operating costs
and product prices strategy.
ALDI’s brick-and-mortar
stores were built to operate
efficiently (Reddy, 2017).
Albrecht's sons Karl and Theo
took over the business and
expanded throughout
Germany.
The stores were called
"Albrecht Discount”.
ALDI was divided
into 2 groups: ALDI
Nord and ALDI Sud.
ALDI Sud joined the UK
market.
90% of ALDI’s products were
their own-labelled goods
(Reddy, 2017).
2000
ALDI applied EDI to
efficiently communicate
with their suppliers (Aldi,
2020).
2014
2020
ALDI used ERP system to
manage their retail
processes (Edman, 2014).
ALDI has introduced the
"traffic light" system and new
“Click and Collect” campaign
to assist shoppers (Young,
2020; Knapman, 2020).
First store was
opened by Anne
Albercht in
Germany.
(Tyler, 2018)
ALDI plans to have 1,000
UK stores by 2022
(Hegarty, 2017).
20222004
AlDI opened Scottish
Distribution Centre, stocking
over 200 items that you
cannot be found in the UK
(ALDI Careers, 2020).
2011
ALDI adopted RFID to
improve their stock control
(Fructidor, 2011).

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TAN LONG PHAM 11
Information System Impacts On Business Performance Of ALDI

Current business process
THI DIEU TU NGUYEN 12
Product flow
Information and
knowledge flow
Data transaction
Supplier
Store visit - Customer
selects grocery
StoreWarehouse
Customer pays at
Check-out till
EDIEDI
RFID RFID RFID
Click and Collect
Order and pay online -
Customer picks up from store
(Xie and Allen, 2013)

Recommended business process
THI DIEU TU NGUYEN 13
Product flow
Information and
knowledge flow
Data transaction
Supplier StoreWarehouse
Customer pays at
Check-out till
EDIEDI
RFID RFID RFID
Customer
selects grocery
Click and Collect
Customer picks up
from store
Customer pays at
Self Check-out machine
Store visit

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Drawbacks of
Information System
ERP implementations sometimes take longer than Planned, over budget and with an elevated rate of
failure (Panorama, 2015)
ERP implementations frequently override budgets and lack internal expertise (Panorama, 2016).
55% to 75% of all ERP ventures failed to achieve their targets (Sullivan, 2015)
Implementations of ERP are difficult and have high rates of failure (King & Burgess, 2006), putting a high
demand on organizational resources.
The key challenge was organizational barriers, especially the lack of human capital (Babaei, Gholami
& Altafi, 2015)
User training must be given, and top management must pay attention to emerging technologies for the
effective implementation of ERP. (Almajali, Masa’deh & Tarhini, 2015)
In an exploratory analysis of the implementation of ERP in a telecommunication company, it was found
that a key challenge was organizational barriers, especially the lack of human capital (Babaei, Gholami
& Altafi, 2015)
Shariq Irshad 14

Challenges and problems (Chugh, Sharma and
Cabrera, 2017)
15Shariq Irshad

Recommendations
Tan Long Pham 16
• increase customer’s satisfaction.
• allow staff to concentrate on serving customers (Tharakaj, 2016).
Self-checkout system
• enhance consumerism.
• understand customer’s behaviour and make improvements (Xie & Allen, 2013).
Loyalty scheme
• optimize space and supply chain management.
• inventory transparency and traceable materials (Tredaway, 2020)
Implement Warehouse Management System

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Thank you !

References
ALDI Careers (2020) ALDI Careers: About us. Available at: https://www.aldirecruitment.co.uk/about-us/ [Accessed 01 November 2020].
ALDI Corporate Responsibility UK www.aldi.uk. (2020) https://www.aldi.co.uk/corporate-responsibility [Accessed on October 30, 2020]
ALDI Corporate Responsibility US www.aldi.us. (2020) Aldi Corporate Responsibility Policy https://corporate.aldi.us/fileadmin/fm-
dam/Corporate_Responsibility2/CR_Policy/ALDI_Corporate_Responsibility_Policy.pdf [Accessed on October 29, 2020]
ALDI History US www.aldi.us. (2020) https://corporate.aldi.us/en/aldi-history/ [Accessed on October 29, 2020]
Almajali, D. A., Masadeh, R., & Tarhini, A. (2016). Antecedents of ERP systems implementation success: A study on Jordanian healthcare sector. Journal of Enterprise Information Management,
29(4), 549–565. doi:10.1108/JEIM-03-2015-0024
Anonymous (2020, September 26) Aldi's history and how the German supermarket is taking over the world. Available at: https://www.lovemoney.com/gallerylist/51751/aldis-history-and-how-the-
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Chatterjee, S. (2017) 'Two efficiency-driven networks on a collision course: ALDI’s innovative grocery business model vs Walmart', Strategy & Leadership, 45(5), pp. 18-25. doi: 10.1108/SL-06-2017-
0057
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Hegarty, R. (2017) Aldi opens 700th UK store and targets 1,000 by 2022. The Grocer, 28 February. Available at: https://www.thegrocer.co.uk/aldi/aldi-opens-700th-uk-store-and-
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HIPWELL, D., 2017. Big things in store for discount grocer Lidl. The Estates Gazette, , pp. 24.
King, S.F. and Burgess, T.F., 2006. Beyond critical success factors: A dynamic model of enterprise system innovation. International Journal of information management, 26(1), pp.59-
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stores-trial/
Komiya, N. (2019, October 1). Sainsbury’s launches revamped Nectar loyalty scheme. https://www.moneysavingexpert.com/news/2019/10/news-sainsburys-nectar/
Lemmon, C. (2016). Lidl integrates European retail systems - Retail Systems. https://www.retail-systems.com/rs/Lidl_Software_AG_Data_Partnership.php
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Perry, J. (2009, April 15). Sainsbury’s to lift PoS signage with new system | News | Retail Week. https://www.retail-week.com/tech/sainsburys-to-lift-pos-signage-with-new-
system/5001868.article?authent=1
Reddy, N. (2017) This European Discount Grocer Is Going After The $608B US Supermarket Industry. CB Insights, 9 November. Available
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References
Sainsbury. (2015, March 3). Sainsbury’s launches grocery click and collect service in stores – Sainsbury’s. https://www.about.sainsburys.co.uk/news/latest-news/2015/03-03-2015
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