Supply Chain and Logistics in the Supermarket Sector

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MAN203 - ASSESSMENT 2 -
INDIVIDUAL REPORT

Table of Contents
Executive Summary.....................................................................................................................................3
Introduction.................................................................................................................................................3
Discussion...................................................................................................................................................4
Conclusion...................................................................................................................................................8
Recommendations...................................................................................................................................9

Executive Summary
This particular report will discuss supply chain and logistics characteristics of Aldi Supermarket
which is the selected company for this purpose. This report will contain all the relevant content
for the assessment of the characteristics of Supply chain and its logistics operations. Aldi
supermarket which is a supermarket chain in the UK and other parts of the world is derived from
its Albrecht and discount, named ALDI. ALDI supermarket has been one of the supermarket
chains which had adopted the policy where the prices of the products are low, every day. This
report will discuss the characteristics of Supply chain and logistics operations, and to achieve
this purpose, A significant supply chain diagram will be provided in the report to explain all the
important aspect of its supply chain and how ALDI is affecting such characteristics for the
benefit of it. Supply chains of raw materials and the end products are important to not to be
affected so that the productivity could not be hampered.

Introduction
The particular report will discuss the effectiveness and characteristics of the supply chain and
logistics operations which will affect the productivity of the system. The organization chosen for
this purpose is the ALDI supermarket. ALDI supermarket is a supermarket chain owned by two
German family discount supermarkets, having around 10000 outlets within 20 countries all over
the world. ALDI based in Germany, this supermarket chain named over Albrecht and discount,
was founded in 1946 when it is reconstructed by the store owned by their mother in Essen. The
whole ALDI supermarket chain was split up into two, named ALDI Nord and ALDI sud. In
Germany, the ALDI sud and ALDI Nord has been separated since 1966, to stabilize them
financially. If we discuss the market, they have established their stores, then ALDI supermarket
is established among 20 countries such as Slovenia, China, Italy, Hungary, Switzerland, and
other countries (Shaw, 2019).
Aldi supermarket is established in the supermarket sector, where all the required products of
consumers can be provided at one place, ALDI is dedicated to providing products with least
price from the competitor, and everyday low price is their policy, to increase their sales to the
highest.

Discussion
To describe the scope of ALDI supermarket, it is important to analyses their market using a
SWOT analysis.
Strengths
Pricing: it is their strength to provide
products at such a low price which had
helped them to stay in the market.
High level of customer support: ALDI has
good support from the customers, as they
prefer most of their dairy products from
ALDI, due to low price policy.
Great saving: such low price allows
customers to save money, where that money
can be used to purchase other products.
Good product mix: ALDI has a variety of
products with almost 25 percent of the total
space available. In addition to it, there are
also some brands and premium brands
available.
Opportunities
Preference for customers: due to the low-
price policy of Aldi supermarket, there is a
high opportunity for ALDI supermarket to
improve their quality of services, so that
customers can get attracted more, which they
already are due to their low-price policy.
Weaknesses
Low margins: due to their low price of
products, the margin of profit for ALDI
supermarket is quite low.
Poor employee satisfaction; ALDI are more
focused over their customers; hence they are
unable to fulfill the needs of the employees.
Threats
The only threat is high competition in the
supermarket sector.

The scope for ALDI supermarket is to attract more and more customers, using their low-price
policy, as customers, would love to take most of the stuff in less of the money. The product mix
of ALDI supermarket is quite high; hence it would be beneficial for them to add more variety of
products, under the same low-price policy.
The supply chain of ALDI supermarket
Order plan
Order
Order plan
Suppliers Distribution
center
Inventory
forecast or
Stores
Direct buy
Online
book and
direct buy
Online
book and
delivery
Projected
orders
DC
shipment
Demand Forecast

The supply chain of ALDI supermarket given above is the basic supply chain usually introduced
for most of the supermarket. Here if we analyze this supply chain, given above; there are three
ways by which customers can buy their products from the stores. These stores are also called an
inventory forecast. Once the demand forecast is made, consumers can buy products by two main
ways; which are buying directly from the stores, and ordering and them picking up from the
stores.
If the products have to be ordered and consumers, need home delivery of the product, in this
case, the product is not dispatched from stores, rather it will be dispatched directly from
distributary centers. If stores get some pre-ordered big consignments, in such case stores has to
request the distributor center to get ready for that big consignment. The distributor center is the
body where all the products are distributed among different stores all over the world. This body
is also responsible for monitoring the status of the products of various stores to which it
distributes (Koberg, 2018).
The characteristics of Distributor center is to analyze the needs of the stores, and the status of
products, for example, which product is in demand, hence according to the demand distributor
centers have to demand from the suppliers.

Whereas, it is the characteristics of the suppliers to fulfill the order plan provided by ALDI’s
distributor center. It is the characteristics of stores, to manage products and supply to the
customers. Stores are the extended outlets where consumers get their products.
What are three (3) activities that the organization is using to ensure its supply chain is
sustainable and in what ways is the organization influencing all elements of its supply chain
to adopt sustainable practices?
Project-based approach: An organization needs to work over the project-based approach. Such
approaches encourage implementation of projects more than one, simultaneously. It has been
established the fact that if any project has ROI above the established threshold, hence after the
effective implementation it would add value to the system (Cameron, 2015).
Focus on Vertical Excellence: A supply chain contains the composition of several objectives or
tasks including source, make and deliver. Each organization has a strong vertical silo which
strengthens these three aspects. It has been established the fact that the best balance sheet of
companies developed only when the performance of the functions of the tasks given above
reflect upon each other, or interlinked. Hence the strongest function is aligned when the total cost
is established together for the satisfaction of customer service.
A lack of Corporate Understanding: it is understood that the supply chain is a forward-looking
based operation, hence it is important to create some beneficial bases for the supply chain from
which benefits and effective changes in the supply chain can be established. Because the supply
chain cannot be modified according to the historic transactions. The supply chain is affected by
the demand been made by the consumers, because the demand at the stores, is reflected to the
distributor centers, which in return pass it to the manufacturer and supplier of that product.

Conclusion
This report has discussed all the characteristics and some of the key points in the aspect of the
supply chain which is used in the context of ALDI supermarket. This report has concluded that
in the supermarket sector, it is important to include some of the key changes in the supply chain
of the products. This report had also concluded that supply chain management is important in the
context of the demand been made from the consumers. All the important bodies such as
Suppliers, Distributors, and stores are an important and integral part of the Supply chain and
logistics operations.

Recommendations
There are some recommendations which can be given to improve the supply chain of
supermarket sector:
It can be done that the inventory level can be continuously checked to monitor which products
are in demand, hence automatic purchase system using ERP systems can be used programme to
provide sufficient orders to the suppliers (Wilshaw, 2018).
Standardization of the process of the supply chain should be done to save time and money in the
supply chain processes, here employees can increase their serviceability to improve the
workmanship.
Gain data insight: It is important to make some arrangements where real-time data collections
can be made to provide supply chain health of the manufacturers. ERP software here also can be
beneficial.

References
Cameron, A.J., Sayers, S.J., Sacks, G. and Thornton, L.E., 2015. Do the foods advertised in
Australian supermarket catalogues reflect national dietary guidelines?. Health promotion
international, 32(1), pp.113-121.
Sparks, E., Farrand, C., Santos, J., McKenzie, B., Trieu, K., Reimers, J., Davidson, C., Johnson,
C. and Webster, J., 2018. Sodium Levels of Processed Meat in Australia: Supermarket Survey
Data from 2010 to 2017. Nutrients, 10(11), p.1686.
Franck, A. and Nemes, I., 2018. Dutch Supermarket Supply Chains: Ending the human suffering
behind our food.
Wilshaw, R., 2018. UK Supermarket Supply Chains: Ending the human suffering behind our
food.
Willoughby, R. and Gore, T., 2018. Ripe for Change: Ending human suffering in supermarket
supply chains.
Koberg, E. and Longoni, A., 2018. A systematic review of sustainable supply chain management
in global supply chains. Journal of cleaner production.
Shaw, H.J. and Shaw, J.J., 2019. Corporate Social Responsibility, Social Justice and the Global
Food Supply Chain: Towards an Ethical Food Policy for Sustainable Supermarkets. Routledge.