Aldi: Albrecht Discount

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On Tuesday, October 23rd I had the opportunity to attend the presentation from Aldi’s organized by the Supply Chain and Operations Club. Albrecht’s family had started an Albrecht Discount store in 1925. Aldi’s name was formed from the first two letters of Albrecht Discount. In 1960, the family business was divided between the two brothers into two: Aldi market and Aldi South. However, Aldi had opened its first store in Iowa City in 1976 and since then it has been expanding. Today, there are over 1,200 ALDI stores in 31 states, from Kansas to the east coast. These stores carry about 1,400 regularly stocked items, from fresh produce to the best cuts of meat to everyday essentials like bread and peanut 
butter. Aldi is the 9th largest grocery store in United States. Moreover, company’s objective is focused on lean process, which sets apart Aldi from its competitors.

Throughout the presentation, I was analyzing and comparing the concepts I have learned about lean process in SCO 3001. First, what is lean? Lean is concerned with eliminating waste (non-valve-adding) activities in every part of the business and improving the flow (Schroder 15). Aldi has been benefiting from lean process by reducing waste and eliminating non-value-adding activities, such as having smaller store size, lower capital expense, 4-5 aisles per store, lower maintenance cost, lower utility cost, cost effective shelving, one size product, limited operating hours, highest checkout efficiency in the industry, eliminating cart runners and limited inventory on hand.

Additionally, Aldi’s has built a strong relationship with its suppliers. For instance, most Aldi products are delivered directly to the division warehouse, allowing more control and flexibility of distribution to stores with delivery of merchandize within 24-48 hours. Limited inventory on hand helps decrease product carrying cost and other warehouse expenses. Aldi also attempts to incorporate lean thinking into its each and...
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