ALDI CASE STUDY

Seemal Ali
AMM-3A

Q.1) Describe what is meant by the term ‘lean production?

ANS: Lean manufacturing is a management strategy that emphasizes waste reduction while
retaining quality. Lean manufacturing aims to minimize costs by improving efficiency and
market responsiveness. This strategy tries to minimize or reduce non-value-added processes in
the production process, such as stock holding, product maintenance, and unnecessary movement
of people and commodities within the organization. Lean production, on the other hand, for Aldi
includes not only decreasing costs for the company, but also passing those savings on to
customers in order to deliver value for money. Lean manufacturing is based on a number of
efficiency concepts, including:
 Continuous Improvement: A culture in which all employees are active in making quality
improvements on a regular basis.
 Just-In-Time Manufacturing: Materials are delivered as needed, eliminating the need for
large inventories.
 Time Based Management (TBM) is a strategy for minimizing the amount of time spent
on business procedures. This usually demands a multi-skilled and adaptive workforce.
 Top Quality Management (TQM) is a quality assurance ideal in which all employees are
held accountable for doing things correctly the first time.

Q.2) Explain how economies of scale help Aldi to provide customers with greater
value. Use an example to support the point you make?
ANS: Economies of scale may benefit a corporation as its production becomes more efficient.
Companies can achieve economies of scale by expanding output while decreasing costs. Larger
scale operations result in cheaper long-term average expenses. Aldi, for example, has a smaller
product selection. Competitors, on the other hand, may provide a larger selection of brands,
sizes, and packaging alternatives. By offering fewer variants of each product, Aldi can purchase
significantly bigger quantities. As a result, Aldi will need less space to display its goods. As a
result, the size of Aldi's stores may be reduced.
Q3. Analyze how lean thinking enables an organization to focus its activities on its
customers.?
ANS: Lean thinking refers to a set of concepts for improving efficiency and quality while
reducing expenses, conserving time, space, and effort. Aldi is a company that takes a direct
approach to doing business. Other grocery retailers draw shoppers into their stores with elaborate
displays, extra services, and promotions, whereas Aldi's main purpose is to 'provide value and
quality to our customers by being fair and efficient in all we do.' Aldi's whole business concept is
around giving customers good value for their money. An organization can effectively minimize
its working hours by operating during the most productive hours, reducing the need to engage
additional workers for shift changes, by employing the lean thinking strategy. The business can
focus on time-based management. It's a technique for cutting down on time.

Q4. Evaluate how principles of lean production enable an organization to compete

within a marketplace on the basis of value?
ANS: Customers want the best quality products at the lowest possible prices. With such tough
competition it is vital for organizations to understand what their customers want. Production
reduces costs in a variety of ways. These cost savings are passed on to customers in the form of
cheaper prices, allowing the company to distinguish itself from its competitors in terms of both
price and product quality. And, because money isn't wasted on frivolous expenses, the company
can devote its resources to other critical aspects of its operations. An organization can build
strong relationships with its suppliers by implementing TQM. These connections can help a
company enhance its product and the quality of the service it provides to its clients on a
continuous basis.