Aldi Neston

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and wide range of selections, which cannot be done if the strategy of handling the distribution process is not reframed.

Aldi needs to understand that discounted prices are nomore an unreachable option for those who prefer online shopping, as there are social media websites that provide various discounted codes to avail the option of low payments. With this entire discussion, the motive was to set the ground for re-looking at:

the distribution centres of Aldi,

the challenges they face now,

the challenges they would face in the future due to lack of present planning, and,

what recommendations could help Aldi secure the competitive position.

4. Challenges to Aldi’s Distribution Centres

In continuation with the above content, below list of challenges that Aldi would face if it is still using the same operational strategy as it did in the past.

4.1 Under-planning the handling process

As the first function expected to be done from a distribution centre is the storage of material, picking and handling of the required merchandise, it calls for a new strategy of relooking at the entire setup of the distribution centres. Careful coordination and concurrent planning has its benefits in the

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process of distribution. The key is to re-engineer the entire process from the start.

The handling process cannot be the same anymore, and the new one needs to integrate the systems-architect, and contractor. As Phillip Poston (n.d.) states, there are various shapes and sizes of projects seen in a manufacturing and distribution chain, but the ones that succeed have been the ones that had involved a material handling systems-integrator from the initial phase.

4.2 Lack of slotting analysis

Proper slotting is necessary to improve the utilization of the available space, and reduce the requirements related to replenishments. This entirely means using the available space at the distribution centre to its full capacity. Usually, any business mistakens the slotting strategy, and does not achieve the slotting effectively. This slows down the process of distributing the ordered items, finally giving benefit to the other online retailers.

4.3 Ignoring the re-slotting process

As mentioned above, adopting the slotting analysis is a good strategy in the initial designing phase of distribution centre, but it is equally essential to ensure that the slotting is not fixed endlessly. It is a strategic need to re-slot the entire distribution centre as per the changing needs and demands of the customers. As the e-commerce is dynamic in nature, Aldi would need to keep a constant eye on the market needs and changing demands. Time to time, different items become fast moving ones, and on the basis of that, Aldi would have the challenge of re-doing the entire stock and space.

4.4 Lack of storage-media planning

There are times when Aldi might have tried to avoid storage options for every item category. This might have been a great strategy sometimes, but this need is also dynamic. At times, using different media for storage in a distribution centre helps maximise the efficiency and performance. Planning of the columns is essential in a distribution layout. The questions that Aldi would require to ask itself are ‘what items come in the storage of pallets and go in pallets again?’, ‘what items come in the storage of pallets and go in the form of cases?’, and ‘what items come in the storage of pallets and get picked without finding a long-term space in the centre due to fast speed of order?’. After asking these questions, Aldi would be able to develop a plan that utilizes its entire available space in the most effective manner.

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