Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

LIDL STRATEGIC V3

No description
by

John Barlow

on 10 August 2016

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of LIDL STRATEGIC V3

LIDL STRATEGIC
ANALYSIS

Availability
Availability
Buying
Buying
Buying
Logistics
Logistics
Merchandising
(inc. future store)

UK Concept
Merchandising
(inc. future store)

Property
Services
(QA/CR/CS)

Store Operations
Availability
Availability
Key Events
(Christmas)
Key Events (Christmas)
Key Events (Christmas)
Key Events
(Christmas)
Current RDC’s
Atherstone
Bolton
Darlington
Swindon
Chelmsford
Bathgate
Neston
Goldthorpe
Naas
Mitchelstown
Future RDC’s;
Cardiff 2016/17
Isle of Sheppey in 2019
Current RDC’s
Livingston
Bridgend
Enfield
Newton Aycliffe
Runcorn
Lutterworth
Weston-super-Mare
Northfleet
Belvedere
Charleville
Mullingar
Newbridge
Belfast
Future RDC’s;
Wednesbury (West Birmingham) in 2017
Southampton in Sept 2016
Exeter in 2018
Bristol in 2017

This will replace Weston-super-Mare
Future RDC Networks
Lidl UK RDCs
- Based in the Midlands area

- Walsall RDC is used as a
Non-Food Specials re-work
and storage site.

- 100% agency staff
Walsall
Single temperature NFS rework / Storage
Lidl UK RDCs
No Gatehouse, Hauliers have to manage themselves in the yard
Aisle
picking
Gravity Fed Racking
Freezer Pods
Lidl UK RDCs
Multi-temp RDC servicing Scotland including; Berwick-Upon-Tweed, Dumfries & Galloway, Highlands, Orkney Islands, Scottish Borders
Servicing approximately 90 stores across Scotland as well as home to the new Scottish Buying department
Lidl UK RDCs
Lidl Livingston RDC
Tailend Farm, Deans Industrial Estate,
Livingston EH54 8SE
Lidl UK RDCs
Lidl Wednesbury RDC

Currently under construction

Possible location for e-commerce FC
Lidl UK RDCs
Goods out section has approximately
40 bays.

Goods in section has approximately
35 bays.
Lidl Charleville
Secured white pallet store.
Lidl Ireland RDCs
4sr, 10 Dundrod Rd, Crumlin BT29 4SR
Neither ambient or chilled goods in/dispatch running near capacity.

Outdoor secure pallet store.
Lidl Belfast
Recruitment within Regional Distribution Centres for Aldi and Lidl.

Lidl currently do not offer an apprenticeship programme within their Regional Distribution Centres.
However Lidl do offer a graduate entry position for Assistant Section Manager.
Has a section for recycling bales of cardboard and plastic.
As well as a separate store for waste disposal.
In 2012 SSI Schaefer installed an automated picking warehouse system for Lidl in Kirchheim/ Teck, Germany.

As well as installing Schaefer Case Picking (SCP) System, the warehouse includes a high bay racking system with five aisles and around 15,000 pallet storage spaces plus a Schaefer Tray System (STS) with 16,000 storage position on five storage levels.

The system guarantees optimally packed pallets for transporting and unloading goods at the store.

See below link for a video of the exact system Lidl have trialled.

Lidl uses the Schaefer Case Picking System for order picking
Lidl have 3 European hubs run by 3rd parties to consolidate and distribute products

Valencia (specialist site for produce)
Rotterdam (Port centric – Rotterdam is Europe's largest container port)
Austria

Their RDC network is fully integrated across Europe to allow freight diversion (trunking) opportunities.
Use of Consolidation Centres
Lidl have announced plans to invest around €70 million to develop a new Regional Distribution Centre in Spain.
Currently under construction in Alcalá de Henares – Spain this will become the biggest distribution centre in Europe. The 71,800m2 facility will employ 275 workers and supply more than 150 stores in central Spain.

The distribution centre will have a storage area for 10,000 pallets, as well as 12,000 square metres set aside for cold-room storage.

“This will be the biggest distribution platform in the whole of Europe, the most technologically advanced and the most sustainable,” said Javier Suárez, Lidl’s director of expansion and real estate.

Lidl RDCs - European
Lidl’s non-food specials are partly imported from Asia using standard containers which are shipped to the pan European distribution hubs for consolidation. Using a centralised delivery control system the goods are then loaded onto inland navigation vessels, goods trains or lorries.
All listed lines are focused primarily on German and UK production whilst the transportation of the goods are also controlled by the pan European hubs.
Lidl currently communicate directly to suppliers when placing orders, however they have recently been dealing with Armstrong Logistics directly.
Transportation and Consolidation
Use of Platforms
Lidl mainly work directly with suppliers for inbound logistics.
Armstrong's, CML and Oakland's all deliver stock to Lidl contracted by suppliers.

All European Suppliers are controlled centrally through Germany. (similar to IB and Aldi UK Buying from IB).

Buying terms are DDP/ DAT into the 3 hubs, then transferred to regional distribution centres across Europe.
Lidl currently contract third party hauliers to trunk goods between the pan European distribution centres (Valencia, Rotterdam and Austria) to local RDCs and between RDC to RDC

This enables Lidl to import smaller amounts whilst maximising their vehicle capacity ensuring minimum amount of haulage on the roads. This also guarantees the best possible freshness of products whilst reaming efficient and environmentally friendly

The example given is of produce sent from Valencia via short sea through the port of Bilbao in North West Spain for distribution across the U.K

Trunking
Produce to Ireland

Lidl buy on a Day 1 for day 3 basis.

Lidl currently use McBurney Transport Group based in Liverpool to complete their Produce to Ireland shipments using the Liverpool to Dublin crossing. As McBurney’s are located so close to the Liverpool port this is the cheapest and most efficient option for them. Suppliers deliver into McBurney for transportation to Lidl using the suppliers transport at the suppliers cost.

They currently receive orders from Lidl by 16:30pm on day 1 and deliver into Ireland from 06:00 on day 3. This leg is charged to the supplier at an average £50 per pallet. All produce is ordered in full pallets.

Produce
Aldi currently deliver Long Life Chill products to Naas and Mitchelstown regions at a cost of £45 per pallet from CML to Naas, £55 per pallet from Oakland's to Naas, £50 per pallet from CML to Mitchelstown and £55 from Oakland's to Mitchelstown.

McBurney’s are currently shipping 10 – 20 loads per day for Lidl. Currently running a cross stock operation only storing Ambient, Produce and Frozen goods.
ay 3 into Irish regions
Aldi currently buy all produce sold within the Irish business through a dedicated Irish Buying Team based in Naas.

The UK Produce buying team are currently exploring the opportunity to improve the quality of produce in Ireland through adopting the buying of Irish sold produce within the UK buying infrastructure. This includes a project with CLD to identify the best supply chain solution.
Lidl do not use crates for produce in Ireland. All fresh produce is expected to be delivered in card.  This enables the theatre in store of a market scene.
Lidl use a white pallet pool (re-usable euro pallets) which is managed on an exchange system.
Produce
Aldi currently deliver Long Life Chill products to Naas and Mitchelstown regions at a cost of £45 per pallet from CML to Naas, £55 per pallet from Oakland's to Naas, £50 per pallet from CML to Mitchelstown and £55 from Oakland's to Mitchelstown.

Crates and pallets
A supplier buys into the pool, buying 33 of their own pallets to a standard as prescribed by Lidl.
A supplier will deliver 33 pallets in and the region will give them 33 pallets back out of the wider pool.
The supplier will not be charged for this issue of equipment as they essentially own the product.
Lidl also reuse the cardboard corner posts for stabilising the pallets, giving the posts back to the suppliers who deliver in using them. This cuts the extra cost for the supplier by re-using the corner posts.

The UK Produce buying team are currently exploring the opportunity to improve the quality of produce in Ireland through adopting the buying of Irish sold produce within the UK buying infrastructure. This includes a project with CLD to identify the best supply chain solution.
McBurney’s are currently shipping 10 – 20 loads per day for Lidl. Currently running a cross stock operation only storing Ambient, Produce and Frozen goods.
ay 3 into Irish regions
Aldi currently buy all produce sold within the Irish business through a dedicated Irish Buying Team based in Naas.
Returnables
No evidence of Lidl owning returnable equipment in the UK & Ireland, however Lidl are currently renting Teacrate’s from PHS Group for their Fresh Meat and Poultry products, these are equivalent to Aldi’s black crates.
This rental contract includes the washing and issuing of all crates.

Returnables (Lidl)
Lidl currently use 8 different types of equipment in store;

Euro Pallets (LPR & CHEP)
D Pallets (LPR & CHEP)
White Pallets (Lidl Pool)
2 litre beverage trays
Plastic UDP
Plant Trollies
Nestable Euro Pallets (Cabka and Pooling Partners)
PHS issue the crates to suppliers, who then deliver goods into Lidl where the empty trays are stacked to be collected by PHS for washing.

Currently Lidl’s charge to supplier for the rental of crates is £0.40 per crate in comparison to Aldi’s £0.25 per crate.
Lidl currently merchandise all produce in cardboard crates to create a market stall feel.
Returnables
Aldi rent UDP’s from Polymer Logistics, generating over £170,000 per annum in revenue to Aldi.

In 2015 the produce team requested an investigation into the use of plastic equipment for imports from key European countries. The utilisation of a major European pooler was identified as the most efficient solution. The two European poolers identified issue equipment in 27 to36 countries on behalf of major European retailers. This scale makes the model credible. The two business identified were IFCO and EPS, these are summarised in the table below

Returnables (Aldi)
Aldi own 10 different types of returnable equipment;

Produce trays
Meat trays
Potato shippers
UDPs
1 litre beverage trays
2 litre beverage trays
Euro Pallets
D Pallets
UK Pallets
Plant Trollies

Non-Food Specials
Lidl have a centrally controlled reverse logistics team, co-ordinating recalls and reworks of old stock to a central warehouse.

Lidl operate a 35 day backhauling policy for specials, whereby a picklist is sent to stores for products to be returned

Products that have been returned to rework warehouse are stored until the products next OSD up to a maximum of 2.

Clearance car park sales have also been used in the past to clear out old returned special buys, however this need is reduced with old product sent to specialist clearance stores.
Repair
Rework
Resell
Logistics and Fleet Information
Vehicle Fleet
UK Store deliveries are nationally controlled by head-office in Wimbledon using SAP TMS (Transport Management System)

RDC receives all delivery instructions from head-office
All store deliveries are centrally controlled and contracted to Third Parties Haulage providers

CSL Logistics - Lidl Case study
One of a number of 3PLs Lidl use for store deliveries and waste collection

Lidl UK do not own any transport fleet themselves

Lidl liveried vehicles are owned by 3rd Parties

All DC to store routing and scheduling is controlled centrally using SAP TMS through their Wimbledon HQ

Backhauling goods from suppliers is also controlled centrally.
Personnel
(inc. organisational
structures)

Personnel
(inc. organisational
structures)

Logistics and Supply Chain
Logistics and Supply Chain
Store Distribution (UK)
648 UK stores
126 Ireland stores
655 UK stores
182 Ireland stores
Store Distribution (UK)
Store Distribution (UK)
Logistics and Supply Chain
24 stores within the M25
76 stores within the M25
Greater London
1 produce site covering London and South East UK
1 dedicated rework and storage site for all returned and faulty Non-Food Special Buys

8 UK multi temperature Regional
Distribution Centres
Regional Distribution Centres - Current
8 UK multi temperature Regional Distribution Centres
Regional Multi-temp
DC
Regional Produce
Site
National Rework
Site
Future RDC Networks
3 new multi temperature sites opening;
Wednesbury (West Birmingham) in 2017
Southampton in Sept 2016
Exeter in 2018
IRE: Charleville, Mullingar, Newbridge, Belfast
2 planned multi temperature sites:
Cardiff 2016/17
Isle of Sheppey in 2019
Single temperature national distribution: Under review
IRE: Naas & Mitchelstown
Lidl UK RDCs
Lidl Lutterworth RDC
Wellington Parkway, Magna Park, Lutterworth LE17 4XW
Multi-temp RDC
servicing the Midlands
Lidl Lutterworth RDC
Wellington Parkway, Magna Park, Lutterworth LE17 4XW
Electronic POD System
Lidl Livingston RDC
Tailend Farm, Deans Industrial Estate, Livingston EH54 8SE
Ballyhea, Co. Cork, Ireland
Lidl Ireland RDCs
Lidl UK RDCs Recruitment
In November 2015, Lidl opened a new concept store described as the ‘Lidl of the future’. The store in Rushden, Northamptonshire U.K opened at a fit-out cost of £2 million. At 1,400m, the store is one of the largest in the UK estate, significantly larger than the average Lidl size of 1,000m
Glass frontage allows more light as well bringing energy costs down, which is matched with low level, LED interior lighting

Trolley bays have been moved to the car-park to further open up the entrance area and create feeling of space

Totems advertise fresh bakery in addition to services such as toilets and free parking

Part of a £1.5 billion investment in the U.K over next 3 years ramping up new openings to 50 per annum, all of which are to follow this format
UK Concept
A warm welcome to Lidl at the store entrance

Positive approach to customers enhanced with bicycle shelters, additional navigational signage and Lidl branding on glass
New format is step change with in store bakery a focal point, dedicated 80m preparation room providing 35 SKU’s of fresh product to entice customers entering store and providing real differentiation from competition
A large fresh bakery is encountered immediately on entering the store

Immediate sensory impact both visually and via fresh smell

Much of the bakery items are sold loose to emphasise freshness
UK Concept
Other features include the adoption of a new dark grey colour scheme and POS which helps to portray a more quality-orientated, sophisticated and cleaner image.
UK Concept
The larger size of the store, has allowed it to introduce wider aisles at 2.7m, a larger produce section (40% larger than previous) brought to the front of the store and an expanded BWS offer, all enhanced with open ceilings and the removal of hanging boards.
UK Concept
Produce is displayed on ‘fresh’ branded wood-style crates.
The expanded produce has been moved to the front of the store, next to the bakery
Premium BWS fixture incorporating points based wine guide and a craft ale section

Selected range in crates adding premium feel

Individual bottle divider system ensuring sharp displays with accurate POS location

Self check-out zones and a modification of existing tills allowing customers to pack whilst cashier continues to serve, further evidence of mind-set change to meet customer needs
There are six self-service checkouts, supervised by one member of staff

The addition of self service demonstrates Lidl's desire to embrace customer trends within national markets

UK Concept
Chilled island , similar to what is found in more mainstream UK supermarkets such as Tesco, Sainsbury’s and Waitrose

Move away from chest chillers with vertical chill space finished with premium colours
Expanded space for key growth categories with the focus on fresh; Meat, Fish, Bakery & Produce

These categories are stronger focal points as a result; the bakery creates a feature front of store whilst fish is now located in a stand alone chiller to give focus

Crucially it is the space not the range which has changed to create the new concept

UK Concept
Low level LED and wider aisles improves the shopping experience, while replacing the typical yellow and blue colour scheme with dark wood and black signage gives a more upmarket impression
Lower Specials tables and removal of price board for specials adds to the feeling of space

Wood effect surrounds on NFS tables removing wire ‘cage’ look

High level category headers directing customer journey through store

UK Concept
For legal reasons alcohol cannot be merchandised outside of segregated area – thus none on flexible 4 tier special shelving
International Concepts - Ireland
Ireland – Local brand names offered in addition to category headers – reinforcing provenance message
Increased ‘Just Free’ & whole foods offering.
Non Food given category headers to help facilitate customer mission
Bakery and food to go sections have adopted the lighter wood finish trialled in Switzerland

Additional POS space dedicated throughout store highlighting Irish provenance of key core range commodity groups
International Concepts - Ireland
Latest new format store in Gorey has the addition of ‘Lidl to Go’ range seen elsewhere in Europe, with hot prepared food backfilled adjacent to in store bakery
Additions to bakery include; loaf slicing machine and wall mounted menu detailing all product ingredients, giving additional premium feel

Additional ambient meat section catering for local market in Spain and Spanish islands such as Lidl Majorca
International Concepts - Spain
Current trial of enhanced Health and Beauty fixture focussing on Lidl ‘Cien’ brand
International Concepts - Spain
‘Lidl to go’ range offering hot prepared food. Back filled display adjacent to in store bakery

‘Pick n Mix’ style frozen shell fish self served by customers from chest freezers
International Concepts - Spain
Exterior signage has adopted a ‘softer’ approach whilst consistently inviting customers to comment or contact Lidl via a variety of social media platforms
International Concepts - Spain
International Concepts - France
Bread fixture has addition of plastic covers, with product only accessible via designated scoops rather than by hand to minimise customer handling of product and improve perception of quality
Existing store refurbishment taking place in line with new store format.

Part of a project to invest €450 million over 5 years refurbishing 900 of Lidl’s 1,500 French stores
Trial of lighter wood effect on bakery with a slightly changed bread menu, fixed to pillar behind perspex cover
POS surrounding office door dedicated to celebrity chef endorsement
Additional gondola end wine fixtures in keeping with lighter wood grain as per rest of store
Trial of electronic HD screens in place of paper POS and poster frames

Dual customer tills, allowing customer to pack whilst another is served
International Concepts - Switzerland
Free electric car and bicycle
charging points in car-park

Dedicated merchandising space to Lidl ‘Bio’ range of organic products
Entrance areas in Switzerland have added recycling points in welcome wall for customers, In addition to local picture and welcome message
International Concepts - Switzerland
Full transcript