1. What is Discount What can we learn from ALDI and BIM?
Discount: change the standards of the industry. Avoid something which is considered normal or standard.
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2. Why is simple so difficult?
Simple is so profane that we often do not believe it. We do not trust that this is good. Simplicity needs courage.
hours
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3. Jetzt auf türkisch
Easy to copy a store. The essentials are behind the curtain: the methods of management, the corporate culture.
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4. 1995 22
3.627
20.000
BIM is maybe better than the original ALDI
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5. Complexity
Institute for Simplicity, Dieter Brandes & Nils Brandes 5

6. 1. work
2. efficient
Simplicity makes sure it works.
The second step is to make it efficient.
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7. complex simple Institute for Simplicity, Dieter Brandes & Nils Brandes
Complex: many elementes, different elements, many connections, dependencies
Simple: as few elements as possible, few different elements, few connections, few dependencies.
Institute for Simplicity, Dieter Brandes & Nils Brandes 7

8. Complexity is the reason for being late
Complexity is the reason for being late. Less options, less customization would have made the A380 available on time.

9. The Complexity Curve Complexity (cost) Elements Number of components
Number of options
´ Number of items
Number of employees
Number of suppliers
Number of customers
Number of rules
Number of...
The curve should be considered with every decision...
Elements
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10. -1-
Avoid Complexity
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11. 1. limited Assortment 2. daily consumption 3. easy to handle 4
1. limited Assortment 2. daily consumption 3. easy to handle 4. best Quality 5. lowest price
Clear targets are the basic for avoiding complexity.
If the target is unclear, you can not avoid things to become complex.
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12. 600 © Institute for Simplicity, Dieter Brandes & Nils Brandes
600 –not a single item more.
Taking care of each and every item: price, competition, packaging, quality etc.
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13. “Wenn uns bei der Kalkulation etwas beschäftigt, dann nur, wie billig wir eine Ware verkaufen können und nicht, welchen höchsten Verkaufspreis wir erzielen können“ – Karl Albrecht, 1953
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14. Different Types 6 24 Customer looked 40 % 60 %
Customer bought 30 % %
(15) (2)
Draegers Supermarket, Menlo Park, Kalifornien: Feinkost, 75 Sorten Olivenöl, 250 Sorten Senf, 300 Sorten Marmelade.
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15. ALDI versus Wal Mart Items 120.000 1.800 Sales ww Bil. USD 450 80
Sales/Item
Mil. USD 3,
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16. -2-
Reduce Complexity
Lateinisch: reducereSwatch: 51 statt 91 Teile einer Uhr
Speisekarte: was kann ich noch weglassen, um die wichtigsten Speisen hervorzuheben, um deren Qualität noch besser zu machen?
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17. HAYIR! © Institute for Simplicity, Dieter Brandes & Nils Brandes
Was ist nice to have / was ist notwendig?
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18. HAYIR! Market Research Marketing Public Relations, Interviews
Fancy offices, expensive company cars
Staff Departments
Budgets
Data Warehouse
Controlling
Consultants
HAYIR!
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19. -3-
Manage Complexity
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20. Autonomy and Responsibility
Remember: what means simple? Little dependency. You can achieve this by giving high autonomy to your staff. This requires responsibility.
Job Descriptions
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21. Delegation and Decentralization
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22. CEO
CPO
Category Managers
CFO
Accounting IT
COO
Internal Auditor
... as much decentralized as possible – central only when necessary and reasonable
General Manager
Sales Manager
District
Manager
Store Manager
Administration Manager
Accounting
Personal IT
Regional
Purchaser
Property
Logistics
Receiving Department
Inner Transportation and Picking
Dispatching / Truck Fleet
Centrally: Purchasing and Cash Mgmt.
Small mistakes and big mistakes.
There is no superman.
Beispiel: Büromaterial für die Filiale zentral oder dezentral? Der FL macht das statt eine zentrale Abteilung mit Abteilungsleiter und Spesenregelung.
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23. © Institute for Simplicity, Dieter Brandes & Nils Brandes
The black swan.
Decentralization helps to cope with black swans.
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24. Trust and Control
Trust reduces complexity
Control important to proof the trust.
3 Points
Discussion about the job, Manager is interested,
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25. Trial & Error
Test in three stores
Get out of your offices, do not study too long. Try it.
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26. Optimize Maximize and Minimize
Maximize sales and minimize cost
The optimum does not exist. It is a theoretical number of a certain moment only.
Do not optimze. Say what you want.
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27. Real / actual numbers instead of plans and budgets Less (data) ist more Just enough is more
Use real numbers and compare:
Last month – this month,
last year, this year
Best store – poor store
Shrinkage last year – shrinkage this year
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28. Continuous improvements
No big plan – make it just a little better each day.
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29. 現 地 現 物 © Institute for Simplicity, Dieter Brandes & Nils Brandes
Stand in your warehouse and observe for 1 or 2 hours.
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30. 現 地 現 物
Genchi genbutsu
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31. “Continuous improvements are better than delayed perfection“ — Mark Twain
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32. Small is beautiful
Türkish Airlines buys not large A380 or 747 but smaller A330 and Boing 777 and offere more trips at different times.
Gore: 150.
ALDI North: 54 stores per region.
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33. Details
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34. © Institute for Simplicity, Dieter Brandes & Nils Brandes