Festool: Improving information quality and availability in supplier communication with cloud-based solutions
Empowering supplier-related processes through digitalization
A leading manufacturer of high-quality power tools, Festool GmbH wished to improve supplier communication and management as well as standardize its processes. The SAP Business Network Supply Chain Collaboration and SAP Ariba Supplier Lifecycle and Performance solutions combined with SAP S/4HANA enable Festool to digitalize key moments with suppliers.
| Industry | Region | Company Size | Partner |
| Consumer products | Wendlingen, Germany | 2,700 employees | apsolut Group |
quantity accuracy for inbound deliveries measured against advance shipping notices.
Vendor managed inventory and consignment materials managed within first year for pilot plant.
Global Process Owner, Purchasing, Festool GmbH
Centralizing supplier-related requirements and simplifying communication
Festool GmbH, a subsidiary of TTS Tooltechnic Systems AG & Co. KG, is synonymous with high-end power tools. The company has production plants in Germany and the Czech Republic and operates in 26 countries, including the United States, Canada, France, Russia, and South Korea. With a mission to go above and beyond for its customers in terms of premium quality, Festool manufactures equipment for professionals and enthusiasts in woodworking, joinery, timber construction, carpentry, painting, and floor laying. For example, it supplies saws, sanders, drills, air purifiers, dust extractors, and a wide range of other tools.
Festool was using various systems to manage its large portfolio of products and its few thousand suppliers (approximately 1,200 direct suppliers and more indirect suppliers). The company’s IT landscape comprised a highly customized ERP environment, self-made applications, and third-party solutions. It began a business transformation drive to standardize its back-end system and streamline supplier communication to better meet its stock and demand needs.
The business sought a solution that could centralize its supplier-related requirements, namely supplier qualification, evaluation, and communication, while being easily accessible and without any required integration for its suppliers.
Global Process Owner, Purchasing, Festool GmbH
Embracing cloud-based solutions for supplier communication
Using a plant-by-plant approach, Festool is migrating from SAP ERP Central Component to SAP S/4HANA and adopting the SAP Business Network Supply Chain Collaboration and SAP Ariba Supplier Lifecycle and Performance solutions. The company is mainly using the cloud-based solutions for vendor management, serial procurement inquiries and offers, catalog procurement, purchase order collaboration, scheduling agreements, and payment documentation for parts consignment.
By integrating SAP Ariba Supplier Lifecycle and Performance with SAP S/4HANA, Festool can standardize the supplier registration, qualification, and creation processes. The company is adopting the requirements in the supplier release process, which was previously done manually, in the SAP Ariba solution. This allows Festool to gather the supplier information it needs for the internal release documents, from first contact details to supplier registration, company information, and specific questionnaires. At the outset, Festool conducted one-on-one day-long training sessions with its suppliers to enable and qualify them in the solution, and it provides one hour of ongoing support per week (mostly in account administration).
apsolut Group supported Festool with strong, straightforward project planning and technical expertise. The consultancy pointed out potential issues that could arise during the deployment, such as clarifying the specifics of Festool’s consignment processing. Dealing with issues ahead of time enabled a smooth and faster implementation of the ERP and supplier-related solutions than planned. Festool also engaged the supplier enablement service from SAP for guidance in setting up the accounts and standard documentation, such as supplier manuals and project notification letters. Another SAP team is advising the business on a supplier integration project in parallel.
Global Process Owner Purchasing, Festool GmbH
Improving information quality and availability in supplier communication
As part of the ongoing process to qualify its existing and new suppliers, Festool has onboarded about 150 suppliers in SAP Ariba Supplier Lifecycle and Performance so far. And it has enabled roughly 45 suppliers for operational purchasing processes in SAP Business Network Supply Chain Collaboration.
The collaboration solution facilitates a two-way document flow between the company and its suppliers, allowing information about purchases, confirmations, and shipping notices to be readily shared. The availability of reliable, high-quality information about quantities and expected delivery dates helps operative purchasers at Festool deliver more-efficient procurement while its logistics department can refine processes around inbound deliveries and goods receipts. For example, there’s now a day-to-day delivery schedule with consignment suppliers, and order confirmations are received within three days.
Better oversight of vendor managed inventory allows Festool to give more-regular data to suppliers than before. Instead of communicating demand information once a month and consumption information every one to two weeks, the company now provides these details each day. Rather than suppliers having to do their own planning around stock levels and replenishment, they can now react to Festool’s consumption and demand needs on a daily basis.
Global Process Owner Purchasing, Festool GmbH
Featured partner
apsolut Group is a leading consultancy specializing in spend management, business networks, procurement, supply chain, external workforce management, and more. Its expertise ranges from process consulting and IT project management to implementing holistic business transformations. apsolut was awarded SAP Ariba Partner of the Year in the Middle and Eastern European region from 2017 to 2024.