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Festool

New Online Capabilities Boosts Business Potential for United States’ Power Tools Distributor

Situation

Tooltechnic Systems, LLC, is the United States’ distributor for Festool. Headquartered near Stuttgart, Germany, Festool is the seventh largest power tools manufacturer in the world. When Tooltechnic Systems first brought Festool products to the United States in the late 1990s, it used People’s Choice as its ERP system. It soon became clear that the system wasn’t supporting the needs of the business.

– Lars Fackler, Tooltechnic Systems, LLC

Solution

As an extensive user of Microsoft technology, Tooltechnic was confident that a Microsoft-based solution would provide support for its business into the future. It quickly decided that Microsoft® Dynamics™ NAV 4.0 was the best business management solution for its business.

Fackler says: “Microsoft Dynamics NAV was selected because of its scalability and flexibility. We desperately needed a system that would grow with us, rather than restricting business. Microsoft Dynamics NAV proved to be the right choice.”

Tooltechnic chose to work with Microsoft Gold Certified Partner SCS. It completed the implementation of Microsoft Dynamics NAV 2.6 in 2002, including training and customization of the solution. The system had eight users and was used for all general accounting purposes, sales and receivables, inventory and basic distribution.

Darren Atkins, SCS Account Executive, says: “Tooltechnic had specific industry requirements which needed to be met, including customized order taking, freight calculations and handling of return orders. We also handled integration with its specific database for shipping goods based on zip code information, as well as interfacing with its remote warehouse system locations at the West and East Coast to ship and track products.”

SCS provided all individual end–user training, in addition to training on Dynamics NAV’s unique Designer Tools, helping to ensure Tooltechnic could handle minor customizations themselves. This provided them with a greater understanding and hence better control of the system. Tooltechnic was able to extend its use of the system and move ahead with SCS to upgrade Microsoft Dynamics NAV to version 3.6 in 2003, as the basis for its new website plans. Tooltechnic’s existing website operated on a Linux server, with their product catalogue on a server in Germany.

Fackler says: “If the website went down, we couldn’t get timely or effective local support for the Linux server. The online catalogue management was centralised and hosted in Germany. This meant that cookies and shopping carts got lost and we couldn’t change online catalogue information ourselves. Due to the fact that we only offer 20–30 percent of the items available in Germany, we often encountered products in our online shop that we weren’t selling in the U.S. We also often encountered problems with wrong prices and incorrect specifications for our products. The major drawback was that there was no integration with our backend system. We had to print out orders and re–enter them. This was definitely not seamless e-commerce.”

Fackler continues: “We created a vision of what we wanted to accomplish online, and how it could be integrated and synchronized with Microsoft Dynamics NAV. After months of our own research, we went to SCS. We always approach SCS with problems or scenarios and they saved the day by introducing us to Digital Vantage Point.”

The online project was scoped out by SCS, who recommended its partner, Digital Vantage Point, a Microsoft Gold Certified Partner, as best able to meet the e-commerce needs of Tooltechnic.

Michael Kulik, President, Digital Vantage Point, says: “Our expertise is in e-commerce. Since 2000, we have focused our business on the Microsoft Dynamics NAV platform, extending its capabilities to meet customers’ specific e-commerce requirements. The strength of Microsoft Dynamics NAV is its flexibility and ability to manipulate data and content. As a result, our product, NAV–to–NET, is intiutive without being too complex or too expensive. It was the perfect web solution for Tooltechnic.”

Tooltechnic upgraded its infrastructure for the e-commerce solution, which now consists of Microsoft Windows ServerTM 2000, Microsoft Information Internet Server, Microsoft SQL ServerTM 2000 and added Microsoft Dynamics NAV 4.0’s Application Server as middleware. With a similar look and feel to Microsoft Dynamics NAV, end-user training on NAV–to–NET was straight forward. Because there was little customization required, the product was quick to implement and within budget. The new website went live in March 2005.

Fackler says: “We have been almost doubling sales every year since the implementation of Microsoft Dynamics NAV. We have been able to achieve this growth by using Microsoft Dynamics NAV as our back–end system to accommodate our new requirements and ever-growing distribution network, rather than adding new staff.”

Streamlined Order Process Boosts Productivity

Using Microsoft Dynamics NAV as the backbone for managing all financial processes, Tooltechnic has achieved a transformation in the way it runs its financial operations. By automating its core processes such as online ordering, productivity has been improved within the organization.

Customers go directly to the website and place orders real–time, which go directly into Microsoft Dynamics NAV’s database and are sent real–time to the warehouse for fulfillment. Orders show up in Microsoft Dynamics NAV right away, as the front–end of its website is integrated and synchronized with Microsoft Dynamics NAV 4.0 on the back–end. The online catalogue and e-commerce part of the new website are now completely managed through Microsoft Dynamics NAV. By automating the ordering process, the problem of multiple entry has been removed because there is no need to print off an order and re-enter it.

Using NAV–to–NET, end-users can manage the website themselves. Any updates on pricing or product information take place in Microsoft Dynamics NAV, and are immediately reflected on the website. Tooltechnic uses Microsoft Dynamics NAV’s Application Server to translate between Microsoft Dynamics NAV and the website. By driving everything out of Microsoft Dynamics NAV, it reduces the need for data management and system management.

Fackler says: “Microsoft Dynamics NAV is at the center of our solution. Online orders flow through Microsoft Dynamics NAV, which holds all product information. With Microsoft Dynamics NAV as the central data source, everything is maintained smoothly. There is no need for duplicate entry. This alleviates all additional work and the business is more productive.”

Online Sales Increased Tenfold with Enhanced Customer Service and Online Shopping Features, Delivering Return on Investment within Three Months. The benefits of a streamlined ordering process and enhanced online shopping features have had an immediate impact on its customers. Within one month of going live, online sales has accounted for a steady 10 percent of business. Before Tooltechnic went live with its new website, online sales accounted for only one percent of sales.

Fackler says: “We achieved a full return on our investment in the e-commerce solution within three months. The customers’ shopping experience has been enhanced. The shopping process is very intuitive with a straight forward checkout process.”

With the new system in place, Tooltechnic captures all customer information, which is then matched to an existing customer table. If it is identified as a new customer, the system immediately creates a new customer card. Customers can track order history, track status of orders, add wish list features to their online account and even update it.

Fackler continues: “Customers in the United States have high expectations and demand a high level of service, so we’re pleased that three–quarters of our online business is repeat business. Premium customer service that matches the premium quality of our products is the main focus for us. In the area of e-commerce, we are outperforming most Festool subsidiaries around the world as a result of the best practices we have achieved with Microsoft Dynamics NAV.”

B2B Developments Support Partner Business and Manage Future Growth
The combination of the e-commerce solution with the Microsoft Dynamics NAV platform has resulted in a solid infrastructure from which Tootechnics can expand into new areas.

Fackler says: “Ensuring our distribution network can benefit directly from our online capabilities is the next phase of business. Dealers will be able to access the website, manage their customers, place orders directly through the website and even look up tracking numbers within the order history.”

Fackler continues: “We have a premium strategy which is to develop high-quality products with unique features. We have to be able to distinguish ourselves by the service we offer to our dealers. We want to offer the benefits of our online infrastructure to our dealers, making it easy for them to do business with us and helping make us the tool brand of choice.”