Core 77 visits Festool - Part 8: The wrap-up

21st September, 2015

Author: Rain Noe - Core 77

A Festool design competition yields a winner; no lasers; and other fun Festool facts

As we wrap up our trip to Festool, we wanted to touch on the role of professional tool users versus hobbyists, tell our working-designer readership about some unique company qualities, and drop some random fun facts for Festool fans. These are the things that we found of interest on the trip, but which didn't quite fit into the previous installments. Here they are, in no particular order:

Where Systainers Came From—and Where They Go at the End

When Festool released the Systainers, their signature modular tool cases, there was nothing like it on the market. The modular ABS cases were stackable and locked together, making transportation a snap and bringing some much-needed uniformity to mobile tool organization. And interestingly, they were invented as the result of a design competition.

In the early '90s, Festool (then Festo) sold their tools inside of cardboard packaging, as everyone else did. In a search for something sturdier and more innovative, they held a design competition to see if someone could come up with something better. Industrial designers Martin Topel and Herbert Pauser rose to the challenge.

Topel and Pauser's original Systainer won not only the Festo competition, but 11 other international design awards. The Swiss Design Award's jury called the product a "jewel of industrial design."

You might ask why a company would intentionally produce more costly packaging, as Systainers are made from ABS plastic, which is obviously more expensive than cardboard. Interestingly, Festo only intended for the Systainers to get the tool from the distributor to the customer's shop—and then to never be seen again by the end user. "The idea was that the customer should send the packaging back," explains Regina Rittler, of Tanos Marketing. "But the Systainer never came back."

Realizing they were on to something, Festo's parent company, TTS Tooltechnic Systems, set up Tanos (sister company to today's Festool) to develop and produce Systainers full time. Tanos has their own individual design department and sells Systainers to other fields, like the medical, photography and hand tool industries as well as plumbers, woodworkers and a variety of technicians. Anja Haug of Tanos' Sales Department cited that she uses Systainers for her sailing gear while her co-workers use them to store fishing gear.

Tanos even sells them to power tool companies that compete with Festool. "This is what makes Tanos as big as it is now," says Rittler. (They've sold 19 million units to date.) "And, okay, Mafell doesn't like that Festool has the Systainer, and Festool doesn't like that Mafell also has the Systainer. But the customer likes that they can combine a Mafell Systainer with a Festool one."

The funniest moment during the Tanos presentation was when a journalist innocently asked if Systainers could be recycled. Haug seemed positively taken aback:

"It could be, but why—why—" She recovered and recomposed her sentence. "It's possible, because it's one hundred percent ABS. But it's like Regina said: It never comes back."

Why You Won't See a Festool Laser Anytime Soon

During one of the Q&A sessions, a journalist asked Festool CEO Christian Oltzscher if Festool would produce a laser level. It turns out they had looked into it and decided against it, at least for now. Oltzscher explains why:

'We don't have any expertise concerning those products and knowledge. So we'd have to either build the expertise, or buy [components from a supplier].'

'And we thought about it for a while. But it's really difficult to find the right supplier. For example, if you're a supplier and you have DeWalt as a customer, they sell some things in the hundreds of thousands; when you deal with Festool, we have very high quality requirements and [will order] smaller quantities compared to companies like DeWalt.'

'So it didn't seem that we'd find a supplier who could offer something that's better than anything else out there—or develop something with us that's our quality. Sometimes we [don't have the expertise of] how to make something better. And then, we'd rather keep our hands off, than just adding something to the product line for the sake of it. Those 'me too' products don't work for us.'

The Dichotomy Between Professional Tool Users and Hobbyists

In Part 4 we discussed how Festool designs tools specifically for professional tradesmen rather than hobbyists. I asked Oltzscher and Steve Rangoussis, Festool USA's Chief of Marketing and Sales, about the breakdown between the two categories in Festool's American end users. Their answers explain why there was previously a perception in the U.S. that their products were purchased primarily by hobbyists:

Oltzscher: 'We have rough estimates that nowadays it's about sixty percent professional, forty percent [hobbyists]. That has changed over the years. The first time we looked into it was maybe 2004 or 2005, when the brand started to take off. And back then, it was seventy percent hobbyists, thirty percent professionals.'

Rangoussis: 'Part of the hobbyist draw [during Festool USA's early days] was that we had extremely limited distribution, and brought on a large dealer with a lot of locations: Woodcraft. They cater to the hobbyist market. As a result of that we grew our hobbyist base significantly faster than our professional base in the very beginning.'

'Of course, we [subsequently] started opening up more dealers that catered to professionals. Because that's who these tools are built for, and that's how we do it around the world. In Germany for instance, you don't have a large hobbyist base; if you want to be a woodworker there, you need to go to school for training, you know?

Oltzscher: 'As I said earlier, even though it's really nice that the home hobbyist is buying our tools, we build tools for professionals. And it's changed now from 30/70 then to 60/40 now [pro/hobbyist]. And the professional segment is growing. The hobbyist segment doesn't grow as fast as the professional.'

'We found that the early adopters are usually the hobbyists. Because when it comes to professionals—let's take the most extreme example that I know, which is a solid surface countertop fabricator: If you try to convince him to change his process, you have to really convince him. Because he has used the same abrasives, the same grit, the steps, the same sander for years, and he knows exactly how he gets to the finish he needs. And then you show up with something like the Rotex, and the different kind of abrasives. It takes a lot of convincing.'

'So professionals are not normally early adopters. They rely a lot more on the word of mouth than the hobbyist. They look around, and when they see more and more tools showing up [on job sites], then they think about it. The professional needs to know before using a tool that it's going to work for their application. The hobbyist can try things, and if it doesn't work, they haven't [risked their livelihood.]'

'So with the 60/40 numbers, we can see we are getting the message across. That Festool is something you use to earn a living.'

Why It's Probably a Good Thing that Festool Doesn't Sell in American Big-Box Stores

Some of you may wonder why Festool doesn't sell at the big-box stores where you can buy many other power tool brands. First, here's an official reason:

"We are very careful about choosing the dealers we partner with," says Rangoussis. "They are typically progressive in the sense that they are willing to challenge the status quo by providing customers with actual sales services to help customers with their businesses instead of just taking an order or directing customers to an aisle.

"Festool dealers undergo extensive training so they can best advise customers about their unique business or application. At the end of the day, we are striving for a long term relationship with our dealers and our customers."

That makes good business sense, particularly when you look at a product as sophisticated as the Conturo; you can easily imagine, in the absence of a demonstration or a detailed explanation of what it does, that sitting on a store shelf forever while confused customers walk past it.

But our industrial design readership knows there might be more to the story. For those of you unfamiliar with the world of product design and mass-market retail, there's a lot of stuff going on behind the scenes. Let's look at an example, in broad strokes, of how a big-box transaction can go down with a manufacturer:

Let's say you're a power tool company offering four levels of circular saw. Models A, B, C and D, with A having the most features and being the most expensive, transitioning downwards to D having the least features and being the cheapest.

The retail chain will say something like "We'll order X-hundred-thousand units of model B—if you can sell it to us for the price of model C." Any company with shareholders is going to be under immense pressure to take that deal. But model B's cost isn't arbitrary, so to get it down to the cost of model C, that money has to come out of somewhere.

So you take it out of manufacturing, moving to a cheaper facility of lower quality. You take it out of the BOM—that's Bill of Materials, a product design's ingredient list, where every last screw, washer, wiring harness, etc., are all broken down into precise amounts. All of those parts have an associated cost. You lower those costs by going with cheaper components, replacing metal with plastic, selecting lower-quality buttons, et cetera. You take it out of the quality control, letting tolerances slide. The end result is that you get the sales order, but the product's quality suffers.

I suspect that Festool wouldn't take that deal if it were offered. That's pure speculation on my part; being a privately-held company, Festool won't release their sales details—even when I pressed Rangoussis on whether their numbers fell during the recession in 2008, he would only say "That was the only year we were flat"—so they're darn sure not going to tell me if such a talk had ever happened.

But Rangoussis had also said that Festool doesn't build to a price point. Based on what I saw at their facilities and learned of their development processes, it doesn't seem the company's style to start with a price point and work backwards from that number to determine their BOM.

So the bottom line is, it's probably better for both Festool and Festool's end users, under the current realities of large-scale retail, that their products are not available there. They are able to call their own shots and maintain the quality that got them onto the map in the first place. And I hope the example above makes it a bit more clear why some brands that used to stand for quality have lately declined. It's just a business reality of that situation, a deal-with-the-devil that some can't refuse.

Departments in the Proper Order

At the risk of being too "inside baseball," I'll again address our industrial design readership:

Many of us have seen or worked in organizations where the departments seemed scrambled or at odds with each other. Some of you work in design groups that report to Marketing, and you know the trouble that can bring. Other times the Engineering Group is at odds with the Design Group, and we'll all seen finished products where it was clear that one group "won" at the expense of the other. (This often means that, really, it's the end user who "loses.") Other times we're meant to integrate "design research" from well-intentioned parties who have the wrong background or are not asking the right questions.

In contrast Festool's product development process, as we saw in the Conturo post, is rational and well-ordered. The research is conducted by professionals with prior experience in the field they're researching. Additional studies are commissioned from outside parties, providing fresh eyes. And despite engineers vastly outnumbering designers, the parties have clearly reached agreement.

Marketing is not brought in until the end of the development process, when the design is already "ninety to ninety-five percent" locked, according to Leonhard Zirkler, Festool Business Development Manager, and they're given the time they need to understand the product and prepare for its release: "We had [the Conturo] probably one and a half years before we launched it," says Zirkler.

And during that year and a half, the product was having the heck tested out of it in the field: "We had 200 demonstration machines tested down to the last detail," says Robertine Koch, Festool Communication Manager." During this testing we used 249 miles of edge banding and four tons of glue. So, we're very, absolutely, 100 percent sure we had the perfect product."

In the Q&A post with Festool Industrial Designer Timo Kuhls, he mentioned that figuring out the order of what steps to work on during a project "comes naturally." On an organizational level, I don't know if the steps in their larger development process come naturally or as a result of careful planning, but the quality of their finished products indicates that their system works pretty well.

Why are Festool Products So Expensive?

In online tool forums, for every Festool convertee, you can find plenty of folk expressing sticker shock at Festool's prices—and sometimes entire tirades bordering on open hostility. Ditto with say, Apple's products. That's to be expected as this is America and we can vote with our dollars, and increasingly our internet posts, but what bugs me is when people don't think about the manufacturing and development of a product design and assume that profit margins are the only factor in retail cost.

In addition to all of the things we've written in this series about their development process, testing and quality control, consider also that the company manufactures 80% of their products in Germany, at their plants in Neidlingen and Illertissen pictured below. (The remaining 20% is produced at their Ceska Lipa factory in the Czech Republic, gained via their acquisition of Protool.) German labor isn't cheap, but the country and particularly the region they're in have a history of craftsmanship.

The bottom line is that all of the product development steps we've written about in this series cost money. The more you do, the more it costs, and from what we saw, Festool does a lot. And for a growing base of American end users, the expense of buy-in is producing a worthwhile return for their business.

For those interested in Festool's stuff, I hope some of what we've printed here has been interesting or illuminating. For those of you who own Festool products, I hope this series helps you see where your money goes. And for our ID readership, I hope it was fun to read about an industrial designer with a dream gig at a company that gets it right.

Read the original article here.


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