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0.  Properties
- Meeting Date: 2024-03-05
- Meeting Type: Call
- Note Type: Summary
- Attendees: Loreen Knauss; Stefan Weber; Jonathon Rosenberger

1.  Meeting Summary
We reviewed Germany's S/4HANA logistics stabilization, US launch execution, parcel expansion design, packaging supplier transition, and the Systainer Systems project in the US.  Germany has stabilized outbound flows to the US at roughly six containers per week and expects to eliminate the 48-hour simulated export-document workaround next week.  Key friction remains in pre- and post-warehouse SAP steps driven by EWM/TM/SD integration, which is complicating goods issue, customs, and transportation processes and straining team capabilities.  Hypercare for the logistics workstream in Germany will need to be extended past March to support design corrections and testing, and there is a risk to market service levels without better KPI transparency and predictable lead times.

In the US, we launched a small spring program (KSC 60 energy set and Domino) and will be caught up within a few business days.  A mislabeled marketing collateral delivery that arrived just before ship date created rework; we need earlier delivery and QC of collateral and displays.  Backorders are accumulating due to prior container gaps; we are planning headcount and shift coverage for when inbound volumes recover.  We are pursuing North American sourcing for WPS to reduce volatility and cost-to-serve.  The SAP R/3 update targeted for June collides with our peak launch window; we need clarity on scope and timing before we commit.

Parcel expansion design is nearly complete.  By rotating the current pack line, adding powered conveyance, and installing a flex conveyor for direct floor loads into trailers, we can scale from 6 to 16 pack stations, drive better trailer cube, and significantly improve ergonomics.  Packaging supplier transition revealed legacy measurement inaccuracies from our prior supplier; we have corrected specs with the new supplier and contained operational impact.  Systainer Systems is close to shipping first orders after standing up systems, inventory, and infrastructure over the last two weeks.

Learnings and watchouts: Germany needs daily, market-level KPI transparency to set customer expectations and prioritize constrained capacity, especially for key online dealers.  Team morale remains strong despite the grind; overtime and Saturday tests are being used to catch up.  Permitting for the Germany expansion progressed with a 40 m height approval; the second permit is expected around Easter, subject to any neighbor objections.

2.  Attendee List
- Loreen Knauss
- Stefan Weber
- Jonathon Rosenberger

3.  Action Items
- Stefan Weber
  - Eliminate the 48-hour simulated export-document process for US containers next week and confirm cutover date.
  - Stand up the Black Forest 3PL housekeeping task force and begin the end-to-end process reimplementation in approximately three weeks; report weekly progress and residual risks to US market supply.
  - Extend logistics hypercare in Germany beyond March and publish a revised exit plan tied to process redesigns and testing.
  - Propose options to simplify S/4 goods issue and TM/EWM/SD touchpoints (target one goods issue event) and share implications for future US design.
  - Maintain overtime ramp, including the Saturday test, and communicate throughput impacts.

- Jonathon Rosenberger
  - Finalize parcel expansion designs and quotes with both vendors; target readiness to present to Scott and Amity within 1-2 weeks, then submit for investment approval.
  - Share final pack-line layout and learnings with the China team for their automated packing-line planning.
  - Align with Marketing to receive launch collateral and displays earlier for inspection/QC; define a standard QC/approval step and lead time.
  - Drive local WPS sourcing: collect reverse-engineering outputs, get quotes, and recommend interim and steady-state suppliers; assess storage impact if a large Germany shipment is required.
  - Manage backorder and inbound container recovery with staffing and shift plans to handle line spikes on receipt.
  - Close the corrugate measurement gap with the new supplier and implement a permanent verification step to prevent recurrence.
  - Support Systainer Systems ramp to first outbound orders and monitor service KPIs during stabilization.
  - Engage IT on the SAP R/3 update to clarify scope, operational impact, and timing; recommend postponement if it conflicts with peak launch execution.
  - Secure a stopgap for CapEx foam domestically to protect customer repairs; coordinate with HQ on expedited replenishment versus local procurement.

- Loreen Knauss
  - Advance the KPI transparency effort beyond the logistics view to a daily, market-level lens for order status, lead times, and prioritization; align with Sales.
  - Schedule the cross-functional communication review for April with Jonathon and Scott; circulate the draft framework for input beforehand.

- Scott (me)
  - Review and decide on the parcel expansion CapEx once Jonathon presents the final package; include EHS and ergonomics benefits in the evaluation.
  - Align with IT on R/3 update risk and timing; push for a window that avoids peak launch operations.
  - Participate in the cross-functional communications framework review in April; ensure it enables proactive dealer communication on lead times and allocations.
  - Prepare for potential US storage/logistics adjustments if a large WPS shipment from Germany is approved.
  - Decide on CapEx foam mitigation path (local procurement versus air freight from HQ) to protect service quality.

4.  Relevant Timelines
- Next week: Germany aims to remove the 48-hour export-document simulation; overtime expands, including a Saturday test.
  - Linked actions: Stefan to confirm removal and report throughput.
- ~3 weeks: Start of Black Forest 3PL process reimplementation.
  - Linked actions: Stefan to launch and report status weekly.
- March and beyond: Logistics hypercare in Germany extended past March; revised exit plan pending.
  - Linked actions: Stefan to publish updated plan.
- Spring launch: Shipping began this week; US catch-up by Friday or Monday next week.
  - Linked actions: Jonathon to complete; ensure collateral QC process is in place for future launches.
- April: Cross-functional communication framework meeting (Loreen to schedule with Jonathon and Scott).
- June (target, under review): SAP R/3 update; risk of collision with peak launch activity.
  - Linked actions: Jonathon and Scott to engage IT and recommend timing.
- 2026: Early US S/4 alignment activities may begin.
- 2027: US S/4 preparation/blueprinting led by global; high workload for common teams.
- 2028-01-01: Target US S/4 go-live.
- Germany expansion: 40 m height permit received; second permit expected around Easter; realization phase start subject to objections.

5.  Additional Notes
- Germany backlog math: ~90,000 order lines in process; ~9,000 lines/day throughput.  At current pace, roughly 10 days of work WIP; to claw back one day per week, daily throughput must increase by ~20 percent.  Overtime plans are intended to compress this.
- Dealer risk: Without credible lead times, larger online dealers risk delisting Festool due to their own customer rating exposure.  Daily, market-level KPIs and clear allocation rules are urgent.
- SAP design risk: The current EWM/TM/SD setup introduces triple goods issue touchpoints and requires scarce TM expertise.  We should assess leaner configurations for the US to reduce failure modes and training burden.
- US parcel expansion: Powered conveyance and flex loading will cut manual handling, reduce palletization, improve trailer cube, and nearly triple pack capacity.  Include EHS benefits in ROI.
- Packaging transition: Institutionalize first-article measurement validation with any supplier change-over to avoid legacy spec drift.
- CapEx foam: US is out; local sets are ~$30 vs.  $7-8 from HQ.  Service risk is immediate; decision needed on short-term procurement versus air freight.
- Systainer Systems: Strong progress under tight timelines; monitor quality and SLA adherence as they clear their order backlog.
- Containers to the US: Flow is currently stable at about six per week; customs has been manageable, though occasional data gaps (e.g., container numbers) persist and need closing.