Case Study: Advanced Planning & Scheduling at Leuze Electronic

By Michael Schüler, Leuze electronic, and Dr. Bernd Reineke, Abels & Kemmner

Leuze electronic no longer optimizes its purchasing and production decisions with ERP as in the past, but on the basis of the Advanced Planning & Scheduling (APS) tool DISKOVER from SCT. This provides much more accurate sales forecasts. Leuze electronic is not only impressed by the sophisticated rule sets and scheduling algorithms; working with the tool is also straightforward and extremely convenient. Management consultancy Abels & Kemmner supported the implementation.

Leuze electronic is a specialist manufacturer and provider of measuring and switching sensors, image processing and data transmission solutions, as well as components and systems. More than 1200 Sensor People at 24 locations worldwide are employed in development, production, sales and service, supported by more than 40 sales partners worldwide.

Creating a link between inventory planning and delivery reliability
Looking to optimize its high delivery readiness still further without tying up too much capital in inventories, Leuze was searching for a way to make its inventory planning more transparent in relation to the required delivery reliability. Such transparency is necessary to be able to make more informed decisions about how to adjust the degree of delivery readiness, also from a capital point of view. This is essential for sound business planning, opening up the ability to view and control inventories also from an overall enterprise perspective in line with relevant KPIs. The previously used ERP system was not fully fit for that purpose. It provided comparatively basic forecasting procedures that made it possible to establish current levels of delivery readiness and to set defaults, for example at least 95%. However, it was not possible to transparently show which materials had to be kept in stock, and in which quantities, to guarantee this readiness.

Parallel implementation of ERP and APS systems
The goal was to link the two KPIs ‘inventory’ and ‘level of delivery readiness’ more closely than in the past, and to manage them transparently. With Leuze already having decided to switch over to SAP at its company headquarters, they could certainly have used the SAP planning tool. However, as this would have proved more expensive and because of the team’s firm conviction that APS tools are overall better suited to these needs, the decision fell on the DISKOVER tool from SCT. This turned out to be the perfect solution for linking the two KPIs and simulating different scenarios based on various forecasts and safety stock levels. As a rule, this leads to smaller inventories while the delivery readiness remains the same or even goes up.

Inter-company functionality across multiple sites
The inter-company planning functions of the new APS tool were particularly attractive for Leuze electronic who use them for light barriers, barcode readers and other devices purchased from Leuze assembly, a German subsidiary based in Unterstadion. With DISKOVER, the transparent data exchange between different ERP systems wanting to seamlessly synchronize their scheduling procedures can be organized as if it were one factory. This requires support of all types of ERP systems. Leuze’s APS system has the required flexibility and integration capability as the Unterstadion site still uses InforLN.