From estimates to evidence: How Leuze optimizes production costs and mitigates risk with Luminovo

For over 60 years, Leuze has been a pioneer in developing and manufacturing intelligent sensor and safety solutions for automation technology. In their OEM business, the development of proprietary sensors and systems, economic success depends heavily on the ability to accurately evaluate and de-risk R&D investments. By partnering with Luminovo, Leuze has transitioned from manual, Excel-based assumptions to a data-driven, transparent calculation model, enabling board-level decisions based on real-time facts.

"In the past, precise cost calculations often weren't finalized until the product design was complete. Only then would we uncover lifecycle issues, compliance gaps, or pricing discrepancies. Today, we see all of this at the touch of a button before the project even begins."

Georg Denkinger, Business Development, Leuze

The challenge: The "black box" of early-stage development

During the early conceptual phases, before PDM and ERP master data are established, costing is notoriously imprecise and labor-intensive. Historically, Leuze could only generate a high-fidelity cost analysis once the data reached their ERP system (SAP).

The consequences:

• Late-stage discovery: Calculations arrived only after design completion, based on prototype data.

• Hidden risks: Lifecycle and compliance hurdles (EOL, RoHS, REACH) often went undetected until it was too late to pivot cheaply.

• Siloed data: A lack of a unified data foundation between R&D, Procurement, and Project Management.

• Speculative ROI: Decisions on new developments were based on "ballpark" manufacturing costs, even though these costs combined with sales volume dictate the ultimate return on investment.

"Knowing your electronics costs only after the fact is like building a house and finding out the price of the foundation after the roof is on."

Georg Denkinger, Business Development, Leuze

With Luminovo: Transforming a BOM into a strategic document

Leuze now utilizes Luminovo’s procurement intelligence to generate reliable calculations during the conceptual phase:

• Automated BOM management: Luminovo validates Manufacturer Part Numbers (MPNs), lifecycle status, and RoHS/REACH compliance while proactively suggesting technical alternatives.

• Real-time cost transparency: Direct API integration with distributors allows for instant scenario modeling based on price versus lead time.

• Rapid simulation: Production plans and test strategies (e.g., Flying Probe vs. Bed of Nails) are compared side-by-side.

• Accelerated investment decisions: Electronic manufacturing costs, representing roughly 50% of the total product cost, are now available within 24 hours rather than weeks. This allows management to approve R&D budgets with unprecedented confidence.

Case study: Identifying 17% savings through strategic re-shoring

Using Luminovo, Leuze re-evaluated a sensor project originally manufactured in Asia. The analysis revealed that through optimized component selection, lifecycle auditing, and European manufacturing, they could achieve a 17% reduction in production costs, despite the higher regional labor rates.

The outlook: Fact-based strategic negotiation

With the implementation of Luminovo, Leuze is further expanding its digital footprint. An initial benchmark of 44 items with a €500,000 volume revealed a 10% savings potential compared to historical averages, achieved through total transparency across all MPN variants.

"We can now synthesize market intelligence, volume data, and technical equivalency to build realistic negotiation packages and actively manage price volatility. We no longer leave the decision to the supplier; we dictate the variants and negotiate based on hard data."

Dimitri Skoric, Project Procurement, Leuze

Performance metrics at a glance