Key takeaways
  • Hold spares based on criticality and lead time, not on how recently something broke.
  • The cost of a stockout is downtime; the cost of overstocking is capital and obsolescence. Both are real and neither is free.
  • Most storerooms contain a substantial share of parts for equipment that has been removed or modified.
The two questions per part
How bad is the stockout, and how long is the lead time?

A part for a critical asset with a twelve-week lead time belongs on the shelf even if it has never failed. A part for a non-critical asset available next day rarely does, however often it is used.

Deciding what to hold

  • Criticality of the asset it serves.
  • Supplier lead time, including realistic delays rather than the quoted figure.
  • Failure rate and whether failures cluster.
  • Cost of the part against cost per hour of downtime.
  • Shelf life, because some items degrade whether used or not.
  • Whether the part is common across several assets, which improves the economics considerably.

Setting levels

For frequently consumed items, a reorder point based on consumption during lead time plus a safety buffer works well and suits a simple kanban. For critical spares that rarely fail, quantity is a risk decision rather than a calculation: you are buying insurance, and the premium is the capital tied up.

Keeping the storeroom honest

  • Review slow-moving stock annually and ask whether the asset still exists in that configuration.
  • Tie the asset register to the parts list, so decommissioning an asset triggers a review of its spares.
  • Count critical spares physically rather than trusting the system, because critical spares are the ones people borrow.
  • Record every issue against a work order, or consumption data is fiction and every level you calculate from it is wrong.

Storage that preserves the part

Bearings absorb moisture, elastomers perish, belts take a set if hung wrongly, and electronics suffer without protection. A critical spare that fails on installation is worse than no spare, because you discover it after the machine is already stripped. Rotating stock and storing to the manufacturer's conditions is part of holding a spare, not an optional extra.

Alternatives to holding stock

Supplier consignment stock, a shared pool with a nearby site running similar equipment, a service agreement with guaranteed response, or a documented ability to manufacture the part locally. Each transfers some of the cost, and each is worth evaluating before buying a shelf of insurance.