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MRO & Procurement

MRO Inventory: Finding the Balance Between Too Much and Too Little

Maintenance stores exist to make parts available when the plant needs them.

But more inventory does not automatically mean better maintenance support.

Excess stock ties up working capital, consumes warehouse space and can become obsolete.

Too little stock can extend maintenance downtime.

The challenge is finding the right balance.

Consumption History Helps Establish Demand

Historical usage is one of the most useful starting points.

Stores teams can review:

  • annual consumption
  • frequency of issue
  • emergency demand
  • replacement patterns
  • seasonal or turnaround-related usage

This helps distinguish regularly used items from rarely required parts.

Minimum and Maximum Levels Provide Control

Many plants establish minimum and maximum stock levels.

When inventory reaches the minimum level, replenishment is triggered.

The maximum level helps prevent overstocking.

These values should reflect actual demand and lead time rather than remain unchanged for years.

Slow-Moving Stock Needs Attention

Industrial warehouses often accumulate items that have not been used for long periods.

Some may still be strategically important.

Others may no longer be required because equipment has been modified or replaced.

Slow-moving inventory should therefore be reviewed rather than automatically treated as unnecessary.

Stock Accuracy Matters

A spare that appears available in the system but cannot be found physically provides no operational protection.

Inventory records need to match actual stock.

Good warehouse discipline includes:

  • correct identification
  • bin location
  • quantity accuracy
  • controlled issue
  • periodic verification

Obsolescence Can Turn Inventory Into Waste

Long-held stock may become unusable because:

  • equipment has changed
  • specifications have been revised
  • shelf life has expired
  • storage conditions have degraded the item
  • technology has become obsolete

Inventory therefore needs periodic technical review, not just financial review.

Service Level Has a Cost

Higher inventory levels improve the probability that a required part will be immediately available.

But every additional item increases carrying cost.

The optimum inventory level depends on the value of availability relative to the cost of holding stock.

The Objective Is Availability, Not Maximum Stock

Good MRO inventory management does not aim to keep everything.

It aims to ensure that the right parts are available when needed while avoiding unnecessary inventory.

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