Inventory and MRO glossary
Short definitions of inventory planning and MRO terms, each linking to the full topic where there is one.
A
ABC analysis
Classifying items by annual consumption value.
Average demand interval (ADI)
The average number of periods between demands. Used to classify demand patterns.
B
Bill of materials (BOM)
The list of parts that make up a piece of equipment. Links spares to the equipment they support.
C
Core
A removed, usually defective, unit returned for repair or exchange.
Criticality
How severe the consequence is if equipment fails or a part is unavailable.
Croston’s method
A forecasting method for intermittent demand that forecasts size and interval separately.
D
Dead stock
Stock with no movement over a long, defined period, often a candidate for disposal.
D
Excess stock
Stock above what the current policy and expected demand require.
Expediting
Following up open orders with suppliers so they arrive on time.
D
Fill rate
The share of the requested quantity supplied from stock.
I
Intermittent demand
Demand with many periods of zero usage.
L
Lead time
The time from placing an order to having the part available to use.
Lumpy demand
Intermittent demand that also varies widely in quantity.
M
Material master
The ERP record that describes a material: description, units, classification and planning parameters.
MRO
Maintenance, repair and operations: materials used to keep assets and facilities running, rather than in the product itself.
O
Obsolete stock
Stock that is no longer needed, often because the equipment it supports has been removed.
Order-up-to level (OUL)
The stock level an order brings inventory back to.
P
Parts exchange (PEX)
Supplying a serviceable unit in exchange for a returned core.
Plant-critical spare
A part held for protection against a high-consequence failure, not for regular consumption.
R
Reorder point (ROP)
The stock level that triggers a replenishment order.
Rotable
A repairable component that cycles between service, repair and stock.
S
Safety stock
Buffer stock that covers variability in demand and lead time.
Service level
The probability of not running out of stock during a replenishment cycle.
Supersession
When one part number replaces another, for example after a design change.
T
TSB
Teunter-Syntetos-Babai, a forecasting method for intermittent demand that responds when items stop being used.
U
UNSPSC
United Nations Standard Products and Services Code, a global classification standard.
X
XYZ analysis
Classifying items by demand variability.