The MRO inventory optimisation guide
Why MRO inventory needs its own approach
Most inventory theory was written for retail and manufacturing, where demand is steady and the cost of a stockout is a lost sale. MRO inventory is different. Demand is driven by failures and maintenance plans, most items move a few times a year, and the cost of a missing part is measured in hours of lost production, not in the price of the part.
Optimising MRO inventory means holding the right parts, in the right quantities, in the right places, so that maintenance can keep assets running without tying up more working capital than necessary.
Start with consequence, not frequency
1
What makes MRO inventory different
Failure-driven demand, long lead times, OEM dependencies and the high cost of downtime. Why standard replenishment rules give poor results.
2
Criticality: equipment and material
How equipment criticality and material criticality combine to show what each part protects.
3
Classifying inventory
Value, variability and risk. Where ABC/XYZ analysis helps, and where it misleads on its own.
4
Understanding demand
Smooth, erratic, intermittent and lumpy demand, and which items should not be forecast at all.
5
Stock or no stock
Deciding whether to hold a part before deciding how many.
6
Rotables and repairables
Planning pools of components that cycle between service, repair and stock.
7
Setting stock levels
Safety stock, reorder points and order-up-to levels, and how service level drives them.
8
Maintenance plans as a demand source
Using planned work, bills of materials and shutdown schedules to see demand before it happens.
9
Excess and obsolete stock
Finding it, deciding what to do with it, and stopping it from coming back.
10
Master data and classification
Why every decision depends on clean descriptions, attributes and classification.
11
KPIs and governance
Measuring both whether the process is followed and whether it works.
Where to start
Few operations can tackle everything at once. A practical order is:
1
2
Agree on a criticality model and apply it consistently.
3
Separate items by demand pattern, so each group gets a suitable planning method.
4
Set stocking policies per group and measure the result.
5
Review and improve on a fixed cycle.