Spare parts and MRO inventory management: classes of stock, min and max levels, the catalogue, kitting, and slow moving stock
How a maintenance store should manage spare parts: the classes of stock and the rule for each, setting min and max levels from lead time, usage and safety stock, the catalogue every other process depends on, kitting for planned work, the measures of a store, and the review of slow moving and obsolete stock. With a drawing of a stocked item's levels over time.
Key takeaways
- A maintenance store holds several kinds of stock that need different rules: consumables stocked by usage, planned parts bought against the job, insurance spares held by risk, and rotables managed as a repair pool.
- For stock held by usage, the reorder point is the demand during the lead time plus safety stock, and the maximum is the reorder point plus the order quantity. Real lead times come from receipts, not catalogues.
- Insurance spares break the usage rules on purpose. Setting them by usage strips out the parts that matter most, so they are decided by criticality and recorded as such.
- The catalogue is the foundation. Duplicate and badly described items cause both stock-outs and excess, because nobody can find what is already on the shelf.
- Stores exists to support the maintenance schedule. Kits ready before the schedule week and a low stock-out rate on planned work matter more than inventory value alone.
A maintenance store holds millions of dollars of stock and still cannot supply the seal kit for a planned pump overhaul. The kit is on the shelf, catalogued twice under two different descriptions, and the one the planner found shows zero. The store also holds forty of a bearing that no asset on site still uses, reordered every year by a min/max nobody has looked at since the plant was built.
This guide covers spare parts and MRO inventory management for a maintenance store: the classes of stock and how each should be stocked, how min and max levels are set, the catalogue that makes everything else work, kitting for planned work, the measures of a store, and the review of slow moving and obsolete stock. It sits beside the critical spares guide, which covers the insurance spares decision in depth. The methods are standard inventory practice, and each site's own usage data sets its numbers.
How a stocked item behaves
A stocked item is used down from its maximum until it reaches the reorder point, an order is raised, and the stock keeps falling through the lead time until the order arrives. If usage during the lead time is about average, the order lands with the safety stock untouched. If usage runs high or the supplier is late, the safety stock is what stands between the plant and a stock-out.
Most of the work in a store is getting those few numbers right for each item and keeping them right as usage changes. A min/max set when the plant was commissioned and never reviewed will be wrong for a large share of items within a few years, carrying too much of some and too little of others.
Reorder point equals demand during the lead time plus safety stock. Every stocked consumable needs those two numbers, and both should come from data.
Classes of stock
A single rule for every item is the root of most store problems. Consumables suit automatic reordering from usage. Planned parts are better bought against the job. Insurance spares, held for failures that may never happen, would be cut by any usage rule. Rotables move in a loop through repair and back to the shelf. Classing each item first lets each be managed by the rule that fits it.
| Class | What it includes | How it is stocked |
|---|---|---|
| Consumables | Filters, belts, seals, fasteners, lubricants and other parts used often and predictably | Min/max or reorder point from usage, reviewed as usage changes |
| Planned maintenance parts | Parts for known jobs: overhaul kits, wear parts and shutdown materials | Bought or reserved against the work order and the job plan, often as a kit |
| Insurance and critical spares | Parts with little or no usage held because a failure without them would cost too much | Held by risk, set by a criticality decision rather than by usage |
| Rotables and repairables | Pumps, motors, gearboxes and assemblies that are removed, repaired and returned to stock | A pool sized by failure rate and repair turnaround, tracked by serial number |
| Direct charge items | One-off purchases for a single job that never enter stock | Bought against the work order, not catalogued as stock |
Setting stock levels
For items stocked by usage, a handful of terms decide the levels. Lead time should be measured from actual receipts, because supplier quoted lead times are often optimistic and remote sites add freight time on top. Safety stock grows with how variable the usage and the lead time are, and with how few stock-outs the site will accept, so it is set per class rather than as one percentage for the whole store.
Slow moving parts with intermittent demand, used a few times a year, do not suit average usage formulas, and are better set from their history and the cost of being without them. Rotables are sized from the failure rate and the repair turnaround, tracked by serial number so the history follows the unit.
| Term | What it means | How it is worked out |
|---|---|---|
| Lead time | The time from raising a requisition to the part being on the shelf | Measured from receipts, not taken from the supplier's catalogue |
| Demand during lead time | How many are used while waiting for an order to arrive | Average usage per day multiplied by the lead time in days |
| Safety stock | Extra stock to cover usage higher than average or a late delivery | Grows with the variability of usage and lead time, and with the service level wanted |
| Reorder point (min) | The stock level that triggers a new order | Demand during lead time plus safety stock |
| Order quantity | How many are bought each time | Balances the cost of ordering against the cost of holding, often set by pack size |
| Maximum (max) | The stock level an order brings the holding back up to | Reorder point plus order quantity |
The catalogue comes first
Every other store process depends on being able to find the right item. A catalogue built from free text descriptions grows duplicates, and duplicates cause both problems at once: a stock-out on one record while the part sits on the shelf under another, and excess because both records reorder. A standard description, noun first with attributes in a fixed order, the manufacturer and part number, and a link from each item to the assets it fits through the bill of materials, are the minimum.
Cataloguing standards such as the ISO 8000 series on data quality and classification schemes such as UNSPSC help structure the work, and the same master data discipline that applies to the asset register applies here. Cleaning an old catalogue is a project in itself, best done by class starting with the items that move most.
Supporting the schedule
Stores exists to keep maintenance working. The planner identifies the parts in the job plan, stores confirms they are available or orders them, and once the job is scheduled the parts are kitted, labelled with the work order and staged before the schedule week begins. Jobs whose parts are not available are not scheduled. That simple rule protects schedule compliance and shows stock problems before a crew is standing at the job without what it needs.
Measuring the store
Inventory value is the measure finance watches, but on its own it pushes stock down until the plant pays for it in downtime. A balanced set looks at service to maintenance as well as capital held, and reads each by class, because an insurance spare that never turns is doing its job.
| Measure | What it is | What it shows |
|---|---|---|
| Stock-out rate | Share of requests for stocked items that could not be filled from the shelf | Jobs delayed or broken in for want of a part |
| Service level | The reverse of the stock-out rate, by class of stock | Whether stocking levels suit the work |
| Inventory value and turns | Value held, and how many times a year it is used | Capital tied up, by class. Insurance spares turn slowly by design |
| Slow moving and obsolete value | Value of items with no issues in a set period, or no longer fitted to any asset | Stock that should be reviewed, sold or written off |
| Kits ready on time | Share of planned jobs whose parts were kitted before the schedule week | Whether stores is supporting the schedule |
| Catalogue quality | Share of items with a full, standard description and a manufacturer part number | Duplicates and items nobody can find |
Slow moving and obsolete stock
Every store accumulates stock that no longer moves: parts for equipment that has been removed, duplicates, overbuys from a shutdown, and items reordered by levels nobody reviewed. A yearly review keeps it in check. The step most often skipped is the check with engineering, which stops insurance spares being sold off, and the step most often forgotten is fixing the cause, so the same items do not return. Equipment that has been decommissioned should trigger a review of its spares at the time.
| Step | What it involves |
|---|---|
| Find it | List items with no issues in the review period, and items not linked to any asset's bill of materials |
| Check before acting | Confirm with engineering whether the item is an insurance spare, fitted to an asset under another number, or truly unused |
| Decide | Keep and record the reason, reduce the holding, return to the supplier, sell, or write off |
| Fix the cause | Remove the min/max that keeps reordering it, merge duplicates, and update the bill of materials |
| Record it | Keep the decision against the item so the same question is not reopened next year |
Where spare parts management goes wrong
- One reorder rule for every item, so insurance spares are cut and consumables run out.
- Lead times taken from the catalogue rather than measured from receipts.
- Min/max levels set at commissioning and never reviewed.
- Free text descriptions and duplicate items, so parts on the shelf cannot be found.
- Rotables tracked as one stock line rather than by serial number, so repair history is lost.
- Inventory reduction targets met by selling insurance spares.
- Parts for planned work checked on the day the job starts instead of before it is scheduled.
Common questions
What is MRO inventory?
MRO stands for maintenance, repair and operations. MRO inventory is the stock a site holds to keep its plant running, as distinct from raw materials and finished product: spare parts, consumables such as filters and seals, lubricants, tools, rotable assemblies and insurance spares. It is usually managed in the maintenance store and catalogued in the CMMS or ERP.
How do you set min and max levels for spare parts?
For parts used regularly, the min, or reorder point, is the usage expected during the lead time plus a safety stock to cover higher usage or a late delivery. The max is the min plus the order quantity, which balances the cost of ordering against the cost of holding. Lead time should be measured from actual receipts. Parts with little or no usage, held because a failure without them would be costly, are set by a criticality decision instead.
What is the difference between a critical spare and a consumable?
A consumable is used often and predictably, so it is stocked by usage and reordered automatically. A critical or insurance spare may never be used, but a failure without it would stop the plant for longer than the business can accept, so it is held because of risk. Applying usage based rules to insurance spares tends to remove them, which is why they need their own class and an engineering decision behind each one.
What is kitting in maintenance?
Kitting is picking the parts and materials for a planned job ahead of time and staging them together, labelled with the work order, so the crew can start without a trip to the store. Kits are made up once the job is scheduled, usually in the week before. Good kitting raises the time crews spend on the job and exposes stock-outs before the job starts rather than halfway through it.
How do you reduce obsolete and slow moving spare parts?
Review the items with no issues in a set period and those not linked to any asset's bill of materials. Check each with engineering before acting, because some will be insurance spares or parts recorded under another number. Then keep and record the reason, reduce the holding, return, sell or write off, and fix the cause: the min/max that keeps reordering it, the duplicate catalogue entry, or the missing bill of materials.
Key terms
Plain-language definitions from our glossary for the concepts this article leans on.
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