ABC Classification

Apply ABC classification to prioritise inventory management effort. Not all spare parts need the same treatment:

ClassDefinitionStocking policyExamples
A — CriticalUnavailability causes immediate production stop; long lead time (>1 week); single source or made-to-orderAlways hold minimum stock; monitor continuously; expedite if stock falls below reorder pointCustom impellers, large VFDs, specialist gearboxes, long-lead bearings, OEM-only parts
B — ImportantModerate impact on production; lead time 1–7 days; alternative sources availableHold buffer stock based on MTBF × lead time calculation; review monthlyStandard motors, pump mechanical seals, belt drives, standard industrial bearings
C — Low criticalityLow production impact or very short lead time (<1 day); widely available from multiple suppliersOrder on demand; no stock holding; or hold minimal (1 unit) if very low costV-belts, standard filters, grease cartridges, standard fasteners, gaskets

Reorder Point Calculation

For Class B parts with known consumption rates:

Reorder Point = (Average daily usage × Lead time in days) + Safety Stock

Safety Stock = Z × σ × √LT

Z = service level factor (1.65 for 95% service level; 2.33 for 99%)
σ = standard deviation of daily demand
LT = lead time in days

Example: Bearing 6310, average consumption = 0.5/week (0.07/day), σ = 0.3/week (0.043/day), lead time = 5 days, target 95% service level:
Safety stock = 1.65 × 0.043 × √5 = 1.65 × 0.043 × 2.24 = 0.16 → round up to 1
Reorder point = (0.07 × 5) + 1 = 0.35 + 1 = 1.35 → reorder when stock falls to 2

Rotating Spare Strategy

For identical critical machines (e.g., 6 identical process pumps on a site), a rotating spare strategy maintains one ready-to-install spare unit:

  • Failed machine is removed and the spare is installed immediately — minimises downtime to changeover time only (typically 2–4 hours vs. 2–7 days for repair on-site)
  • Failed unit is sent to a workshop for repair at controlled cost and quality — not rushed emergency repair
  • The repaired unit becomes the new spare in the pool
  • Recommended ratio: 1 spare per 3–5 identical critical machines; 1 spare per 1–2 machines for the most critical assets

Reducing Excess and Obsolete Stock

Excess stock (E&O) is typically 20–40% of industrial maintenance stores value in poorly managed facilities. Common causes and remedies:

Cause of excess stockRemedy
Emergency purchases during breakdowns become permanent stockReview after every emergency purchase — reclassify or dispose after the event
Equipment decommissioned but spares still heldLink spare parts to equipment in CMMS; auto-flag for disposal when equipment is removed from asset register
Duplicate stock — same part under different part numbersAnnual stock rationalisation; consolidate duplicate part numbers; use manufacturer cross-references
Minimum order quantities create over-stockingNegotiate with suppliers for smaller minimum orders; consider consignment stock arrangements
No max stock level definedSet max stock = reorder point + economic order quantity; enforce in CMMS receiving process

Stores Management Best Practices

  • Location accuracy: Every part has a defined location; parts are returned to the correct location after use — stores accuracy target >98%
  • Condition of stored parts: Bearings stored horizontally (not standing vertically); rubber parts away from UV and ozone sources; electrical equipment in anti-static packaging; seals and gaskets within shelf-life date
  • First-in, first-out (FIFO): Older stock issued first to prevent degradation — especially important for rubber and lubrication consumables
  • Annual stock count: Full physical count annually; cycle counts (partial rolling counts) monthly for high-value and high-movement items
  • Shelf life monitoring: Rubber seals, O-rings, bearing grease: maximum 2–5 years depending on storage conditions — mark arrival dates; reject expired stock