Machines need spare parts. Any business operating significant quantities of machinery will carry of a stock of replacement components. Those parts fulfill a variety of purposes. They are there to replace items such as bearings, seals, and filters that wear out during normal operations, and they need to be ready for planned upgrades and overhaul activities. They act as insurance, allowing maintenance teams to fix breakdowns faster than the lead times required to secure replacements from an external supplier.
Ensuring that the organization has the right number of the right spare parts in its inventory can be a continual source of tension, however. Maintenance and operations teams want to maximize availability to reduce the risk of unplanned downtime and lost production that results from missing parts. Finance staff members want to minimize the amount of valuable capital tied up on the shelves, and they worry about obsolescence costs associated with parts bought for equipment that’s no longer in use.
Both sides are right. Research by SKF has shown that optimizing spare-parts management can reduce inventory budgets and holding costs by 15% to 20%, while simultaneously cutting stockouts (and resulting lost production) by 30% to 50%.