Usually when people (myself included) raise the topic of the cost of inventory, we talk about the financing and management costs of holding inventory. However, with spare parts, many people consider these costs to be either conceptual or "sunk" (that is, a cost that cannot be recovered). It is this view of spare-parts inventory costs that prevents many companies from taking action to review their inventory and particularly review their spare-parts inventory-management processes.
Have you ever wondered why you can’t seem to get your MRO and spare-parts inventory consistently under control while your other inventory types are well-managed?
Let’s say this out loud right at the start — no one actually wants to hold spare-parts inventory. Why would you? Inventory ties up working capital that we could otherwise use for more productive purposes.
Spare parts are the lifeblood of operational reliability and plant capacity. No plant can operate at a high level of output without a reliable supply of functional spare parts. Spare parts form the bedrock on which operational reliability is built.