For a standard factory operation, a maintenance system will usually include an equipment spare parts inventory with its own stores management system under the engineer in charge of the operations. The system is necessary to achieve the desired level of plant availability. The basic business reason is of course, “time”. For example, a breakdown can last a few minutes to several months depending on the availability of a necessary part or material.
Keeping inventories will absorb a significant portion of the budget. However, the downtime costs of not having a required spare part often far outweigh the purchase and holding cost and this can lead to holding more (as insurance parts) in inventory than is really required. As a result, accountants will often find this area an easy target for cost savings. The problem starts if the engineer acquiescent and just reduce inventory without a diligent and thorough review. Though there will be short term cost savings, this will later lead to more inconveniences with stock-outs and other hustles if the usage rate (due to poor maintenance practices?) and lead times (in the procurement process & for the supplier) are not addressed