Author: André Jordaan, Partner Consultant, Pragma
Most MRO stores aren’t short of parts; they’re short of the right parts—held at the right levels and governed by a clear understanding of consequence. Many stores are packed with inventory while availability remains poor, creating a predictable clash between Finance and Operations over what “optimal” really means.
A single missing spare part can halt production, disrupt operations, and damage customer trust. In mining, a missing conveyor gearbox can stop an entire production line. In food manufacturing, a failed mixer motor can delay deliveries and trigger contractual penalties. Yet many organisations still struggle to manage Maintenance, Repair and Operations (MRO) inventory in a way that balances cost, risk and uptime.
Because spares are expensive and procurement is complex, inventory quickly becomes a focus area for Finance. Reducing stock is often seen as an obvious opportunity for improvement. But without understanding the consequences of a stockout and what truly drives demand, standard inventory optimisation falls short. The result is frustration: Finance sees “too much stock,” while Operations still experiences stockouts and risk of downtime.
When done correctly, organisations typically reduce spare parts inventory by 10–30% while maintaining or improving availability, because optimisation becomes consequence-driven rather than blanket cost-cutting.
What spare parts management is really about | Why spare parts management matters | |
| Spare parts management is a decision-making system that ensures the right spares are available to maintain assets, without tying up excessive working capital in duplicates, slow-moving items, or obsolete items. It combines governance, master data discipline, store processes, and optimisation rules so that Engineering, Maintenance, Supply Chain and Finance work from the same logic. This matters because spare parts demand is not like retail demand. It is often failure-driven, intermittent, and shaped by operating context and maintenance strategy. Treating all items the same leads to overstocking low-risk parts and under-protecting high-consequence equipment. | Downtime may be unavoidable at times, but structured spare parts management ensures it never happens for avoidable reasons.
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Pragma’s structured, practical and flexible approach
MRO maturity differs widely across industries and even across sites in the same organisation. Data quality varies, roles and accountability differ, and one-size-fits-all approaches either overstock low-risk items or expose critical equipment. That’s why Pragma’s spare parts management solution is modular: clients start with the elements that match their maturity, urgency and risk profile.
The solution is commonly grouped into three solution sets – assessment, optimisation and implementation support – selected and combined to fit your goals.
Assessments that create clarity
A strong spares strategy begins with understanding the current state: establishing a baseline, identifying inefficiencies, and exposing where downtime risk and waste are concentrated. Without this visibility, organisations risk optimising the wrong items and investing effort where it won’t shift performance.
Pragma supports this clarity through options such as:
- Spare parts maturity assessment: Evaluates current processes and performance and provides a prioritised roadmap.
- MRO spare parts profile and KPI analysis: Analyses the spares profile and procurement practices, including the extent of non- to slow-moving stock (often 40–80%), and indicators such as consolidation ratio.
- Opportunity and waste analysis: A fast scan to uncover where value can be unlocked by addressing gaps in practices and controls.
Optimisation that balances risk, cost and availability
Optimising stock levels prevents unnecessary stockpiling, releases working capital, and ensures critical assets are not left exposed. The key is to optimise where it matters by modelling consequences, rather than simply relying on average consumption history.
A distinctive feature of value-based optimisation is that the cost of a stockout is quantified in monetary terms, enabling objective decisions that Finance and Operations can both stand behind.
Depending on requirements, optimisation can include:
- Material criticality models that translate criticality into service levels and spares requirements.
- Value-based item optimisation that sets stock levels based on stockout cost and performance targets.
- Plant or line simulation using failure frequencies and spares demand, particularly useful for new plants and commissioning.
Implementation support that sustains results
Even well-optimised stock levels degrade when governance slips, codification weakens, BoMs become outdated, and CMMS/EAM and material master data drift out of sync. Implementation support closes the gap between insight and impact by embedding discipline into daily operations. This typically includes improving store administration and controls, executing opportunity and waste plans, supporting new projects with spares identification and codification, and applying continuous optimisation up to an economically sensible level.
Results you can sustain
Clients gain confidence in their spare parts strategy, improved uptime, and measurable cost savings. With the right approach, your spare parts store becomes more than a warehouse—it becomes a driver of resilience, efficiency and competitive advantage.
If you’d like to see what the offering looks like in practice, download the brochure or speak to us about where to start.
