An inexpensive part may stop an entire line; an expensive one may be covered by redundancy and a fast supplier. A part’s criticality therefore depends on the risk of its unavailability, not just purchase value. Connect the component to the asset’s function, actual replenishment time and verified alternatives.
Information to gather
- Failure consequences: people, environment, quality and output under the site’s risk framework.
- Full lead time: ordering, manufacturing, shipping, receiving, preparation and installation, not just catalogue lead time.
- Actually available, tested redundancy, with capacity limits and common-cause risks.
- Repairability, confirmed interchangeability, shared inventory and authorized temporary solutions.
- Shelf life, storage requirements, obsolescence and manufacturer support ending.
An illustrative decision matrix
| Situation | Unavailability risk | Decision to assess |
|---|---|---|
| CAD 200 sensor; no redundancy; six-week lead time. | Low price but possible loss of a critical function. | Potential local stock; verify part number, compatibility and preservation. |
| CAD 20,000 module; validated redundancy; confirmed 24-hour delivery. | Potentially lower risk if redundancy lasts through the full lead time. | Assess supplier agreement or shared inventory before local purchase. |
These prices and lead times are fictional. The matrix does not authorize a safety decision or determine stock quantity by itself. A component protecting people requires separate technical validation. A “delivered tomorrow” promise must account for weekends, transport and actual availability, not just marketing.
Determine quantity and reorder point
For regularly consumed parts, examine demand during lead time and its variability, then select a risk-appropriate service level. For rarely used but critical parts, near-zero average consumption can mislead. Assess the failure scenario, number of assets using the part and possibility of simultaneous failures. Document the logic instead of applying one universal formula to every item.
Inventory must be usable when needed
A poorly preserved bearing, unconfigured controller or incompatible part does not protect operations simply by being present. Check identification, condition, preservation and required documents. Link parts lists to installed configuration and work orders. Trace inventory issues to trigger replenishment and keep quantities accurate.
Review the decision when context changes
Reassess after asset changes, longer supplier lead times, shortages, obsolescence or incidents. Track emergency purchases, blocking shortages, dormant stock and physical accuracy. Cutting total inventory value without examining interruptions can shift cost into production. The objective is controlled risk with justified stock, not the fullest or emptiest possible warehouse.