The mismatch behind the number
An inventory total tells Finance how much capital is tied up. It does not show whether those dollars protect the assets that carry the most production risk. A storeroom can hold duplicate, obsolete, or slow-moving parts while a single critical component has no reliable source or stocking decision.
Start with demand and consequence
Review usage history alongside the asset hierarchy, equipment bills of material, failure modes, supplier lead times, repair options, and the consequence of downtime. A part with little historical demand may still deserve coverage if failure has a high operational cost. A frequently purchased part may be a candidate for tighter replenishment rather than more stock.
Look at the transactions behind the stockouts
Examine emergency purchases, planned jobs waiting on material, substitutions, and repeat failures. Separate a true stocking-policy gap from inaccurate master data, poor bin accuracy, unrecorded withdrawals, or an incomplete bill of material. Each cause calls for a different fix.
Create an accountable decision cycle
Give Maintenance and Engineering a direct role in criticality decisions. Materials and Procurement should validate lead time, stocking location, supplier alternatives, and repair economics. Finance should see both working-capital impact and the service risk that a proposed reduction creates. Review exceptions regularly as equipment and demand change.
A useful first step
Select one production line and compare its critical asset list with the parts actually available and the jobs waiting on material. That small, evidence-based review often exposes more than an across-the-board inventory target.
Put the ideas to work.
See how the MRO Excellence Assessment and book help turn evidence into priorities.