Practical warehouse decisions
A spare-parts planning workflow
Value and variability are only two parts of a stocking decision.
Start with the consequence of a stockout
A low-cost component that stops essential equipment may deserve a different policy from a high-value optional accessory. Record criticality separately from ABC value. Have the responsible technical and operations teams approve the classification.
Build the review record
- Reconcile item identity, units, supersessions and interchangeable parts.
- Measure comparable demand periods, including measured zeros.
- Record supplier lead time, reliability, minimums and available substitutes.
- Run ABC–XYZ, then add criticality, remaining life, expiry and repair/return loops.
- Agree stock/no-stock policy, approved buffer, reorder trigger, owner and review date.
Invented example
Part A costs ₹300 and has one demand in a year, but its absence stops a critical machine with a long replacement lead time. Part B costs ₹20,000, sells regularly and has two reliable suppliers. Value class alone cannot determine which deserves emergency cover. Record the downtime consequence and mitigation before deciding.
Intermittent demand
Many zero periods can make a normal-demand safety-stock approximation unsuitable. Review event frequency, repairable stock, installed base and service commitments. Do not present a precise buffer as reliable when the input history does not support it.
Download policy review worksheet