Optimizing Industrial Spare Parts Inventories: Stock Up, Procure Based on Demand, or Sell Excess Inventory?
Badico Trading Explained
Three Strategies for Efficient Spare Parts Management
- Stock Critical Replacement Parts
Spare parts are kept in-house as a precaution. This strategy is particularly suitable for critical components whose failure could lead to prolonged production interruptions or that are only available with long lead times.- Procure spare parts as needed
The replacement part is researched and procured only when there is a specific need for it. This helps reduce storage space and capital tied up in inventory. This approach is contingent on the required part—or a technically suitable alternative—being available in a timely manner.- Sell excess inventory
Inventory that is no longer needed, duplicated, or technically obsolete is reviewed and sold in a targeted manner. This frees up storage space and allows parts that are still marketable to be put to further use.
In short: An efficient spare parts inventory combines several strategies: Critical components are kept in stock, rarely needed parts are procured as needed, and inventory that is no longer needed is sold in a targeted manner.
Stock, source on demand or sell surplus inventory?
The three strategies differ primarily in terms of availability, capital tied up, storage requirements and risk. The following overview provides an initial basis for assessing your spare parts inventory.
| Comparison criterion | Stock critical spare parts | Source spare parts on demand | Sell surplus inventory |
|---|---|---|---|
| Suitable for | Critical components and parts with long lead times | Rarely required or readily available parts | Obsolete, duplicate or no longer required parts |
| Availability | Immediately available from your own inventory | Dependent on the market, manufacturer and lead time | No longer intended for the company’s own supply needs |
| Capital tied up | Comparatively high | Lower than with comprehensive stockholding | Tied-up capital can potentially be released |
| Storage requirements | Warehouse space and inventory management required | Lower level of in-house inventory | Warehouse space is freed up |
| Main risk | Parts may become technically or economically obsolete | The required part may be difficult to obtain when needed | Purchase depends on condition and market demand |
| Required information | Part number, demand, criticality and lead time | Manufacturer, part number and technical requirements | Inventory list, condition, quantity, photos and storage location |
| Support from BADICO | No inventory planning on behalf of the customer | Research and procurement of suitable spare parts | Assessment and potential purchase of suitable inventory |
Decision-Making Guide
Which strategy is best for which replacement parts?
Keeping a stock on hand can be a good idea if …
• a failure would result in high downtime costs
• the replacement part must be available immediately in an emergency
• long or uncertain delivery times are expected
• the component is needed on a regular basis
• the part is required for a key production process.
Procurement based on demand can be a good idea if …
• the spare part is needed only rarely
• external procurement is generally possible
• the manufacturer and part number are known
• the goal is to reduce storage space and tied-up capital
• a suitable alternative can be evaluated if necessary.
Selling excess inventory can be a good idea if
• machines or production lines have been reconfigured
• spare parts are duplicated or held in excess quantities
• components are no longer needed for in-house operations
• inventory exists for decommissioned machines
• storage space is needed for current components.
The appropriate strategy depends on the criticality of the component, the expected lead time, the probability of failure, and the economic value of the inventory.
Consulting Services Provided by BADICO Trading GmbH
Here's How We Support Your Spare Parts Management
We support you in two key areas: sourcing the industrial replacement parts you need and purchasing inventory you no longer need.
Purchase of Existing Excess Inventory:
You send us an inventory list including the manufacturer, item numbers, quantities, condition, photos, and storage location. We review which items are suitable for purchase and further resale. If we are interested, you will receive a customized offer.
Procurement of Required Replacement Parts:
You send us the manufacturer, machine or system type, part number, technical requirements, and quantity needed. We verify the identification and search for available original parts, compatible industrial solutions, or suitable used parts.
Frequently Asked Questions About Optimizing Industrial Spare Parts Inventories
Do you have any questions? You’ll find the answers here
That depends on the specific facility and the importance of the component. Companies often keep components in stock whose failure would result in high downtime costs, that are needed on a regular basis, or that are only available with long lead times.
Yes. We check whether the required replacement part is still available as an original part, from stock, as a used part, or as a technically suitable alternative. However, we can only confirm successful procurement after conducting a specific search.
It is helpful to provide the manufacturer, machine or system type, part number, model designation, serial number, technical specifications, quantity needed, and desired delivery date. Photos of the replacement part and the nameplate make it easier for us to identify the correct part.
Among other things, we inspect new, like-new, and used motors, gear motors, pumps, variable-frequency drives, electronic components, compressors, hydraulic and pneumatic parts, generators, and other components for machines and systems.
Yes. You can also offer us inventory that includes different manufacturers, product groups, and quantities. A structured inventory list makes it easier for us to evaluate your inventory.
Depending on the type, scope, and location of the inventory, we can include pickup and disassembly in the service. We will review the specific options and agree on them on a case-by-case basis.
Contact person
Andreas Badenjki
Managing Director- +4989-21756295
Phone
Give us a call
- info@badico-trading.com
Email
Write us an email
Adresse
BADICO Trading GmbH
Augsburger Str. 43
D-82110 Germering
Get in touch with us
Do you have any questions about our products? Then simply get in touch with us! We will be happy to advise you!