The Most Expensive Part Is the One You Don't Have

The part sitting on your shelf may cost money to keep in inventory. The part you don’t have when production stops can cost considerably more… The cost of a replacement component is rarely limited to the price of the part itself. When a critical component fails and the replacement isn’t readily available, the resulting downtime, expedited shipping, labor, and lost production can quickly outweigh the original cost of the component. Downtime on production machinery can run from thousands of dollars to tens of thousands of dollars per hour. Add to this the cost of idle workers. Then consider that in a vertical process, that machine feeds parts to the next machine or process. Now THAT next machine is losing money as it waits for the first machine and so on. The dominos begin to fall and you have a costly catastrophe.

That is why developing a thoughtful spare parts and inventory strategy is an important part of maintaining reliable operations.

Not Every Spare Part Is Created Equal

A common approach to inventory management is to stock components based primarily on purchase price or how frequently they are used. While these factors matter, they don’t always tell the full story.

A relatively inexpensive relay, sensor, or power supply may not seem important enough to keep on the shelf. But if that component has a long lead time and its failure can stop a production line, its operational value is much greater than its purchase price suggests.

On the other hand, stocking every possible replacement component isn’t practical or cost-effective. The goal is to find the balance between having what you need when you need it and avoiding unnecessary inventory.

Consider These Factors When Evaluating Critical Spares:

• Lead time: How quickly can the component be replaced?
• Production impact: What happens if the component fails?
• Availability: Is the part readily available, or is it commonly subject to extended lead times?
• Application: Does the component support a single machine or an entire production process?
• Commonality: Is the same component used throughout multiple machines or systems?
• Replacement complexity: Can your maintenance team quickly replace and configure the component?

Looking at these factors can provide a much clearer picture of which components are worth keeping in inventory.

Standardization Can Make a Difference

Another consideration is component standardization. When similar equipment uses different manufacturers, models, or specifications for the same function, maintaining spare inventory becomes more complicated. Standardizing components, where practical, can reduce the number of unique parts that need to be stocked while making replacement and maintenance more straightforward.

This doesn’t mean every application should use the same component. Application requirements should always come first. However, identifying opportunities to standardize commonly used components can simplify inventory management and reduce the risk of having the wrong replacement available when it’s needed.

Don’t Overlook the Value of Parts Kitting

For those managing recurring projects, maintenance projects, or equipment with established Bills of Materials (BOMs), parts kitting can provide another way to simplify procurement and inventory management.

Instead of ordering numerous individual components, a parts kit can consolidate the required items under a single part number. This can reduce administrative work, simplify purchasing, and help ensure that the necessary components are available together when they’re needed.

For organizations managing multiple machines or repeat projects, this approach can also make it easier to maintain consistency across the board.

Planning Before Failure

The best time to determine which parts are critical isn’t after a machine goes down. Reviewing equipment, identifying components with long or unpredictable lead times, and evaluating the potential impact of failure can help maintenance and purchasing teams make more informed inventory decisions. Our experienced technical support team stands ready to offer advice on the best methods to keep your equipment running.

A good spare-parts strategy isn’t necessarily about stocking more. It’s about stocking smarter.

At AA Electric, we work with customers to help identify component needs, source automation products, and develop parts kits around specific applications and BOMs. We can also help you find locally available alternatives to many foreign-sourced parts to prevent long wait times. Whether you’re looking to address a critical spare, simplify recurring orders, or improve your overall procurement process, having the right strategy can help keep an unexpected component failure from becoming an unexpected production problem.