MRO and Spare Parts Management Considerations
P.J. Jakovljevic - January 11, 2005

Service Parts Management

Service or spare parts have lately become both a blessing and a curse for many like manufacturers of complex finished products. On one hand, contract manufacturing, maintenance repair and overhaul (MRO) or depot repair activities, and aftermarket service parts use or sales can generate additional revenue streams (even at a multiple level of original product sales) with high margins, and contribute significantly to corporate profits and thus offset typically lackluster growth in other mainstream operations. Yet, on the other hand, these companies must maintain large inventories of highly expensive, often slow-moving parts but susceptible to obsolescence, to satisfy customer demands for immediate delivery and action...