Problem 01
Reduce Excess Inventory
Material is bought while stock, open supply or another location could already cover the need.
Decision questionDo we really need to buy this material?
Professional intentAvoid unnecessary purchasing while protecting operational readiness.
01Why it matters
- Working capitalAvoid buying what stock or open supply already covers.
- AvailabilityProtect genuine maintenance demand, above all for critical spares.
- TraceabilityMake every purchase, reduction or transfer explainable afterwards.
- AccountabilityKeep the decision with a named owner, not with the system default.
02How I frame the decision
The information that drives the decision.
- S01Warehouse balanceUnrestricted stock at the requesting location.
- S02ReservationsQuantity already committed to other work orders.
- S03Open PRRequisitions raised but not yet ordered.
- S04Open PO / CONSupply already ordered, including call-offs under agreements.
- S05Min-MaxThe replenishment band the material is managed to.
- S06Other storage locationsFree stock that could be transferred instead of bought.
FromExcess Prevention Before Purchase 5 more in the article
03Knowledge
- Inventory control · Demand reviewExcess Prevention Before PurchaseDecision ruleBuy only the quantity that existing stock, open supply and controlled transfers cannot cover, and only after criticality and known future demand have been checked.
- Inventory planning · MRO sparesReorder PointDecision ruleUse the reorder point formula where demand behaves like consumption. Where demand follows the maintenance plan, the shutdown scope or the consequence of failure, set the level by those drivers and record why.
Also relevantData Is a Signal, Not the Decision
04Try the decision logic
- Excess preventionThe calculation shows stock above the maximum. What would you check before changing the open supply?Open the Decision Lab
In the article Excess Prevention Before Purchase
- Reorder point settingThe formula gives a number. Should that number go into the system?Open the Decision Lab
In the article Reorder Point
06Context and evidence
Evidence
Inventory value reduced by more than USD 23 million, a milestone the letter describes as achieved with Sabit's significant contribution.
SourceReference letter, Claudio Damanti, former line manager at KPO (2017 to 2023)
Annual total-stock-value target achieved in each of four consecutive years (paraphrased).
SourceReference letter, Lex Ruumpol, former Maintenance Superintendent (Shell)
Career context
- Spare Parts Engineervia Demand Review and Excess Prevention
- Spare Parts Superintendentvia Demand Review and Excess Prevention
- Field Materials Superintendentvia Demand Review and Excess Prevention
Related training
Learning background for this problem, not proof of results.
CredentialsExcellence in Spare Parts Inventory ManagementLogistics of Procurement, Inventory ManagementSupply Logistics, Inventory Management