{"id":37942,"date":"2025-09-25T20:23:17","date_gmt":"2025-09-25T14:53:17","guid":{"rendered":"https:\/\/www.verdantis.com\/?p=37942"},"modified":"2026-02-02T12:30:47","modified_gmt":"2026-02-02T07:00:47","slug":"spare-parts-classification","status":"publish","type":"post","link":"https:\/\/www.verdantis.com\/spare-parts-classification\/","title":{"rendered":"Classification of Spare Parts"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"37942\" class=\"elementor elementor-37942\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-b21b074 e-flex e-con-boxed e-con e-parent\" data-id=\"b21b074\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-977564a elementor-widget elementor-widget-text-editor\" data-id=\"977564a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"192\" data-end=\"493\">In asset-intensive industries, spare parts represent more than mere inventory, they are critical enablers of operational continuity, safety, and cost efficiency.<\/p><p data-start=\"192\" data-end=\"493\">Poor classification of spare parts drives millions in hidden costs through excess inventory, misprocurement, and costly equipment downtime.<\/p><p data-start=\"192\" data-end=\"493\">This forms the foundation for predictive maintenance, procurement optimization, and effective MRO inventory management.\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-bdd0134 e-flex e-con-boxed e-con e-parent\" data-id=\"bdd0134\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-36c57f7 elementor-widget elementor-widget-heading\" data-id=\"36c57f7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"categories-for-classifying-spare-parts\">Categories for Classifying Spare Parts<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-7fb3981 e-flex e-con-boxed e-con e-parent\" data-id=\"7fb3981\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3438e52 elementor-widget elementor-widget-text-editor\" data-id=\"3438e52\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"192\" data-end=\"493\">The classification can be done based on multiple dimensions to streamline inventory management, maintenance planning and procurement decisions.<\/p><p data-start=\"192\" data-end=\"493\">Effective classification ensures that parts are correctly prioritized, stocked, and managed according to their operational importance. The main categories used in practice include:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-2cf6d57 e-con-full e-flex e-con e-parent\" data-id=\"2cf6d57\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-e1f4181 e-flex e-con-boxed e-con e-child\" data-id=\"e1f4181\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-569d4e9 elementor-widget elementor-widget-heading\" data-id=\"569d4e9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"by-usage-interchangeability\">By Usage &amp; Interchangeability<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-99350c9 elementor-widget elementor-widget-text-editor\" data-id=\"99350c9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"2706\" data-end=\"2806\">Usage-based classification organizes parts by how they are consumed or replaced in operations:<\/p><p data-start=\"2706\" data-end=\"2806\"><strong>1. Consumable:<\/strong> These are single-use items that are consumed during operations.<\/p><p data-start=\"2706\" data-end=\"2806\"><strong>2. Rotable\/Interchangeable:<\/strong> These are repairable, high-value assemblies that can be swapped out for a pre-serviced unit to minimize downtime.<\/p><p data-start=\"2706\" data-end=\"2806\"><strong>3. Service:<\/strong> Unlike consumables and rotables, this category refers to non-physical maintenance activities that must still be captured and standardized in the material master.<\/p><p data-start=\"2706\" data-end=\"2806\">In asset-intensive industries such as Oil &amp; Gas and Mining, many maintenance needs are fulfilled through services, which require the same structured classification, coding, and governance as tangible parts.<\/p><p data-start=\"2706\" data-end=\"2806\"><span style=\"text-decoration: underline;\"><strong>Why it matters:<\/strong> <\/span><\/p><ul><li data-start=\"2706\" data-end=\"2806\"><p>Services are often entered into ERP\/EAM systems as \u201cservice material codes\u201d (non-stock), ensuring they are visible in procurement workflows but not mistaken for consumables or rotables.<\/p><\/li><li data-start=\"2706\" data-end=\"2806\"><p>Classifying services properly prevents errors in stock management (e.g., holding \u201ccalibration\u201d as inventory).<\/p><\/li><li data-start=\"2706\" data-end=\"2806\"><p>It also improves spend visibility. Organizations can track how much is spent on outsourced services vs. physical spare parts.<\/p><\/li><\/ul><p data-start=\"2706\" data-end=\"2806\">Classifying parts by usage enables accurate stocking levels, optimizes inventory costs, and ensures rapid availability of critical assemblies.<\/p><p data-start=\"2706\" data-end=\"2806\"><strong>Example:<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-437ba85 elementor-widget elementor-widget-text-editor\" data-id=\"437ba85\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<table><thead><tr><td><p><strong>Industry<\/strong><\/p><\/td><td><p><strong>Consumables<\/strong><\/p><\/td><td><p><strong>Rotables<\/strong><\/p><\/td><td><p><strong>Service<\/strong><\/p><\/td><\/tr><\/thead><tbody><tr><td><p><strong>Oil &amp; Gas (O&amp;G)<\/strong><\/p><\/td><td><p>Seals, gaskets, lubricants<\/p><\/td><td><p>Pumps, gearboxes, turbine skids<\/p><\/td><td><p>Calibration, NDT, valve refurbishment<\/p><\/td><\/tr><tr><td><p><strong>Mining<\/strong><\/p><\/td><td><p>Drill bits, wear liners<\/p><\/td><td><p>Haul truck engines, alternators<\/p><\/td><td><p>Condition monitoring, rebuilds<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-38c1c83 elementor-widget elementor-widget-text-editor\" data-id=\"38c1c83\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong><u>Relevancy:<\/u><\/strong><\/p>\n<p>Treating <em>Service<\/em> as a distinct use category makes classification more comprehensive, ensures cleaner and <a href=\"https:\/\/www.verdantis.com\/master-data-harmonization\/\">harmonized master data<\/a>, and helps finance, maintenance, and supply chain teams see the <em>full picture of operational costs<\/em>.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-d898e0c e-con-full e-flex e-con e-parent\" data-id=\"d898e0c\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-d576c91 e-flex e-con-boxed e-con e-child\" data-id=\"d576c91\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-542462b elementor-widget elementor-widget-heading\" data-id=\"542462b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"by-cost-consumption\">By Cost &amp; Consumption<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9074502 elementor-widget elementor-widget-text-editor\" data-id=\"9074502\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"3503\" data-end=\"3636\">Cost and consumption-based classification ensures efficient capital allocation and procurement planning. Common frameworks include:<\/p><p data-start=\"3640\" data-end=\"3699\"><strong data-start=\"3640\" data-end=\"3657\">1. ABC Analysis:<\/strong> Categorizes items by consumption (concentration) value:<\/p><ul><li data-start=\"3704\" data-end=\"3782\"><strong data-start=\"3704\" data-end=\"3716\">A-items:<\/strong> High-value, low-volume parts requiring tight inventory control.<\/li><li data-start=\"3787\" data-end=\"3843\"><strong data-start=\"3787\" data-end=\"3799\">B-items:<\/strong> Medium-value, moderate consumption items.<\/li><li data-start=\"3848\" data-end=\"3924\"><strong data-start=\"3848\" data-end=\"3860\">C-items:<\/strong> Low-cost, high-volume items often managed with bulk ordering.<\/li><\/ul><p>Typical pattern: A = 10\u201320% items \/ 70\u201380% value; B = ~30% \/ 15\u201325%; C = 50\u201360% \/ 5\u201310%.<\/p><p>In Oil &amp; Gas and Mining, A-class often includes high-spec rotables and critical instrumentation.<\/p><p data-start=\"513\" data-end=\"626\">As per a report by <em><strong><a href=\"https:\/\/ibimapublishing.com\/p-articles\/40ECO\/2022\/4043622\/\" rel=\"nofollow noopener\" target=\"_blank\">IBIMA Publishing,<\/a><\/strong><\/em> spare parts in a printing industry application were classified as:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-94d47e2 elementor-blockquote--skin-border elementor-blockquote--button-color-official elementor-widget elementor-widget-blockquote\" data-id=\"94d47e2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"blockquote.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<blockquote class=\"elementor-blockquote\">\n\t\t\t<p class=\"elementor-blockquote__content\">\n\t\t\t\tAt PT XYZ in Gresik, Indonesia, an ABC analysis with EOQ methods showed that 8.6% of items (Group A) accounted for 56.8% of the budget, 18.5% of items (Group B) for 24.2%, and 72.9% of items (Group C) for 10%. This allowed high-value items to be closely managed while lower-value items were handled with simpler controls.\t\t\t<\/p>\n\t\t\t\t\t<\/blockquote>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5e62e2b elementor-widget elementor-widget-text-editor\" data-id=\"5e62e2b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"3848\" data-end=\"3924\"><strong data-start=\"3928\" data-end=\"3970\">2. HML Analysis:<\/strong> Focuses on unit cost for supplier negotiation and procurement strategy.<\/p>\n<p>High\/Medium\/Low unit price is useful when consumption data is thin, common in brownfield sites.<\/p>\n<p data-start=\"4048\" data-end=\"4229\"><strong data-start=\"4048\" data-end=\"4091\">3. SDE Analysis:<\/strong> Assesses procurement complexity and lead time.<\/p>\n<ul>\n<li data-start=\"1317\" data-end=\"1392\">\n<p data-start=\"1319\" data-end=\"1392\"><strong data-start=\"1319\" data-end=\"1330\">Scarce:<\/strong> Items with limited global suppliers or import dependencies.<\/p>\n<\/li>\n<li data-start=\"1396\" data-end=\"1473\">\n<p data-start=\"1398\" data-end=\"1473\"><strong data-start=\"1398\" data-end=\"1412\">Difficult:<\/strong> Items with long manufacturing cycles or complex logistics.<\/p>\n<\/li>\n<li data-start=\"1477\" data-end=\"1647\">\n<p data-start=\"1479\" data-end=\"1647\"><strong data-start=\"1479\" data-end=\"1488\">Easy:<\/strong> Items readily available in local markets.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"1479\" data-end=\"1647\">This is particularly relevant for deepwater subsystems in Oil &amp; Gas or large haul truck components in Mining.<\/p>\n<p data-start=\"4233\" data-end=\"4381\"><strong data-start=\"4233\" data-end=\"4272\">4. SOS Analysis:<\/strong> Identifies demand patterns tied to operational cycles or seasonal consumption, reducing obsolescence risk.<\/p>\n<p>Season vs off-season usage especially relevant for Mining shutdown seasons and Oil Sands winterization kits.<\/p>\n<p data-start=\"136\" data-end=\"227\"><strong data-start=\"136\" data-end=\"225\">5. VED Analysis: <\/strong>Evaluates spare parts based on criticality to operations and safety.<\/p>\n<ul data-start=\"229\" data-end=\"683\">\n<li data-start=\"229\" data-end=\"408\">\n<p data-start=\"231\" data-end=\"408\"><strong data-start=\"231\" data-end=\"245\">Vital (V):<\/strong> Parts whose failure immediately halts production or compromises safety. They must always be in stock (e.g., ESD valves in Oil &amp; Gas, braking systems in Mining).<\/p>\n<\/li>\n<li data-start=\"409\" data-end=\"560\">\n<p data-start=\"411\" data-end=\"560\"><strong data-start=\"411\" data-end=\"429\">Essential (E):<\/strong> Parts that affect performance but allow operations to continue at reduced efficiency. Lead time can be tolerated to some extent.<\/p>\n<\/li>\n<li data-start=\"561\" data-end=\"683\">\n<p data-start=\"563\" data-end=\"683\"><strong data-start=\"563\" data-end=\"581\">Desirable (D):<\/strong> Low-impact parts that do not stop operations if unavailable. Stocking can be minimized or deferred.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"685\" data-end=\"821\">This classification is widely used in industries where equipment uptime and safety are critical, such as Oil &amp; Gas, Mining, and Power.<\/p>\n<p data-start=\"101\" data-end=\"401\">In a packaging company (<em>as per a case study published by<\/em> <a href=\"https:\/\/research-portal.uws.ac.uk\/en\/publications\/a-case-study-of-spare-parts-inventory-management-system-of-packag\" rel=\"nofollow noopener\" target=\"_blank\"><em><strong>The UWS Arcade<\/strong><\/em><\/a>),<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-759f803 elementor-blockquote--skin-border elementor-blockquote--button-color-official elementor-widget elementor-widget-blockquote\" data-id=\"759f803\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"blockquote.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<blockquote class=\"elementor-blockquote\">\n\t\t\t<p class=\"elementor-blockquote__content\">\n\t\t\t\tA VED analysis of spare parts classified ~32% of items as Vital, ~57.6% as Essential, and ~10% as Desirable. By combining this with an ABC\u2011VED matrix, around 37.4% of parts fell into the highest-priority category, representing ~82% of the annual inventory expenditure. <br>\nThis prioritization enabled the company to focus inventory management, ensure critical parts were always available, reduce stockouts, optimize procurement spend, and improve overall maintenance planning.\t\t\t<\/p>\n\t\t\t\t\t<\/blockquote>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-73e2511 elementor-widget elementor-widget-image\" data-id=\"73e2511\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"600\" src=\"https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Cost-Consumption-Classification.png\" class=\"attachment-large size-large wp-image-38496\" alt=\"An image showing classification of spare parts based on the cost and consumption\" srcset=\"https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Cost-Consumption-Classification.png 1024w, https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Cost-Consumption-Classification-300x225.png 300w, https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Cost-Consumption-Classification-768x576.png 768w, https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Cost-Consumption-Classification-16x12.png 16w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-968a252 elementor-widget elementor-widget-text-editor\" data-id=\"968a252\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"69\" data-end=\"154\"><strong data-start=\"69\" data-end=\"85\">6. XYZ Analysis<\/strong>: Categorizes items based on demand variability and predictability.<\/p><ul data-start=\"156\" data-end=\"747\"><li data-start=\"156\" data-end=\"323\"><p data-start=\"158\" data-end=\"323\"><strong data-start=\"158\" data-end=\"169\">X Items<\/strong>: Demand is very stable and predictable. Stock levels can be tightly controlled with minimal safety stock. Example: Standard fasteners in manufacturing.<\/p><\/li><li data-start=\"324\" data-end=\"511\"><p data-start=\"326\" data-end=\"511\"><strong data-start=\"326\" data-end=\"337\">Y Items<\/strong>: Demand shows moderate variability or seasonal trends. Stock monitoring and forecasting are needed to avoid shortages. Example: Cooling system filters used more in summer.<\/p><\/li><li data-start=\"512\" data-end=\"747\"><p data-start=\"514\" data-end=\"747\"><strong data-start=\"514\" data-end=\"525\">Z Items<\/strong>: Demand is highly irregular or unpredictable. Often emergency-use or rarely consumed items. Higher safety stock or \u201corder-on-demand\u201d strategies are required. Example: Spare parts for older machinery or legacy equipment.<\/p><\/li><\/ul><p data-start=\"749\" data-end=\"970\">XYZ classification is particularly useful when combined with ABC analysis (value-based) to form an ABC-XYZ matrix, helping organizations prioritize inventory management efforts by balancing cost, availability, and risk.<\/p><p data-start=\"972\" data-end=\"1217\">This approach is widely applied in asset-intensive industries such as Oil &amp; Gas, Mining, and Utilities, where aligning inventory levels with demand variability improves operational efficiency and reduces working capital tied up in spare parts.<\/p><p data-start=\"972\" data-end=\"1217\">By combining ABC, HML, SDE, VDE, XYZ and SOS, organizations can optimize inventory policies and ensure cost-effective MRO operations.<\/p><p data-start=\"972\" data-end=\"1217\">Accurately classified and <a href=\"https:\/\/www.verdantis.com\/spare-parts-management\/\">managed spare parts data<\/a> ensures that each classification is reflected consistently across ERP and MRO systems, enabling data-driven decisions and predictive analytics.<\/p><p><strong><u>Relevancy:<\/u><\/strong><\/p><p>ABC\/HML standardizes value tiers across ERPs; SDE highlights procurement and lead-time risks for critical BOMs; SOS maps seasonal or operational demand cycles; VED ensures stocking aligns with operational criticality and safety priorities; and XYZ flags demand variability, helping optimize safety stock and reduce excess inventory.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-66a17b1 e-con-full e-flex e-con e-parent\" data-id=\"66a17b1\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-184b947 e-flex e-con-boxed e-con e-child\" data-id=\"184b947\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-c920036 elementor-widget elementor-widget-heading\" data-id=\"c920036\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"by-source\">By Source<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0c330b6 elementor-widget elementor-widget-text-editor\" data-id=\"0c330b6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"4551\" data-end=\"4658\">Source-based classification addresses procurement strategy, supplier selection, and cost-quality balance:<\/p><p data-start=\"4662\" data-end=\"4773\"><strong data-start=\"4662\" data-end=\"4704\">1. OEM (Original Equipment Manufacturer):<\/strong> Ensures exact specification compliance but may carry higher costs.<\/p><p data-start=\"4776\" data-end=\"4859\"><strong data-start=\"4776\" data-end=\"4792\">2. Aftermarket:<\/strong> Provides cost savings but requires careful quality verification.<\/p><p data-start=\"4862\" data-end=\"4942\"><strong data-start=\"4862\" data-end=\"4881\">3. Remanufactured:<\/strong> Eco-friendly, lower-cost option for high-value components.<\/p><p data-start=\"4945\" data-end=\"5047\"><strong data-start=\"4945\" data-end=\"4966\">4. Used\/Second Hand:<\/strong> Useful in emergencies or for legacy equipment where new parts are unavailable.<\/p><p data-start=\"5049\" data-end=\"5155\">According to <a href=\"https:\/\/www.mckinsey.com\/industries\/automotive-and-assembly\/our-insights\/remanufacturing-101-reviving-parts-reclaiming-value\" rel=\"nofollow noopener\" target=\"_blank\"><em><strong>McKinsey<\/strong><\/em><\/a><em><strong>,<\/strong><\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-097040d elementor-blockquote--skin-border elementor-blockquote--button-color-official elementor-widget elementor-widget-blockquote\" data-id=\"097040d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"blockquote.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<blockquote class=\"elementor-blockquote\">\n\t\t\t<p class=\"elementor-blockquote__content\">\n\t\t\t\tRemanufacturing can reduce component costs by 40\u201360% for many parts vs buying new.\t\t\t<\/p>\n\t\t\t\t\t<\/blockquote>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-acbc2ef elementor-widget elementor-widget-text-editor\" data-id=\"acbc2ef\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"5049\" data-end=\"5155\">Understanding source implications allows procurement teams to balance cost, quality, and risk effectively.<\/p><p><strong><em>Examples of Source-Based Classification in O&amp;G and Mining<\/em><\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d1a116c elementor-widget elementor-widget-text-editor\" data-id=\"d1a116c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<table><thead><tr><td><p><strong>Source Category<\/strong><\/p><\/td><td><p><strong>Oil &amp; Gas Industry Examples<\/strong><\/p><\/td><td><p><strong>Mining Industry Examples<\/strong><\/p><\/td><\/tr><\/thead><tbody><tr><td><p><strong>OEM (Original Equipment Manufacturer)<\/strong><\/p><\/td><td><p>Safety-critical valves and precision instrumentation.<\/p><\/td><td><p>High-spec drill automation components, proprietary control modules.<\/p><\/td><\/tr><tr><td><p><strong>Aftermarket<\/strong><\/p><\/td><td><p>Replacement piping components, gaskets, and non-critical fittings.<\/p><\/td><td><p>Robust market for GET (Ground-Engaging Tools) such as buckets, teeth, and cutting edges.<\/p><\/td><\/tr><tr><td><p><strong>Remanufactured<\/strong><\/p><\/td><td><p>Compressors and rotating equipment through OEM-approved remanufacturing programs.<\/p><\/td><td><p>Engines, transmissions, and major drivetrain assemblies where remanufacturing is standard.<\/p><\/td><\/tr><tr><td><p><strong>Used\/Second Hand<\/strong><\/p><\/td><td><p>Legacy pipeline spares or discontinued skids used in emergency scenarios.<\/p><\/td><td><p>Older haul truck parts salvaged to maintain legacy fleets.<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-eaade62 elementor-widget elementor-widget-text-editor\" data-id=\"eaade62\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong><u>Relevancy:<\/u><\/strong><\/p>\n<p>Consistent \u201csource\u201d flags prevent duplicate records (OEM Vs remanufactured Vs Aftermarket) and enable policy-based sourcing.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-b1230ef e-con-full e-flex e-con e-parent\" data-id=\"b1230ef\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-320c51f e-flex e-con-boxed e-con e-child\" data-id=\"320c51f\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-15b8c32 elementor-widget elementor-widget-heading\" data-id=\"15b8c32\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"by-criticality\">By Criticality<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-50eae2e elementor-widget elementor-widget-text-editor\" data-id=\"50eae2e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"5200\" data-end=\"5276\"><a href=\"https:\/\/www.verdantis.com\/critical-spares-management\/\">Criticality-based evaluation for spare parts<\/a> aligns inventory with operational impact:<\/p><p data-start=\"5280\" data-end=\"5421\"><strong data-start=\"5280\" data-end=\"5294\">1. Vital (V):<\/strong> Parts whose failure immediately stops production or compromises safety. High-priority stocking and monitoring are essential.<\/p><p data-start=\"5280\" data-end=\"5421\"><b>2. Semi-Critical Parts (SC):<\/b> These parts meet a certain minimum inventory level and a longer lead-time for semi-critical spares can be tolerated.\u00a0\u00a0<\/p><p data-start=\"5424\" data-end=\"5552\"><strong data-start=\"5424\" data-end=\"5446\">3. Non-Critical (NC):<\/strong> Components whose failure does not halt operations and can be deferred without significant consequences.<\/p><p data-start=\"5554\" data-end=\"5711\">By linking criticality to MTTR, maintenance teams can prioritize stocking, inspection, and procurement, ensuring that vital items are never out of stock.<\/p><p data-start=\"5554\" data-end=\"5711\"><em><strong>Examples of Criticality-Based Classification in O&amp;G and Mining<\/strong><\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-28c2bed elementor-widget elementor-widget-text-editor\" data-id=\"28c2bed\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<table><thead><tr><td><p><strong>Criticality Category<\/strong><\/p><\/td><td><p><strong>Oil &amp; Gas Industry Examples<\/strong><\/p><\/td><td><p><strong>Mining Industry Examples<\/strong><\/p><\/td><\/tr><\/thead><tbody><tr><td><p><strong>Vital (Critical)<\/strong><\/p><\/td><td><p>ESD (Emergency Shutdown) valves, fire\/gas sensors, subsea control modules<\/p><\/td><td><p>Braking systems, collision-avoidance sensors, crusher liners<\/p><\/td><\/tr><tr><td><p><strong>Non-Critical<\/strong><\/p><\/td><td><p>Office HVAC filters<\/p><\/td><td><p>Safety signages<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d385a35 elementor-widget elementor-widget-text-editor\" data-id=\"d385a35\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong><u>Relevancy:<\/u><\/strong><\/p><p>A uniform criticality scale (e.g., V\/S\/N with definitions) standardizes min\/max policies, safety stock, and approval workflows enterprise-wide<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3a0cf3a elementor-widget elementor-widget-image\" data-id=\"3a0cf3a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"800\" height=\"600\" src=\"https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Classification-Of-Spare-Parts.png\" class=\"attachment-large size-large wp-image-38495\" alt=\"An image showing classification of spare parts based on different approaches\" srcset=\"https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Classification-Of-Spare-Parts.png 1024w, https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Classification-Of-Spare-Parts-300x225.png 300w, https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Classification-Of-Spare-Parts-768x576.png 768w, https:\/\/www.verdantis.com\/wp-content\/uploads\/2025\/09\/Classification-Of-Spare-Parts-16x12.png 16w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-32a64e5 e-con-full e-flex e-con e-parent\" data-id=\"32a64e5\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-8cb982e e-flex e-con-boxed e-con e-child\" data-id=\"8cb982e\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-8200967 elementor-widget elementor-widget-heading\" data-id=\"8200967\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"by-demand-pattern\">By Demand Pattern<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-a51b752 elementor-widget elementor-widget-text-editor\" data-id=\"a51b752\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"5760\" data-end=\"5829\">Demand-based classification ensures alignment with usage frequency:<\/p><p data-start=\"5833\" data-end=\"5912\"><strong data-start=\"5833\" data-end=\"5849\">1. Fast-Moving:<\/strong> Frequently used parts that require continuous replenishment.<\/p><p data-start=\"5915\" data-end=\"6014\"><strong data-start=\"5915\" data-end=\"5931\">2. Slow-Moving:<\/strong> Infrequent use, managed with controlled stock levels to prevent capital lock-up.<\/p><p data-start=\"6017\" data-end=\"6163\"><strong data-start=\"6017\" data-end=\"6041\">3. Non-Moving\/Obsolete:<\/strong> Items that rarely, if ever, see consumption. <a href=\"https:\/\/www.verdantis.com\/parts-obsolescence-management\/\">Strategic management of obsolete spare parts<\/a> helps free up warehouse space and reduce carrying costs.<\/p><div class=\"elementor-element elementor-element-5a97726 elementor-widget elementor-widget-text-editor\" data-id=\"5a97726\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\"><div class=\"elementor-widget-container\"><p><span class=\"rich-text-component css-1yjzpiw e1wnkr790\"><strong>4. Dead Stock: <\/strong>Spares that haven\u2019t been used at all in the past 12-24 months are typically tagged as \u201cdead stock\u201d.<\/span><\/p><div class=\"elementor-element elementor-element-5a97726 elementor-widget elementor-widget-text-editor\" data-id=\"5a97726\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\"><div class=\"elementor-widget-container\"><p>A study by <strong><a href=\"https:\/\/www.deskera.com\/blog\/fsn-inventory-analysis\/\" rel=\"nofollow noopener\" target=\"_blank\"><em>Deskera<\/em><\/a><\/strong> showed that,<\/p><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-27fbe6b elementor-blockquote--skin-border elementor-blockquote--button-color-official elementor-widget elementor-widget-blockquote\" data-id=\"27fbe6b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"blockquote.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<blockquote class=\"elementor-blockquote\">\n\t\t\t<p class=\"elementor-blockquote__content\">\n\t\t\t\tFSN analysis shows fast-moving goods account for 10\u201315% of inventory, slow-moving 30\u201335%, and non-moving 60\u201365%. Optimizing this mix helps prioritize critical items, reduce excess stock, and free up working capital.\t\t\t<\/p>\n\t\t\t\t\t<\/blockquote>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-94ef841 elementor-widget elementor-widget-text-editor\" data-id=\"94ef841\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"5760\" data-end=\"5829\">Analyzing historical consumption and categorizing parts by demand allows for data-driven inventory optimization.<\/p><div class=\"elementor-element elementor-element-5a97726 elementor-widget elementor-widget-text-editor\" data-id=\"5a97726\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\"><div class=\"elementor-widget-container\"><p><em><strong>Examples of Demand-Pattern-Based Classification in O&amp;G and Mining<\/strong><\/em><\/p><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6b6c6e0 elementor-widget elementor-widget-text-editor\" data-id=\"6b6c6e0\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<table><thead><tr><td><p><strong>Demand Category<\/strong><\/p><\/td><td><p><strong>Oil &amp; Gas Industry Examples<\/strong><\/p><\/td><td><p><strong>Mining Industry Examples<\/strong><\/p><\/td><\/tr><\/thead><tbody><tr><td><p><strong>Fast Moving<\/strong><\/p><\/td><td><p>Filters, common seals<\/p><\/td><td><p>PPE (Personal Protective Equipment)<\/p><\/td><\/tr><tr><td><p><strong>Slow Moving<\/strong><\/p><\/td><td><p>Specialty turbine blades<\/p><\/td><td><p>Specialized sensors<\/p><\/td><\/tr><tr><td><p><strong>Non-Moving\/Obsolete<\/strong><\/p><\/td><td><p>Obsolete skids<\/p><\/td><td><p>Discontinued drill parts<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-94edd6b elementor-widget elementor-widget-text-editor\" data-id=\"94edd6b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong><u>Relevancy:<\/u><\/strong><\/p><p>Studies depict that standardized movement codes enable automated policy selection (review frequency, reorder method) and expose disposal candidates.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-cb3ad97 e-con-full e-flex e-con e-parent\" data-id=\"cb3ad97\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-1aa52e6 e-flex e-con-boxed e-con e-child\" data-id=\"1aa52e6\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-fef9985 elementor-widget elementor-widget-heading\" data-id=\"fef9985\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"by-function-category\">By Function\/Category<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-71d0b52 elementor-widget elementor-widget-text-editor\" data-id=\"71d0b52\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"6332\" data-end=\"6413\">Functional classification groups parts based on technical or operational roles, a case of classic plant taxonomy:<\/p>\n<p data-start=\"6332\" data-end=\"6413\"><em><strong>MECH \/ ELEC \/ INST \/ SAFETY \/ CIVIL \/ IT.<\/strong><\/em><\/p>\n<p data-start=\"6492\" data-end=\"6724\">Standardized functional classification supports nomenclature consistency, eases master data management, and facilitates analytics and automation. Maintenance teams can quickly locate parts and perform cross-functional reporting.<\/p>\n<p><strong><u>Relevancy:<\/u><\/strong><\/p>\n<p>It simplifies catalog browsing, aligns to maintenance skill sets, and enables role-based approvals.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-918212c e-con-full e-flex e-con e-parent\" data-id=\"918212c\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-b492b8c e-flex e-con-boxed e-con e-child\" data-id=\"b492b8c\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-e8866f9 elementor-widget elementor-widget-heading\" data-id=\"e8866f9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"by-storage-requirements\">By Storage Requirements<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-66373c7 elementor-widget elementor-widget-text-editor\" data-id=\"66373c7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"6778\" data-end=\"6846\">Storage-based classification ensures compliance and safe handling:<\/p><ul data-start=\"6848\" data-end=\"7182\"><li data-start=\"6848\" data-end=\"6977\"><p data-start=\"6850\" data-end=\"6977\"><strong data-start=\"6850\" data-end=\"6864\">Hazardous:<\/strong> Requires specialized handling, adherence to Material Safety Data Sheets (<strong data-start=\"6938\" data-end=\"6946\">MSDS<\/strong>), and regulatory compliance.<\/p><\/li><li data-start=\"6978\" data-end=\"7062\"><p data-start=\"6980\" data-end=\"7062\"><strong data-start=\"6980\" data-end=\"6995\">Perishable:<\/strong> Items with defined shelf life requiring rotation and monitoring.<\/p><\/li><li data-start=\"7063\" data-end=\"7182\"><p data-start=\"7065\" data-end=\"7182\"><strong data-start=\"7065\" data-end=\"7087\">Climate-Sensitive:<\/strong> Components sensitive to temperature or humidity, demanding specialized warehouse conditions.<\/p><\/li><\/ul><p data-start=\"7184\" data-end=\"7291\">Proper storage classification reduces risks of spoilage, regulatory violations, and operational disruption.<\/p><p data-start=\"7184\" data-end=\"7291\"><em><strong>Examples of Storage-Requirement-Based Classification in O&amp;G and Mining<\/strong><\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c4058a9 elementor-widget elementor-widget-text-editor\" data-id=\"c4058a9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<table><thead><tr><td><p><strong>Storage Category<\/strong><\/p><\/td><td><p><strong>Oil &amp; Gas Industry Examples<\/strong><\/p><\/td><td><p><strong>Mining Industry Examples<\/strong><\/p><\/td><\/tr><\/thead><tbody><tr><td><p><strong>Hazardous<\/strong><\/p><\/td><td><p>Chemicals, EX-rated spares<\/p><\/td><td><p>Cyanide (gold processing), explosive accessories<\/p><\/td><\/tr><tr><td><p><strong>Perishable<\/strong><\/p><\/td><td><p>Sealants<\/p><\/td><td><p>Adhesives<\/p><\/td><\/tr><tr><td><p><strong>Climate-Sensitive<\/strong><\/p><\/td><td><p>Humidity-sensitive instrumentation<\/p><\/td><td><p>Electronics<\/p><\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-50dc3fe elementor-widget elementor-widget-text-editor\" data-id=\"50dc3fe\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong><u>Relevancy:<\/u><\/strong><\/p><p>It enforces labelling, MSDS links, temperature\/humidity rules across warehouses.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-f587848 e-con-full e-flex e-con e-parent\" data-id=\"f587848\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-b4ed394 e-flex e-con-boxed e-con e-child\" data-id=\"b4ed394\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-94fcada elementor-widget elementor-widget-heading\" data-id=\"94fcada\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"multi-criteria-classification\">Multi-Criteria Classification<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-eb99479 elementor-widget elementor-widget-text-editor\" data-id=\"eb99479\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"7353\" data-end=\"7653\">The most effective spare parts strategies combine multiple classification dimensions: usage, cost, criticality, demand, and storage requirements.<\/p><p data-start=\"7353\" data-end=\"7653\"><em><strong>For example,<\/strong> <\/em>a part may be A-class by cost, Vital by criticality, and Rotable by usage, enabling nuanced stocking and procurement decisions.<\/p><p data-start=\"7655\" data-end=\"7995\">Global standards such as UNSPSC or eCl@ss facilitate cross-system consistency, ensuring classification remains coherent across ERP, MRO, and procurement systems.<\/p><p data-start=\"7655\" data-end=\"7995\">Multi-criteria classification also empowers automation, predictive analytics, and data-driven decision-making, creating a single source of truth for spare parts data.<\/p><p>Most of the companies combine 3 to 5 dimensions when it comes to classification of their data: e.g., Use + Criticality + ABC + SDE + Movement.<\/p><p>According to a study conducted by <em><strong><a href=\"https:\/\/salford-repository.worktribe.com\/output\/1440701\/spare-parts-classification-and-inventory-management-a-case-study\" rel=\"nofollow noopener\" target=\"_blank\">Salford University,<\/a><\/strong><\/em>\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8a4f6cf elementor-blockquote--skin-border elementor-blockquote--button-color-official elementor-widget elementor-widget-blockquote\" data-id=\"8a4f6cf\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"blockquote.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<blockquote class=\"elementor-blockquote\">\n\t\t\t<p class=\"elementor-blockquote__content\">\n\t\t\t\t12 classes of spare parts were defined; through a hierarchical, multi-criteria classification, they achieved a ~20% reduction in total logistics cost while still meeting service target levels.\t\t\t<\/p>\n\t\t\t\t\t<\/blockquote>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-2004fc4 e-flex e-con-boxed e-con e-parent\" data-id=\"2004fc4\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-a3d7734 elementor-widget elementor-widget-heading\" data-id=\"a3d7734\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"why-classification-is-non-negotiable\">Why Classification is Non-Negotiable<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-f155eef e-flex e-con-boxed e-con e-parent\" data-id=\"f155eef\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-da3b8cb elementor-widget elementor-widget-text-editor\" data-id=\"da3b8cb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"1319\" data-end=\"1497\">Spare parts classification is more than an administrative exercise; it is a strategic enabler. By categorizing inventory correctly, organizations gain the following benefits:<\/p><p data-start=\"1461\" data-end=\"1698\"><strong data-start=\"1461\" data-end=\"1496\">1. Less Downtime, More Throughput:<\/strong><\/p><p data-start=\"1461\" data-end=\"1698\">Critical spares become both findable and forecastable, with stocking aligned to risk. DNV\u2019s O&amp;G study found that targeted spare optimization met availability targets without major system redesigns.<\/p><p data-start=\"1700\" data-end=\"1854\"><strong data-start=\"1700\" data-end=\"1726\">2. Lower Working Capital:<\/strong><\/p><p data-start=\"1700\" data-end=\"1854\"><a href=\"https:\/\/www.verdantis.com\/mro-data-cleansing\/\">Cleansed MRO data<\/a> has helped O&amp;G operators reduce working capital by 10\u201320%, translating into multi-million-dollar savings.<\/p><p data-start=\"1856\" data-end=\"2066\"><strong data-start=\"1856\" data-end=\"1879\">3. Better Forecasting:<\/strong><\/p><p data-start=\"1856\" data-end=\"2066\">AI-driven approaches now outperform classical methods in predicting demand for fast-moving, slow-moving, and non-moving spare parts, provided the inventory is consistently classified.<\/p><p data-start=\"1499\" data-end=\"1814\"><strong data-start=\"1499\" data-end=\"1521\">4. Cost Reduction:<\/strong><\/p><p data-start=\"1499\" data-end=\"1814\">Proper classification identifies duplicate or redundant items, reducing overstocking and freeing capital for critical operations.<\/p><p data-start=\"1499\" data-end=\"1814\">For example, recognizing high-value but low-demand parts (A-class in ABC analysis) allows businesses to invest selectively, minimizing inventory carrying costs.<\/p><p data-start=\"1816\" data-end=\"2140\"><strong data-start=\"1816\" data-end=\"1846\">5. Operational Efficiency:<\/strong><\/p><p data-start=\"1816\" data-end=\"2140\">Classification simplifies part identification, ensuring maintenance teams can locate required items quickly, reducing Mean Time to Repair (MTTR) and preventing unplanned downtime.<\/p><p data-start=\"1816\" data-end=\"2140\">A clear hierarchy of fast-moving versus non-moving parts ensures timely replenishment without excess stock.<\/p><p data-start=\"2142\" data-end=\"2376\"><strong data-start=\"2142\" data-end=\"2168\">6. Strategic Sourcing:<\/strong><\/p><p data-start=\"2142\" data-end=\"2376\">Categorizing parts by source, criticality, and procurement complexity helps organizations negotiate contracts effectively, select suppliers with optimal lead times, and anticipate supply chain disruptions.<\/p><p data-start=\"2378\" data-end=\"2591\">In essence, a structured classification system transforms MRO operations from reactive inventory management to data-driven strategic planning, aligning maintenance, procurement, and operational objectives.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-359567d e-con-full pointer e-flex e-con e-parent\" data-id=\"359567d\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-04738b4 elementor-widget elementor-widget-heading\" data-id=\"04738b4\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"how-do-the-leading-organizations-achieve-the-most\">How do the leading organizations achieve the most? <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-7c42451 e-con-full e-flex e-con e-child\" data-id=\"7c42451\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3952c1f elementor-widget elementor-widget-text-editor\" data-id=\"3952c1f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><em><strong><u>Oil &amp; Gas: <\/u><\/strong><\/em><\/p>\n<ul>\n<li><em>Criticality<\/em> (with supply risk) \u2192 standardizes stocking for safety\/production-critical skids.<\/li>\n<li><em>Use Type<\/em> (Consumable\/Rotable\/Service) \u2192 unlocks repair\/return loops for rotables and eliminates service-as-stock errors.<\/li>\n<li>ABC + SDE \u2192 marries value focus with lead-time risk; crucial for turnarounds and import-dependent spares.<\/li>\n<li><em>Demand Pattern<\/em> (FSM\/NM) \u2192 enables predictive stocking and identifies write-off candidates; strengthens PdM analytics.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-e3b908e e-con-full e-flex e-con e-child\" data-id=\"e3b908e\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-22bf74d elementor-widget elementor-widget-text-editor\" data-id=\"22bf74d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><em><strong><u>Mining: <\/u><\/strong><\/em><\/p>\n<ul>\n<li><em>Criticality<\/em> (safety &amp; production impact) \u2192 haulage, crushing, and fixed-plant bottlenecks dominate cost exposure. Mining maintenance is 30\u201350% of operating costs, so critical spares governance is non-negotiable.<\/li>\n<li><em>Demand Pattern<\/em> \u2192 high divergence (fast-moving GET vs slow specialty controls). Forecasts work best once classes are clean.<\/li>\n<li>ABC + HML \u2192 aligns capital to high-value rotables (engines, transmissions) while controlling the flood of C-class consumables.<\/li>\n<li><em>Storage Requirements<\/em> \u2192 hazardous\/explosive handling and climate control (dust, temperature swings) make standardized storage attributes critical for compliance and shelf-life.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-7b7f564 e-con-full e-flex e-con e-child\" data-id=\"7b7f564\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4d6a229 elementor-widget elementor-widget-text-editor\" data-id=\"4d6a229\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"1319\" data-end=\"1497\">In Oil &amp; Gas and Mining, classification is the operating system of your materials data. Get the definitions right, enforce them consistently across sites and systems, and the benefits cascade: fewer outages, safer operations, lower working capital, and clearer decisions.<\/p><p data-start=\"1319\" data-end=\"1497\">If your teams are still arguing over what counts as \u201ccritical,\u201d the ROI of harmonization is likely sitting in your storeroom.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-ef0a274 e-flex e-con-boxed e-con e-parent\" data-id=\"ef0a274\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-ff9f639 elementor-widget elementor-widget-heading\" data-id=\"ff9f639\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\" class=\"elementor-heading-title elementor-size-default\" id=\"conclusion\">Conclusion<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-c4d8371 e-flex e-con-boxed e-con e-parent\" data-id=\"c4d8371\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-2c0b3c5 elementor-widget elementor-widget-text-editor\" data-id=\"2c0b3c5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"8020\" data-end=\"8309\">Spare parts classification is the foundation of proactive MRO strategy.<\/p><p data-start=\"8020\" data-end=\"8309\">By systematically categorizing inventory across usage, cost, criticality, demand, function, source, and storage, organizations can reduce costs, improve operational efficiency, and strengthen strategic sourcing.<\/p><p data-start=\"8020\" data-end=\"8309\"><a href=\"https:\/\/www.verdantis.com\/how-to-clean-spare-parts-data\/\">Cleansing spare parts data<\/a> is essential for making classification effective. When descriptions, attributes, units of measure, and supplier details are corrected and harmonized, teams can classify items accurately, eliminate duplicates, and avoid stocking errors caused by inconsistent or incomplete data.<\/p><p data-start=\"8311\" data-end=\"8576\">Investing in data governance and standardization ensures that classified spare parts data remains accurate, reliable, and actionable, enabling enterprises to achieve operational excellence and maintain uninterrupted production in asset-intensive environments.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>This article provides a detailed examination of how spare parts can be classified based on different methods, explaining their practical applications and strategic benefits for MRO managers, procurement specialists, and inventory analysts.<\/p>\n","protected":false},"author":7,"featured_media":40581,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[64],"tags":[309],"class_list":["post-37942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-eam-mro"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/posts\/37942","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/comments?post=37942"}],"version-history":[{"count":2,"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/posts\/37942\/revisions"}],"predecessor-version":[{"id":40936,"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/posts\/37942\/revisions\/40936"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/media\/40581"}],"wp:attachment":[{"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/media?parent=37942"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/categories?post=37942"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.verdantis.com\/wp-json\/wp\/v2\/tags?post=37942"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}