What stockouts alongside overstock look like in manufacturing
Stockouts alongside overstock describes an inventory imbalance where critical parts run out at one location while excess or idle stock of the same or equivalent parts sits at another location in the same company.
The pattern shows up most in MRO and spare parts. Plants hold thousands of bearings, seals, motors, sensors and drive belts, each bought for a reason nobody remembers. Vendor research from a spare parts software company found that 32% of operations leaders report frequent stockouts of critical spares, while 22% of spare parts inventory sits unused for more than five years.[1] Both numbers come from the same companies.
Picture a packaging line that stops on a Tuesday night because a gearbox coupling fails. The maintenance lead calls the distributor and pays for next-day freight. Two hundred miles away, the sister plant has three of the same coupling on a shelf, logged under a different part number and a vague description. Nobody knew to ask, and nobody could have searched for it.
Operations Director
Carries a large inventory balance on the books and still gets calls about lines down for want of a part.
"We own millions in spares. Why are we waiting on a courier?"Plant Manager
Keeps extra stock of anything that ever caused a stoppage, because the site will be blamed for downtime, not for inventory.
"I'd rather have it and not need it."Maintenance Planner
Cannot tell whether a part is on hand at their own site, let alone at another plant, so buys new to be safe.
"The system says two. The bin says zero."CFO / Finance Leader
Sees inventory write-offs and expedite charges in the same quarter and cannot tell which plant is driving them.
"How can we be overstocked and short at once?"Are your plants short and overstocked at the same time?
Tick every statement that is true today. Three or more means the problem is likely costing you real money.
Six root causes behind stockouts and overstock at the same time
Adding more inventory does not fix this, and neither does a blanket cut. These are the causes we see most often in multi-site plants.
Each plant runs its own storeroom
Stock lives in separate systems, spreadsheets or site modules with no shared view, so every plant solves its own shortage by buying.
Part data is inconsistent
The same seal appears as a manufacturer number at one site, a distributor number at another and a free-text description at a third. If you cannot match the part, you cannot find it.
No agreed criticality ranking
Without a list of which spares stop a line and which do not, safety stock goes to whatever caused the last painful outage instead of to real risk.
Min and max levels are never revisited
Reorder points set during commissioning or copied from an old system keep buying parts that equipment changes made obsolete, while new equipment has no levels at all.
Buying from the plant floor bypasses stock checks
When a technician can order directly from a distributor, the purchase happens before anyone looks at what is already on hand elsewhere.
Transfers between plants are harder than buying
Moving a part between sites means emails, a manual transfer note and a cost allocation argument. Buying new is faster, so people buy new.
What the imbalance costs a manufacturer
The cost sits in two places that rarely appear in the same report: downtime on the plant floor and idle capital in the storeroom.
A maintenance survey of more than 1,000 professionals put the average cost of an hour of unplanned downtime at around $25,000 in 2024, and 58.9% of facilities reported lower downtime and costs with better parts inventory management.[2] The direct costs of a stockout are lost output, overtime and expedite charges. On the overstock side you pay for storage, handling, insurance and eventual write-offs. The indirect cost is behavior: after every stoppage, planners add buffer stock, which makes the overstock worse without fixing the next shortage.
Estimate the downtime cost of critical stockouts
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The expert playbook: six practices that balance spare parts across plants
These practices work in any system, including a shared spreadsheet. Start with data, because criticality and transfers both depend on knowing which part is which.
"When I was a supply chain analyst at Tesco, the answer to a shortage was almost never more stock. It was knowing where the stock already was. Plants are the same. Most of the parts you need are in your network somewhere. The work is making the transfer as easy as picking up the phone to a distributor."Md. Kafil, Co-founder and CEO, Zapro. Former senior product specialist on SAP Ariba Network and procurement transformation manager at KPMG.
Create one shared part master across plants
Rank spares by criticality with maintenance
Set min and max levels from real usage
Check network stock before every purchase
Make inter-plant transfers a two-step task
Clear slow movers every quarter
"At Voonik we saw suppliers frozen over one missing document. Spare parts behave the same way: one missing manufacturer number and a part becomes invisible to the plant that needs it. Clean the part record once, make every site use it, and the search that fails at 2 a.m. starts working."Daniel Sagayaraj, Co-founder and CTO, Zapro. Previously built and ran supplier onboarding and payments for a 15,000-supplier marketplace at Voonik.
How Zapro connects stock, requests and purchasing across plants
Zapro puts stock levels for every location next to the purchase request, so the question of whether another site already has a part gets answered before money is spent.
| Root cause | Zapro capability | What changes |
|---|---|---|
| Separate storerooms per plant | Inventory Management: multi-location stock levels | Stock for every plant and storeroom in one view, so a planner can see who holds a part before buying. |
| Transfers harder than buying | Inventory Management: transfers between locations | Move stock between plants as a recorded transfer instead of an email thread and a fresh purchase order. |
| Levels never revisited | Demand planning and low-stock alerts | Alerts fire when critical parts approach their minimum, and demand planning helps reset levels from usage. |
| Floor buying bypasses stock checks | Procurement: catalog requests, approval workflows and "Prompt to buy" | Technicians raise requests in plain language, and approvals route by rule, so purchases pass through one visible step. |
| No view of where spares money goes | Spend Analytics | Spend by plant, category and supplier shows where expedite charges and repeat buying concentrate. |
Zapro syncs vendor and master data two ways with your ERP or accounting system, so part and supplier records stay aligned across plants. See Zapro integrations.
A 30, 60, 90 day plan
Days 1 to 30: Find it
- Export stock lists from every plant and storeroom
- Map the top spares to shared part numbers
- List stockouts and expedites from the last year
- Agree criticality scoring with maintenance
Days 31 to 60: Share it
- Publish one multi-plant stock view
- Require a network check on stocked parts
- Agree the transfer price rule and senders
- Set min and max levels for critical spares
Days 61 to 90: Balance it
- Turn on low-stock alerts for critical parts
- Offer slow movers to other plants
- Return or write off the remaining excess
- Review stockouts and transfers monthly
KPIs to track progress
| KPI | How to calculate | Review |
|---|---|---|
| Critical spares stockout rate | Requests for critical spares not filled from stock divided by total critical spare requests | Monthly, by plant |
| Downtime hours waiting for parts | Maintenance downtime hours logged as waiting for a spare | Monthly |
| Transfer fill rate | Stocked-part requests filled by inter-plant transfer divided by requests where another site held stock | Monthly |
| Slow-moving inventory value | Value of spares with no movement in 24 months | Quarterly |
| Expedite spend on spares | Premium freight and rush charges on spare part orders | Monthly |
| Part master coverage | Stocked spares mapped to a shared part number divided by total stocked spares | Quarterly |
Go deeper with our guide to inventory management in procurement.
What a Zapro customer saw after moving this work into one workflow
"Implementing Zapro improved our vendor coordination significantly, leading to a substantial reduction in costs and faster vendor onboarding."Akhil Sikri, CTO, Zolo
Why Zapro for this challenge
Stockouts alongside overstock come from stock you cannot see and cannot move easily. Zapro puts every location's stock on the request itself and makes a transfer as easy as a purchase.
Stock and purchasing in one place
Inventory levels, requests, purchase orders and receipts share one record, so a buy decision always starts with what you already own.
Built for multi-site operations
Multi-location stock, transfers between locations and location-level approvals give each plant its own view without losing the network view.
Z1 takes plain-language requests
A technician can describe the part they need, and Z1 drafts the request, which keeps floor buying inside a process people will use.
Unlimited users on every plan
Plans start at $699 per month with unlimited users, so every planner, storekeeper and technician can check stock.
When Zapro may not be the right fit
- You run a single plant with one storeroom and a working CMMS spares module. The gap is process discipline, not a new system.
- You need advanced spare parts optimization with reliability modeling and failure probability forecasting. A specialist tool fits better, and Zapro can sit alongside it for purchasing.
- Your problem is production material planning inside MRP rather than MRO spares. That belongs in your ERP planning module.
Frequently asked questions
Why do we have stockouts and excess inventory at the same time?
Because inventory is held in the wrong places and the wrong parts. Separate storerooms, inconsistent part numbers and old reorder points mean one plant overbuys parts it rarely uses while another runs short of a part that stops a line. Total inventory can be high and service still poor.
What counts as a critical spare part?
A critical spare is a part whose failure stops or slows production, has a long or uncertain lead time, and has no ready substitute. Most plants score spares on production impact, lead time and availability, then hold safety stock only for the highest scores.
Should we pool spare parts across plants?
Often, yes, for expensive and slow-moving parts that several sites use. Pooling works when plants share part numbers, can see each other's stock, and have a fast, agreed transfer route. Fast-moving consumables usually stay local.
How do we reduce excess MRO inventory without risking downtime?
Start with parts that have not moved in two years and are not linked to any running equipment. Offer them to other plants first, return what suppliers will take, and write off the rest. Protect critical spares with agreed minimums before cutting anything else.
Do we need software to fix this?
Not to start. A shared part list, a criticality ranking and a rule to check other sites before buying will prevent many stockouts. Software such as Zapro becomes useful when you have several plants, thousands of parts and too many requests to check by hand.
About the experts behind this page
Sources
- SPARETECH (vendor research), The MRO paradox: How manufacturers are overspending their way into downtime, 2025
- Facilities Dive, Unplanned downtime incidents have dropped, but costs continue to rise: MaintainX, 2024
Editorial note: this page is published by Zapro, which sells procurement software. Best practices are written to work with any tool, and figures are cited to their original publishers. Last reviewed 29 September 2026; next review due March 2027. See how the Procurement Challenges Directory is researched and reviewed.