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SPARE PARTS INVENTORY MANAGEMENT. A LITERATURE REVIEW AND

DIRECTIONS FOR FUTURE RESEARCH

Conference Paper · July 2011

DOI: 10.13140/2.1.2444.1282

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 SPARE PARTS INVENTORY MANAGEMENT. A LITERATURE REVIEW AND
DIRECTIONS FOR FUTURE RESEARCH

Federico Adrodegari, Andrea Bacchetti, Nicola Saccani

Supply Chain & Service Management Research Centre - University of Brescia, Italy
Aris Syntetos
Salford Business School - University of Salford, United Kingdom

ABSTRACT
In industrial contexts the proportion of the stock range that is devoted to spare parts is
often considerable (e.g. Vereecke and Verstraeten, 1994) and small improvements in
spare parts management may be translated to substantial cost savings (Eaves and
Kingsman, 2004). Many research projects have considered issues related to the
management of spare part inventories, but very few studies have emphasised the need
to bring together the current state of knowledge in this area and critically review the
relevant research advancements. The aim of this paper is to cover this gap providing a
review of the literature currently available in this area and focusing on the main future
research challenges.

1. Introduction
Service parts for products like household appliances, automobiles and copy machines has
grown into a business worth more than a $200 billion worldwide (Gallagher et al., 2005).
Spare parts inventories need to be available at appropriate points within the supply
chain, to provide after-sales services and to guarantee the desired service level (Botter
and Fortuin, 2000). However, several aspects concur in making demand and inventory
management for spare parts a complex matter (Cohen et al., 2006): the high number of
parts managed; the presence of intermittent or lumpy demand patterns; the high
responsiveness required by customers due to downtime cost; and the risk of stock
obsolescence.
In industrial contexts the proportion of the stock range that is devoted to spare parts is
often considerable (e.g. Vereecke and Verstraeten, 1994). Despite the infrequent
demand occurrence associated with such items and the consequent low contribution to
the total turnover of an organization, these slower moving SKUs can constitute up to
60% of the total stock value. Thus, small improvements in their management may be
translated to substantial cost savings (Eaves and Kingsman, 2004).
Several challenges have been pointed out, given the complexity and relevance of spare
parts management. Boone et al. (2008) suggest that companies often lack a system
perspective, suffer the weakness of supply chain relationships and the inaccuracy of
demand forecasts. On the other hand, research has often kept a “narrow” approach
towards spare parts management, focusing on the modeling aspects and neglecting a
broader supply chain perspective (Martin et al., 2010). For this reasons some authors
argued of a gap between research and practice in spare parts management (Wagner and
Liedermann, 2008).
Many research projects have considered issues related to the management of spare part
inventories, but very few studies have emphasised the need to bring together the current
state of knowledge in this area and critically review the relevant research advancements.
The more recent contribution on this topic is the work conducted by Kennedy et al.,
2002. The aim of this paper is provide a comprehensive account of the state-of-the-art of
spare parts inventory management; we do so by conducting a review of the literature
currently available in this area and focusing on the main future research challenges.
The remaining of the paper is structured as follows: section 2 describes the research
aims of the work and the adopted methodology. Section 3 provides firstly a brief analysis
of the selected literature in terms of number and type of papers, journals and keywords,
focusing also on a time-line evolution of the contributions. Secondly in this section the
preliminary findings of the research are described, that are then summarised and
discussed in the final section (4), in which important avenues for further research are
identified.

1
 2. Objectives and search methodology
The aim of this research is to identify and collect the literature currently available on
spare parts inventory management, and to provide a critical review, in order to outline a
state of the art of this research field, and to point out directions for future research.
Preliminary results of the analysis of literature we carried out are presented in the
following sections of the paper.
We collected relevant literature in the field of service parts inventory management. In
determining the scope of the literature review, the focus has been on articles that deal
specifically with spare parts inventory management, or that are more general but easily
applicable to spare parts management, because for instance address lumpy demand
items. Examples of publications within the scope of this review are Kranenburg and van
Houtum (2008) in which the authors define the critical level policies with the aim to
exploit the differences in target service levels for spare parts inventory, or Pinçe and
Dekker (2011) who discuss an inventory model for slow moving items subject to
obsolescence.
Outside the scope of our study are papers dealing exclusively with spare parts demand
forecasting or forecasting for stock control, or addressing aspects of spare parts
management other to the inventory problem. Examples of publications that are out the
scope of this review are those such as Downing et al. (2011) in which the authors
analyze the impact of inaccurate forecasting on inventory costs, or Holmström et al.
(2010) who focus on rapid manufacturing in the spare parts supply chain.
This study focuses on literature published between 1960 and 2001, even if in the 60’s
and 70’s very few articles on spare parts inventory management were written, while
attention has sharply increased in the last two decades.
The search strategy was developed first by identifying the relevant data sources, time
frame, and keywords. Initially, a very broad selection was made (starting from an
existent database of a previous research carried out by the authors) to cover a diverse
range of publications (e.g. scientific articles, conference proceedings, theses, books and
trade journals). Collectively, these provided access to a wide variety of sources. The 80
sources initially selected for the research, have been reduced according to these criteria:
1. theses, books and general management journals (e.g. “The Harvard Business
Review”) were discarded;
2. we included journals bearing an Impact Factor and that are present in the ABS
classification1 in the "Operations and Technology Management” or “Management
Operational Research and Science” categories (27 journals were selected);
3. for journals with Impact Factor not present in the ABS categories, we choose
them if we found articles on spare parts management during a preliminary search
(3 journals were selected);
4. the remaining journals in the initial list were subject to subjective evaluation
based on their presence or absence in the ABS categories, the results of the
preliminary search and the personal judgment of the authors (8 journals were
selected).

Therefore, 38 journals were initially selected for the research, which became 41 in view
of the ongoing integration of 3 journals with more articles deemed of interest emerged
during the first phase of work.
Then a set of keywords was identified to search through the journals. The keywords were
directly associated to the spare parts inventory topic (e.g. service parts, inventory,
lumpy demand, intermittent demand, Repairable items, multi-echelon system, Inventory
Control, etcetera). Many of these keywords were combined with “spare parts” or with
“inventory” when searching the databases, in order to ensure the relevance of the
results to this study. This set was then expanded and refined as appropriate articles were

1
ABS (the British Association of Business Schools) provides a guide to the range, subject matter and relative
quality of journals in which business and management academics might publish the results of their research.
The ABS Academic Journal Quality Guide is a hybrid based partly upon peer review, partly upon statistical
information relating to citation, and partly upon editorial judgments following from the detailed evaluation of
many hundreds of publications over a long period.

2
discovered. By searching the chosen databases, using the keywords over the selected
time period, a large number of articles were initially found. The first list obtained included
about 290 papers. It was edited to remove any duplicate records, and the titles were
checked to ensure relevance to the review.
The abstracts of all the remaining articles were checked to assess their suitability for this
study. Thus, the initial database was carefully filtered to identify the contributions that
were directly relevant to our research: we ended up with 191 papers selected, related to
the topic of spare parts inventory management, constituting our final database. Due to
this refinement, only 27 of the 41 journals identified are included in the final database.
Five relevant contributions coming from conferences or working papers have also been
included in the database.
Each paper was then classified in the database according to criteria that enable to
capture and cluster the main themes and contributions. Classification criteria are mainly
related to the type of article (Modeling or Managerial), the adopted point of view
(Maintenance or After-Sales), the type of the inventory model proposed, the objective
function (costs or service level related), the relative constraints and the presence of an
application (case study, simulation experiment with or without real data from industry).
Indeed, for each article, it was noted whether it focused on specific issues such as
obsolescence, information sharing or stock location problem.

3. Preliminary findings
The search strategy previously described generated a database of 191 contributions
taken from the 27 different journals, as reported in Table 1.

Journals # of papers %
International Journal of Production Economics 38 20%
European Journal of Operational Research 33 17%
Journal of the Operational Research Society 20 10%
Management Science 17 9%
IIE Transactions 12 6%
Operation Research 9 5%
Computers and Operations Research 6 3%
Journal of Quality in Maintenance Engineering 6 3%
International Journal of Production Research 6 3%
International Journal of Operations & Production Management 5 3%
Computers & Industrial Engineering 4 2%
Omega 4 2%
Reliability Engineering and System Safety 4 2%
Expert Systems with Applications 3 2%
Journal of Manufacturing Technology Management 2 1%
IMA Journal of Management Mathematics 2 1%
Journal of Operations Management 2 1%
Manufacturing & Service Operations Management 2 1%
OR SPECTRUM 2 1%
Production Planning and Control 2 1%
Decision Support System 1 1%
International Journal of Computer Integrated Manufacturing 1 1%
International Journal of Forecasting 1 1%
International Journal of Logistics: Research and Applications 1 1%
International Journal of Physical Distribution & Logistics 1
1%
Management
International Journal of Quality & Reliability Management 1 1%
Production and Operations Management 1 1%
No Journals (conference proceedings, working papers) 5 3%
Table 1. List of journals and papers included in the literature review

3
From Table 1, we can observe that two journals alone (IJPE and EJOR) bear a very
important contribution to the literature on spare parts inventory management (71
works). The first five journal in Table 1, moreover, provide altogether 120 papers to our
database, accounting for 62% of the total.
Referring to the mentioned ABS classification, 15 journals (82 papers) belong to
“Operations and Technology Management” category, 8 (92 papers) to “Operational
Research and Management Science” class, while the other 4 (12 papers) are not
categorized.
The distribution of the papers by period (decade) shows a strong growth of contributions
especially in the recent decades, with a peak in 2000-2010; as a matter of fact we have
just 10 papers between 1960 and 1979, 73 in the following 20 years and 89 from 2000
to 2009. The first one and half year of the new decade (2010-2011) seems to maintain
this trend with 19 contributions, that testify a growth trend (projecting the data on the
new decade we would obtain an increased number of papers compared to the last
decade). We can argue that spare parts inventory management is still and increasingly in
the research agenda of scholars in Operations Management and Operations Research.

100
80

Projection
# of papers

60
40
20
0
1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-2011
(2020)
Years (decades)

Figure 1. Distribution of papers by decade (including 2010 and 2011 and a

projection on the decade 2010-2019)

It is worth of interest to point out the keywords provided in the analysed papers (Table
2).

Keywords # of occurrences % occurrences % of papers

Spare Parts 55 9,5% 36%
Inventory 49 8,5% 32%
Inventory Control 24 4,2% 16%
Maintenance 19 3,3% 13%
Repairable item 9 1,6% 6%
Lateral transhipment 9 1,6% 6%
Optimization 8 1,4% 5%
Heuristics 8 1,4% 5%
Inventory Management 7 1,2% 5%
Multi-echelon 6 1,0% 4%
Inventory Policies 6 1,0% 4%
Forecasting 5 0,9% 3%
Case study 5 0,9% 3%
Obsolescence 5 0,9% 3%
Multi-echelon system 5 0,9% 3%
Supply chain management 4 0,7% 3%
Availability 4 0,7% 3%
Military 4 0,7% 3%

4
 Keywords # of occurrences % occurrences % of papers
Distribution 4 0,7% 3%
Lumpy demand items 4 0,7% 3%
Spare Parts management 4 0,7% 3%
Inventory/production 4 0,7% 3%
Repair capacity 4 0,7% 3%
Others (249) 324 - -
Table 2. List of the most used keywords in the database

We found 271 different keywords with 576 occurrences on overall. The first 22 keywords
(reported in Table 2) appear 252 times, with an incidence of 43,8%. Obviously they are
strongly linked with the research stream analysed; as a matter of fact “spare parts”,
“inventory” and “inventory control” are the most cited keywords. Not surprisingly, “spare
parts” is the most widely used keyword. Together with “spare parts management”, it is
reported in 59 papers (around 39% of the database). However, it appears in less than
one third of the reviewed literature, or less than half the 143 works specifically
addressing spare parts (see below). This implies that this only keyword would not have
been sufficient to carry out a comprehensive literature review. The other most cited
ones, “inventory” and “inventory control” are very general, and not of great help since if
used alone, they would point to a huge number of papers out of the scope of this
research. In the search phase, they have been rather used together with other search
keywords. Finally we find out that a part the 22 keywords reported in the database
(bearing at least 4 occurrences) other 249 are present in the database, most of them
with just one occurrence. This testifies the variety of aspects considered by literature on
spare parts inventory management.

Among the 191 selected contributions, 143 are specific for spare parts inventory
management, while the other 48 deal to inventory management for intermittent demand
items and so they are applicable to spare parts.
All the analyzed papers are relevant within the wider manufacturing context, referring
both to maintenance (53 contributions) and after-sales (138) operations. We associated
with the maintenance point of view also the customer’s one (e.g. a company that needs
to carry out maintenance activities on its own equipment and needs to dimension its
spare parts stocks), and to the After-sales point of view the manufacturer/supplier’s one
(e.g. a manufacturer of durable goods that needs to dimension stocks along the
distribution network to supply its spare parts customers).
In 54% of cases, papers address repairable spare parts while 36% of contributions
consider non repairable spare parts and the last 10% both repairable and non repairable.
59% of the authors investigate a multi echelon scenario, while the other 41% focus on a
single echelon supply chain (Figure 2).

10%

41%

36% 54%
59%

Repairable Non repairable Both Multi echelon Single echelon

Figure 2. Repairable vs. Non repairable spare parts & Multi vs. Single echelon

5
127 papers (66%) focus on spare parts inventory management models (we include it in
the category “modeling”), while 21 (11%) are “managerial” oriented, because they deal
with management policies without focusing on models but instead proposing guide lines,
frameworks or similar. Finally, 43 contributions (23%) refer to both modeling and
managerial categories (Figure 3).

23%

11%
66%

Modeling Managerial Both

Figure 3. Modeling vs. Managerial contributions

Concerning the modeling papers, in 42% of cases the authors propose a new model for
spare parts inventory management, in 43% just an optimization procedure for one or
more parameters of a model and in the last 15% of cases we have comparative
evaluations among models already proposed in literature.
In the majority of cases (about 85%) models have single objective function, while only
the 16% of the contributions work on a multi objective function. In 86% of cases we find
an cost/revenue objective function (minimisation of logistics costs or maximisation of
profit), while in the other 14% of papers is adopted an objective function related to
service level (minimisation of backorders or maximisation of first time fill rate).
In 43% of cases authors do not consider any constraints, while the other 57% of
contributions show some constraints, typically related to a target service level to achieve
(82%) or to a maximum level of costs to sustain (18%), depending to the objective
function defined before.

Almost all the modeling contributions focus on the stock dimensioning problem (what and
when to reorder); in this sense the most adopted and analyzed stock-control policies are:
• the continuous review with an order-up-to level (S) in a one-for-one
replenishment mode (S-1, S); 31% of cases
• the continuous review, with fixed re-order point (s) and order-up-to level (S),
referred to as (s, S); 19% of cases
• the continuous review, with fixed reorder point (r) and fixed order quantity (Q),
referred to as (Q, r); 14% of cases
• the periodic review, with fixed ordering interval (T) and order-up-to level (R),
referred to as (T,R); 8 % of cases

Few contributions (36%) consider also the stock allocation problem, in terms of where to
place stocks along the supply chain.
Interesting to underline that just 24% of the analyzed papers show an application case
study of the proposed model, while the others propose a simulation experiment (57%) or
nothing (19%).
Indeed, few papers (about 13%) focus on the information sharing issue and its potential
impact on the stock control problem; still less (4%) consider the obsolescence
phenomena, despite it is for sure a frequent problem in practice.

6
 4. Discussion and conclusions
Although the critical review of the 191 papers in the database has not been completed at
the present time, some preliminary observations can be drawn on the descriptive findings
provided in the previous section.
First of all, spare parts inventory management is a topic that attracted, in recent years,
considerable attention by researchers from the Operations Management and Operations
Research fields. In particular, we noticed a concentration of papers in few journals (IJPE,
EJOR, JORS, Management Science, IIE Transactions and OR) which are leading the
debate on spare parts inventory management.
Since very few works provided a wide literature review on the topic (Guide and
Srivastava, 1997; Kennedy et al., 2002) and given the increase in contributions
published in the last years (we recorded more than 100 papers between the year 2000
and 2011), we believe that a research effort aimed at an updated categorization of this
research stream, as proposed in this paper, can be valuable to the scientific community,
and this will be the aim of the completion of the critical review.
One of the main point emerging is that a modelling approach dominates the publishing
activity on spare parts inventory management, in line with the OR orientation of most of
the journals cited above. This shows the interest in academia in advancing the theoretical
knowledge in this field. On the other hand, however, we find a limited number of papers
(less than one third) adopting also a managerial approach (i.e. that include a holistic
perspective on the spare parts management problem and a practitioner orientation in the
application of the proposed method). Empirical applications through case studies,
moreover, involve only 24% of the collected literature.
This may be seen as a reason contributing to the research practice-gap encountered in
the field of spare parts management, as pointed out by previous works (Wagner and
Liedermann, 2008; Boone et al., 2008; Syntetos et al., 2009). Methods presented in
research are from one side perceived as too complex by practitioners, or too costly to be
put into practice (human resources, systems); on the other hand they are sometimes
based on hypotheses that do not take into account all the complexities of a real world
setting, ending up in difficult practical applicability or poor performance (Bacchetti and
Saccani, 2011). Finally, the organizational perspective within companies is of utmost
importance when implementing inventory management systems (Zomerdijk and de
Vries, 2003), but despite that it is often neglected by inventory management literature.
Based on this comment we identify as an area for future research the extension of the
stream of investigation that focuses on aspects that help in “bridging the gap” between
research and practice, aimed towards a more widespread adoption on advanced spare
parts inventory methods in business practice.
Finally, some gaps pointed out in the previous section suggest further research
directions. The obsolescence problem, for instance, is very important in business practice
(according to Cohen et al., 2006, 23% of parts become obsolete every year) and
companies do often lack methods and tools for dealing with this issue (identification,
management and prevention of the obsolescence phenomena). Conversely, only 4% of
the contribution in our literature database address this issue, and deserves increased
attention. As a second important avenue for research, managing multi-echelon spare
parts network in which different actors are involved (parts suppliers, OEMs, distributors
and wholesalers, dealers, service shops, et cetera) poses certainly a major challenge for
excelling in either cost or service performance (or both), from a global supply chain
standpoint. The issue of information sharing among different supply chain tiers and
players, that can be the basis for improved practice or specific techniques such as Vendor
Managed Inventory or Lateral Transhipments, is also under-investigated in literature and
can be a promising area for conceptual as well as applied research.

7
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