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Think of inventory as both shield and sword in your operations. Without critical spare parts, breakdowns stretch into long downtimes. But with too much stock, your inventory morphs into a silent cost center — tying down capital, gathering dust, and draining budgets.
The problem? These costs rarely appear in obvious ways. They don’t show up as direct losses like machine downtime or warranty penalties. Instead, they lurk in excess warehouse space, obsolete items, and poorly managed safety stock. Over time, they silently erode profitability.
This is where Key Performance Indicators (KPIs) come in. Just as doctors decode vital signs to spot hidden illnesses, plant heads and maintenance managers can track KPIs to reveal concealed carrying costs. And once visible, those costs can be tackled head-on, improving both financial health and operational resilience.
Carrying costs are often summarized as “the cost of holding inventory,” but in practice, they are multifaceted. On average, organizations spend 20–30% of inventory value annually on these costs.The Four Major Components:
A critical KPI, inventory turnover shows how efficiently parts move in and out of storage. When turnover is low, it signals that items are being overstocked or are rarely used, leading to hidden costs like excess storage, tied-up capital, and potential obsolescence. For maintenance teams, this ratio highlights whether spares are aligned with actual usage or just sitting idle, consuming resources without offering real value.
Consistently tracking turnover trends helps organizations identify parts that can be rationalized, replaced with vendor-managed policies, or removed altogether. CMMS software like Cryotos strengthens this KPI by combining usage history with work order data, ensuring inventory levels match maintenance demand cycles and reducing financial drain caused by underutilized stock.
DIO calculates the average time it takes for inventory to be consumed. High DIO values point to items sitting idle for too long, inflating storage, insurance, and risk costs without delivering operational support. In fast-moving industries, an inflated DIO is an early warning sign of slow-moving spares that tie up liquidity and crowd warehouses.
For maintenance operations, reducing DIO ensures reliable cash flow and healthier supply chains. With CMMS integration, teams can spot which items stay beyond their useful cycle and adjust reorder strategies. This reduces unnecessary accumulation of parts and empowers plants to maintain readiness without overshooting optimal stock levels.
This KPI offers a holistic view of how much it costs annually to hold inventory. By comparing carrying expenses like storage, insurance, and capital costs against total inventory value, organizations gain a measurable picture of efficiency. A rising carrying cost percentage indicates hidden inefficiencies that are often overlooked during routine procurement or maintenance planning.
Monitoring this KPI helps leaders justify inventory optimization initiatives and budget tightening. Solutions like Cryotos CMMS bring additional value by automatically integrating data across procurement, inventory, and maintenance modules, giving decision-makers a real-time picture of how efficiently resources are being managed and where waste can be reduced.
The stockout rate measures how often parts are unavailable when needed. While some might see stockouts as separate from carrying costs, they pose hidden expenses: unplanned expedited orders, premium pricing, and downtime costing thousands per hour. Frequent stockouts reveal poor balance between inventory planning and actual maintenance needs.
Tracking stockout rate through a CMMS gives organizations actionable intelligence. Instead of rushing into last-minute purchases, maintenance managers can set better reorder levels, guided by realistic usage patterns. This transforms the balance between available inventory and operational continuity, eliminating financial strain caused by both excess carrying costs and urgent procurement actions.
Obsolete inventory creeps into storerooms quietly but powerfully erodes budgets. These are parts that no longer serve active equipment, remain unused for extended periods, or have been replaced by upgraded technologies. Such stock contributes nothing to uptime but incurs storage, insurance, and capital costs month after month.
By monitoring this KPI, organizations can quickly decide whether to liquidate, return, or responsibly dispose of redundant items. A CMMS like Cryotos flags these items using non-movement reports, ensuring warehouses focus on active, high-value inventory. This improves productivity, saves space, and prevents financial resources from being wasted in maintaining “dead stock.”
RTV rate indicates inefficiencies in procurement or supplier performance. High RTV numbers often result from inaccurate demand forecasting, duplicate purchases, or vendor quality issues. While visible as returns, hidden costs emerge in the form of administrative overhead, shipping expenses, and wasted time waiting for replacements.
By incorporating RTV tracking into central reporting, plant leaders can uncover root causes and address them through stronger vendor collaboration, better forecasting, or enhanced approval workflows. Cryotos CMMS provides visibility into purchase history and patterns, helping managers cut down RTV-related costs and sharpen overall inventory efficiency.
The fill rate measures how often maintenance requests are fulfilled directly from existing stock. While high fill rates indicate inventory adequacy, maintaining them disproportionately high often means overstocking, which raises carrying costs. On the other hand, poor fill rates signal a risk of stockouts and emergency purchases.
The key lies in balance—achieving a fill rate that secures uptime without bloating stocks. Cryotos CMMS helps organizations by forecasting based on past consumption trends and actual work order frequencies. This ensures plant heads strike the sweet spot: inventory that is lean, cost-efficient, and always aligned with real maintenance needs.
Cryotos CMMS delivers over 50+ out-of-the-box reports including:
Bi-directional ERP integrations ensure purchasing links seamlessly with inventory demand.
Integrating KPI monitoring into the maintenance workflow ensures that inventory and cost management become part of everyday operations rather than a periodic review. By aligning KPIs with routine maintenance activities like preventive scheduling, spare parts planning, and work order execution, teams gain clear visibility into stock efficiency and cost drivers. For example, when carrying cost percentage or inventory turnover trends are reviewed during monthly planning meetings, leaders can proactively decide whether to adjust reorder levels, retire obsolete stock, or renegotiate supplier terms.
Equally important is defining ownership for each KPI. Maintenance teams can track stockout rates and obsolete inventory, while finance focuses on carrying costs and procurement manages vendor inefficiencies. With Cryotos CMMS, these roles integrate seamlessly into one dashboard, making data available in real-time. KPI insights can be directly linked to preventive maintenance cycles, ensuring parts are ordered on time and not stockpiled unnecessarily. This approach builds accountability, supports smarter decision-making, and embeds cost-saving practices into the daily rhythm of maintenance operations.
Inventory control is not just about “having enough parts.” It’s about having the right parts, in the right quantities, at the right time. What threatens this balance are the hidden inventory carrying costs eating away silently.
The KPIs—Inventory Turnover, DIO, Carrying Cost %, Stockout Rate, Obsolete Percentage, RTV Rate, Fill Rate, and Safety Stock Variance—act as diagnostic tests to uncover and correct inefficiencies.
By embedding KPI monitoring into daily workflows through Cryotos CMMS, maintenance leaders gain end-to-end visibility, automated alerts, ERP integration, and predictive decision support. The outcome? Reduced costs, improved uptime, freed capital, and a leaner, smarter operation aligned with Industry 4.0 practices.
