Inventory Turnover Ratio
In ServiceGrid CMMS and asset reliability, the Inventory Turnover Ratio (specifically MRO Inventory Turnover) measures how many times maintenance spare parts stock is consumed and replenished annually, calculated as Total Value of Parts Issued (MRO Parts Used) ÷ Average Inventory Value.
In shop floor maintenance, this ratio is extracted from closed work orders over 12 months, excluding capital spares to gauge consumable efficiency. Average Inventory Value is (Beginning Inventory + Ending Inventory) ÷ 2. Benchmarking against 3–6 turns/year indicates efficient manufacturing; <1.0 signals overstocking or obsolete parts, while >4.0 risks stockouts and downtime. CMMS dashboards track trends and identify dead stock tying up working capital.
Why not use COGS (Cost of Goods Sold)?
MRO inventories are not sold; Parts Issued or Parts Used replaces COGS as the consumption metric.
How does turnover relate to OEE?
Stock turns are the OEE of spares management, measuring effective use of spare parts investment analogous to production capacity.
What turnover indicates a critical risk?
A ratio >4.0 in maintenance often signals insufficient buffer stock for critical parts, increasing downtime risk during failures.
Should capital spares be included?
No; exclude them to isolate true efficiency of consumables and prevent dilution of the ratio.