Riskspare Tool

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Using risk to manage assets is a key principle of asset management. The same also applies to how an organisation manages its critical spare inventories.

We have developed a simple risk based AM tool to help with this.

The prime reason for holding spares is the cost of being caught without a spare when it is needed. And yet, in 95% of all spares holding decisions this cost is not considered.

The factors that need to be taken into account to calculate spares holding are:

  • The cost of being caught without a spare, and needing it.
  • The cost of the spare.
  • The number of machines (or assets) in use.
  • How often we are likely to need the spare.
  • The cost of money tied up in purchasing and holding the spare.
  • How long it takes to get a spare – the ‘leadtime’.
  • How much longer we intend to keep this plant in operation.

If some of the failures are repairable:

  • What proportions are repairable.
  • How long it takes to repair.

One other factor often arises – can a premium be paid to get spares delivered more quickly.

In this situation there are two more factors:

  • How much quicker.
  • How much more it costs.

The above eleven factors probably cover more than 90% of all spares requirements.

Our Riskspare™ analysis tool will use these inputs to help arrive at financial decision on whether you need to hold spares and if so what is the optimum amount required.