How to Decide What Parts to
Stock (and What Not To)
A demand-based approach to stocking your
parts department
Most parts departments don’t have an inventory problem. They have a decision problem. Some parts sit for a year with no movement, while technicians and customers wait on common items that should already be on the shelf. Strong operations fix this the same way: they stop stocking based on habit and memory, and start stocking based on demand.
Two questions decide what’s on your shelf: which parts belong there, and how many of each to carry. This guide answers both, using numbers your own system already holds.
The rule: stock what moves
If you move five or more of a part in a year, keep it in stock. If you don’t, order it as needed. Your own history already shows which parts clear that line, as long as you count counter sales and shop use together.
Critical parts
These are the parts that shut down a customer’s equipment when they’re unavailable: hydraulic hoses and couplers, starters, water pumps, ignition switches, voltage regulators. Because they can grind a customer’s entire operation to a halt, you either need to keep them on the shelf or have a confirmed supplier lead time.
Consumables
Filters, belts, blades, and the wear items tied to service intervals. These move constantly across every machine you service, and no technician should be standing still waiting on one. Stock them by movement and set a reorder point so the shelf refills before it empties.
Everything else
Parts you rarely sell or install tie up space and cash. Order these as needed and keep the money working somewhere else.
How to build a stock list
Everything you need is in your parts history.
- Pull twelve months of movement by part number. Count counter sales and shop use together. Both are demand.
- Rank the parts by total quantity moved. Anything at five or more goes on the stock list. The list is usually shorter than expected.
- Set quantities with the Rule of Four. The next section lays out the math.
- Flag dead stock. Review anything with no movement in twelve months: return it, sell it, or write it down.
- Write down the plan for each critical part. Where it comes from and how long it takes to get. If no one knows, that’s the first thing to fix.
Review the list quarterly. After the first pass, it mostly maintains itself.
Set your quantities: the Rule of Four
The stock list tells you which parts belong on the shelf. The Rule of Four tells you how many of each to carry and when to reorder. Run it part number by part number.
Step 1: Find annual movement
Annual movement is the total quantity of a part number that left your inventory over the previous twelve months — counter sales plus shop use. If 60 of one filter went out the door last year, your annual movement is 60.
Step 2: Calculate the recommended stocking level
Recommended Stocking Level = Annual Usage ÷ 4
Round up to the next whole number. With annual movement of 60: 60 ÷ 4 = 15. The recommended stocking level is 15. That works out to roughly three months of demand based on your own history.
Step 3: Set safety stock, which is your reorder point
Safety Stock = Recommended Stocking Level ÷ 4
Two thresholds apply:
- If the calculated safety stock is 0.49 or less, treat the part as non-stock. Order it when the job calls for it.
- If the calculated safety stock is 0.50 or greater, stock it, with a minimum of one. Round any qualifying result up to the next whole number.
Step 4: Count what’s on the shelf and close the gap
The count doesn’t change the targets. It tells you how much to order to reach them.
- Annual movement: 60
- Recommended stocking level: 60 ÷ 4 = 15
- Safety stock: 15 ÷ 4 = 3.75, rounded up to 4
- Currently on hand: 6
- Quantity to order: 9
When available inventory drops below four, that’s your signal to reorder.
Set your quantities: the Rule of Four
| Annual Movement | Recommended Stocking Level | Safety-Stock Calculation | Final Safety Stock |
|---|---|---|---|
| 4 | 1 | 0.25 | 0 |
| 5 | 2 | 0.50 | 1 |
| 10 | 3 | 0.75 | 1 |
| 24 | 6 | 1.50 | 2 |
| 60 | 15 | 3.75 | 4 |
| 120 | 30 | 7.50 | 8 |
| 200 | 50 | 12.50 | 13 |
This table will get you in the right range. The final call on any part can also depend on its cost, supplier lead time, how critical the machine is, seasonal demand, and the mix of equipment your customers actually run. A low-cost part that can park a customer’s machine may deserve shelf space even if it rarely moves.
What changes when you implement this process
When you build an effective stock list, your technicians stop waiting on common parts, which improves first-time fix rates and shortens repair turnaround. Emergency purchases and rush freight become rare. And less cash sits in parts that never move. The goal isn’t less inventory, it’s the right inventory.
How STX Garage fits in
When your customers keep their equipment in STX Garage, you can see what their machines need and which services are coming due. That enables you to stock parts ahead of the work instead of ordering them after the machine arrives. The result is faster repair times and happier customers.
Share the math with your customers
The same rule works on the customer’s side of the counter. An owner who sets stocking levels on their own shelf stops calling you for emergency freight on ordinary repair items, and the usage report you already have is the thing that gets them started. Send them the owner’s version and offer to pull their twelve month history.