Energy transition delivery: Maintenance, MRO and critical spares — inventory strategies that lift asset availability
There’s a moment every operations leader recognises.
A crew is on site. The permit window is tight. The asset is isolated. Everyone’s ready to do the job — and then the work stops because a part is missing. Not exotic. Not bespoke. Just not there. Or it’s there, but the wrong revision. Or it’s in another depot three hours away. Or it’s sitting in a cage with no label because someone “borrowed it” months ago.
That’s when the energy transition becomes real.
Australia’s energy transition isn’t only about building new infrastructure. It’s about operating more complex assets, more intensively, across a more variable system. Networks, generation assets, water and energy utilities, ports, rail and critical infrastructure operators all face the same pressure: lift asset availability and reliability, while managing cost and working capital.
And the uncomfortable truth is this: Most availability pain is not caused by maintenance teams doing the wrong work. It’s caused by the supply chain around maintenance not being designed to support the work.
This is where Maintenance, Repair and Operations (MRO) and critical spares become a strategic lever — not an afterthought. Done well, they deliver “availability without tying up cash”: high service levels for maintenance crews, fewer delays, fewer emergency freight moves, and fewer write-offs — without turning your balance sheet into a parts museum.
This article is a practical playbook for Australian operators and regulated infrastructure environments. We’ll cover:
- how to design spares strategies that protect uptime
- how to segment inventory by criticality and risk (not just by dollars)
- how to align inventory with maintenance strategy (preventative, predictive, corrective)
- how to set up procurement and contracting approaches for MRO, property/FM, fleet, plant and equipment
- how to build governance that stops inventory from creeping while improving availability
We’ll also show how Trace Consultants can help — from spares strategy and warehouse design through to procurement and performance frameworks (see Procurement, Warehousing & Distribution, and Strategy & Network Design).
Why MRO and critical spares matter more in the energy transition
The energy transition changes the operating environment in three ways:
1) More assets, more interfaces, more complexity
As the grid and associated infrastructure evolves, asset fleets become more diverse: new equipment types, new OEMs, new software layers, and new dependencies. That increases the range of spares required — and makes standardisation harder.
2) Reliability expectations don’t drop
Customers still expect power, water, transport and services to be there when they need them. Reliability targets don’t “make room” for transformation.
3) Supply chains are tighter and more volatile
Long lead times, constrained OEM capacity, freight disruption and labour availability all influence the risk of not having the right part at the right time.
So the classic approach — “keep inventory low, expedite when needed” — becomes expensive quickly. You’ll pay in:
- unplanned downtime and customer impact
- overtime and rework
- emergency freight and premium supplier pricing
- cannibalisation (robbing parts from one asset to keep another running)
- safety risk (rushed jobs, substitute parts, improvised handling)
The goal is to engineer a spares and MRO supply chain that is proportionate to the risk.
The core principle: availability without tying up cash
It’s easy to say “we need more spares”. It’s also easy to say “inventory is too high”.
Both can be true at the same time.
The answer isn’t simply “increase” or “decrease” inventory. It’s to change the shape of inventory:
- Put investment into the right critical parts, with the right service levels.
- Strip out dead stock, duplicates, obsolete variants and unmanaged “just in case” purchases.
- Improve visibility and discipline so you can hold less safety stock for the same availability.
- Use smarter contracting and supplier models so you don’t have to own every buffer.
This is what good looks like: high availability and lower total cost-to-serve.
Step 1: Align spares strategy to maintenance strategy
Spares strategy only makes sense when you understand the maintenance model.
Preventative maintenance (PM)
PM creates predictable demand. Spares can be planned, kitted, and staged. This is where inventory discipline delivers big savings: fewer expedites, fewer urgent buys, better scheduling.
Predictive / condition-based maintenance (CBM)
CBM creates “forecastable uncertainty”. You have early signals, but exact timing varies. Here, you need a mix of:
- service-level policies for critical components
- flexible supply options (vendor stocking, rapid replenishment agreements)
- visibility into asset condition and parts usage
Corrective maintenance (break-fix)
Corrective work drives the highest need for critical spares — but also creates the biggest temptation to overstock. A disciplined criticality model is the antidote: stock only what protects safety and reliability, and use supply contracts for the rest.
Capital works / outages
Outages and major works change the demand profile entirely. The best operators treat outage spares as a separate stream: planned procurement, kitting, staging, and returns management.
Step 2: Segment inventory properly — criticality beats ABC
Most organisations use ABC segmentation (A = high value, C = low value). It’s useful for counting effort, but it’s a weak proxy for operational risk.
A low-cost part can shut down a multi-million-dollar asset.
A better approach is criticality-based segmentation, using factors like:
- safety risk if the part fails
- asset availability impact (downtime cost, customer impact)
- lead time and supply risk (single source, OEM constraints)
- substitution options (can you use an alternative?)
- detectability (can you predict failure before it happens?)
- commonality across fleet (shared parts vs unique parts)
A practical segmentation model (simple enough to run)
Tier 1: Critical spares (availability protectors)
- Stock policy with high service levels
- Tight governance, high accuracy, controlled access
Tier 2: Important / constrained spares (risk-managed buffers)
- Stock policy based on lead time and failure probability
- Supplier agreements to reduce ownership burden
Tier 3: Routine consumables (flow efficiency)
- Min/max or two-bin replenishment
- Bulk buy discipline, standardisation
Tier 4: Non-stock / buy-to-order
- Clear sourcing pathway
- Frame agreements for speed
Tier 5: Obsolete / surplus
- Active disposal / redeployment plan
This segmentation gives you something powerful: the ability to invest where it matters and cut where it doesn’t.
Step 3: Design service levels that reflect real risk
Service levels for maintenance inventory should not be “one size fits all”.
For Tier 1 critical spares, you might target near-perfect availability. For Tier 3 consumables, a lower service level may be acceptable if replenishment is quick and alternatives exist.
The key is to make service levels explicit and defensible, using:
- downtime cost and reliability impact
- lead times and supply variability
- historical usage (where data is reliable)
- asset criticality and customer impact
- maintenance strategy (PM vs corrective)
Then translate service levels into inventory policy:
- safety stock
- reorder points
- min/max
- replenishment frequency
- stocking locations (central vs regional depots)
This is where you stop guessing and start managing.
Step 4: Fix the quiet killers — master data, visibility, and stores discipline
You can’t optimise inventory if your data is messy.
Common issues in MRO environments:
- duplicate part numbers for the same item
- inconsistent naming conventions
- missing or incorrect unit of measure
- no link between asset BOMs and store catalogues
- uncontrolled “free text” purchasing
- no standard for revisions or compatibility
- inaccurate on-hand balances because of poor issuing processes
Practical fixes that move the needle
Catalogue governance
Lock down item creation rules. Standardise naming. Clean duplicates. Control substitutions.
BOM linkage
Ensure assets have BOMs that connect to stocked parts — not just PDF manuals.
Transaction discipline
No issue without a work order. No “borrow and return” without scanning. No receipts without verification.
Cycle counting
Not once a year. Continuous. Focus on critical spares first.
Visibility dashboards
Stockouts, aged inventory, critical spares accuracy, emergency buys, expedite spend — visible weekly.
This is where a lot of “availability without cash” comes from: you reduce the need for buffers by improving trust in inventory.
If your stores and warehouse network needs redesign to support discipline, see Warehousing & Distribution and Technology.
Step 5: Optimise the stores network — right part, right place
Even with perfect inventory policy, availability suffers when inventory is in the wrong place.
Many operators inherit stores networks that grew organically:
- depots where land was available
- stores attached to legacy assets
- “temporary” cages that became permanent
- duplicate holdings because teams don’t trust transfers
A better approach is to design a stores network that matches:
- maintenance footprint and travel times
- asset criticality by region
- outage schedules
- transport and courier reliability
- labour availability and after-hours access needs
Typical network models
Central store + regional depots
Central store holds constrained/slow-moving but critical items. Regional depots hold fast movers and planned maintenance kits.
Hub-and-spoke with mobile replenishment
For distributed asset fleets, hubs feed smaller depots and field vehicles.
Vendor-managed inventory (VMI) for consumables
Suppliers hold and replenish consumables, reducing operator working capital.
Project/outage staging locations
Separate staging stores for outages to avoid contaminating BAU stock.
There’s no universal answer — but there is a universal principle: inventory location is part of your availability model.
Step 6: Procurement strategy for MRO that protects uptime and value
MRO procurement is often treated as “just buy what the site needs”. That’s how costs creep, and how risk hides in the long grass.
A strong MRO procurement strategy typically covers:
1) Category strategy by spend and risk
Break MRO into categories that behave differently:
- OEM parts and service agreements
- electrical and instrumentation parts
- mechanical parts and consumables
- lubricants and chemicals
- tools and test equipment
- fleet parts and maintenance services
- property/FM services (cleaning, security, waste, MEP maintenance)
- plant and equipment hire
- calibration, inspection and compliance services
Then set category-specific strategies:
- competition vs direct OEM
- standardisation opportunities
- bundling vs local sourcing
- performance contracting
- safety/compliance requirements
- sustainability and responsible sourcing expectations
See Trace’s approach on Procurement.
2) Contracting approaches that reduce total cost (not just unit price)
Framework agreements
For repeatable purchasing with pre-agreed rates, service levels, and ordering pathways.
Performance-based contracts
For services like FM, fleet maintenance or inspections, where outcomes (uptime, response times, first-time fix) matter more than hours billed.
Supplier consolidation (carefully)
Consolidation can unlock leverage — but avoid over-dependency in critical categories. Maintain dual sourcing where risk is high.
VMI / consignment stock
For consumables and some critical categories, shift ownership and replenishment burden where the market supports it.
Indexation and escalation discipline
Where indexation is unavoidable, define transparent triggers and controls.
3) Governance that stops emergency buying becoming normal
Emergency buying is a symptom:
- inventory policy gaps
- stores discipline gaps
- poor planning integration
- weak supplier response capability
Track emergency buys as a KPI. Do root-cause reviews. Fix the system.
Step 7: Property/FM, fleet, plant & equipment — the hidden MRO spend pools
Energy transition delivery and operations often carry large spend in “adjacent” categories that sit outside the stores catalogue but materially impact availability and cost:
Property and Facilities Management (FM)
- cleaning and waste
- security
- mechanical/electrical/plumbing maintenance
- grounds and vegetation
- compliance inspections
- minor works
These categories often suffer from:
- unclear scopes
- inconsistent site-by-site contracting
- weak performance regimes
- poor variation control
A structured scope review and contracting refresh can reduce cost while improving service reliability — without needing dramatic changes on-site.
Fleet
Fleet availability is operational availability for many operators. Fleet maintenance contracts, parts strategies, and replacement cycles all influence service delivery.
Plant and equipment
Tooling, test equipment, calibration regimes, hire fleets, and specialist equipment often sit across multiple budgets. Consolidating and standardising can reduce waste and improve readiness.
Step 8: Designing governance that maintenance teams won’t hate
The best spares governance feels invisible when it’s working:
- parts are available when needed
- ordering is fast
- approvals are proportionate
- the catalogue is trusted
- stores are accurate
Governance should be designed around frontline realities:
- clear roles (maintenance planner, stores, procurement, engineering authority)
- a simple exception pathway (what happens when an urgent need arises?)
- standard work for kitting, staging, issuing, returns
- performance reporting that drives action, not blame
Metrics that matter (and the ones to stop obsessing over)
Metrics worth tracking weekly
- Stockout rate for Tier 1 critical spares
- Critical spares inventory accuracy
- Emergency buys / expedites (count and value)
- Aged and obsolete inventory value (% of total)
- Fill rate by store location
- Returns processing cycle time
- Supplier OTIF for key categories
- First-time fix rate (where parts availability is a factor)
Metrics to handle carefully
- Inventory value alone (it’s a lag indicator)
- ABC compliance alone (doesn’t capture criticality)
- Price variance alone (can hide total cost impacts)
The point is to connect the numbers to availability outcomes.
How Trace Consultants can help
Trace supports Australian energy and infrastructure operators to lift asset availability by engineering the maintenance supply chain — spares, stores, procurement, contracting, and governance — without tying up cash.
Here’s how we typically support clients:
1) Critical spares and inventory strategy
- Criticality modelling and segmentation
- Service level design and inventory policy (min/max, reorder points, safety stock)
- Obsolescence and surplus reduction programs
- Stores network and stocking location strategy (central vs regional depots)
2) Stores and warehouse design for maintenance environments
- Stores layout and workflow redesign (receiving, issuing, kitting, returns)
- Inventory accuracy uplift programs (cycle counts, scanning discipline, governance)
- Asset tracking and visibility improvements
See Warehousing & Distribution.
3) MRO procurement and contracting strategy
- Category strategies for MRO, FM, fleet, plant and equipment
- Framework and performance-based contracting models
- Supplier performance regimes and governance cadence
- Risk controls to avoid over-dependency
Explore Procurement.
4) Technology enablement (pragmatic, fit-for-purpose)
- Catalogue and master data governance
- Inventory system / CMMS integration requirements
- Reporting dashboards that drive action
See Technology.
5) Program delivery and change
- PMO support, stakeholder alignment, training and adoption
- Benefits tracking and value realisation
See Project & Change Management.
If you’re at the stage of reviewing the broader operating model, network and supply chain strategy that sits around your asset base, we can also support scenario planning and location strategy via Strategy & Network Design.
To discuss a spares strategy or MRO procurement program, reach out via Contact.
The real question: do your parts support your uptime promise?
If you’re delivering energy transition assets — or trying to keep legacy infrastructure reliable while new assets come online — your maintenance supply chain is one of the highest-leverage places to focus.
Because the best maintenance teams in Australia can’t fix what they can’t get.
And the operators who win the next decade will be the ones who design availability into their inventory and procurement systems — without letting cash and complexity spiral.
If you’d like to pressure-test your current spares strategy, procurement model, or stores network, Trace can help. Start with Procurement or contact us via Contact.
