The Spare Parts Balancing Act: Why Availability, Working Capital, and Storage Capacity Are Becoming Impossible to Manage

Across Europe’s industrial manufacturing landscape, spare parts leaders are facing a growing-and often unsustainable-balancing act. Whether in automotive, construction machinery, MedTech, rail, or heavy industrial equipment, the pressure to maintain high availability while controlling working capital and storage capacity has never been more acute. Interviews with leaders from organisations such as Iveco, BDR Thermea Group, Ariston Thermo Group, Fastems, Husqvarna Construction, ArcelorMittal, and Bobst reveal the same escalating challenge: the traditional methods and systems used to manage spare parts are no longer fit for purpose.

At the heart of the problem is obsolescence. Many suppliers simply stop producing older components, leaving OEMs with a difficult choice-stock up and tie working capital into slow-moving parts, or risk shortages that could halt customer operations. As equipment life cycles extend to 20–30 years across many industries, this risk expands exponentially. Companies often overcompensate, resulting in excess stock that consumes warehouse space and inflates carrying costs, or they find themselves with critical gaps that undermine service levels.

Compounding the issue is the relentless rise in SKU counts. New product generations, electrification of vehicles and machinery, custom configurations, and the long tail of legacy models have dramatically expanded parts portfolios. Some manufacturers now manage hundreds of thousands of SKUs, each with distinct demand patterns, lead times, and failure behaviours. As documented in the research, forecasting for spare parts is significantly more complex than for finished goods, making it increasingly difficult to determine what to stock, in what quantity, and where.

This SKU explosion places enormous pressure on warehouse capacity. Leaders from Iveco, NORS, Cavotec, and Fastems noted that even modest increases in parts proliferation translate into significant space and cost burdens. Rising land and energy prices across Europe further magnify the challenge. And with customers expecting rapid, often next-day delivery-even for niche components-OEMs feel compelled to hold more inventory across more nodes in the network. The result: ballooning storage costs, reduced efficiency, and tightening cashflow.

Solution providers are responding. Vendors such as Syncron, Logility, Blue Yonder, Baxter Planning, Kinaxis, ToolsGroup, o9 Solutions, and IBM Planning Analytics are developing more advanced forecasting, inventory optimisation, and obsolescence-management tools specifically tailored to the spare-parts environment. Their solutions increasingly incorporate:

• AI- and ML-driven demand sensing to better manage erratic, long-tail demand
• Predictive maintenance integration, allowing forecasts to reflect actual asset health
• Multi-echelon inventory optimisation, balancing availability and cost across global networks
• Automated lifecycle and obsolescence planning, helping OEMs rationalise stock and reduce waste

Logistics providers-such as Time:matters, TVS Supply Chain Solutions, Katoen Natie, Broekman Logistics, DHL, and Carousel Logistics-are similarly innovating to support manufacturers struggling with space and service-level pressures.

Manufacturers are clear: the combination of rising SKU volumes, storage constraints, and working-capital pressure is no longer sustainable. But with advanced planning technologies maturing and providers sharpening their spare-parts-specific offerings, the next two years could mark a turning point. Those who modernise now will not only protect service continuity-they will free up cash, simplify operations, and build more resilient aftermarket businesses for the decade ahead.

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