Why lead time, not price, decides your spares strategy

Procurement is generally measured on unit price, and unit price is the easiest thing about a spare part to measure. It is also, for a landlocked operation running critical plant, frequently the least important.

The arithmetic nobody runs

Take a wear component with a five thousand dollar unit price and a ten week import lead time, against an equivalent at six thousand held in Ulaanbaatar. The thousand dollar saving is real. So is the exposure: if the part fails outside a planned window, the difference between a two-day repair and a ten-week wait is measured in production, not in procurement.

Most operations know this intuitively and still buy on price, because the production cost lands in a different budget from the parts cost.

A more useful question

Rather than asking what a part costs, ask what its unavailability costs per day, and how many days of unavailability the supply route implies. For genuinely critical items the answer usually justifies local stock even at a meaningful price premium. For the long tail of non-critical items it usually does not, and holding those locally is just tied-up capital.

We work with maintenance planners to split the list on exactly that basis. The output is normally shorter than people expect — typically fifteen to thirty line items carry most of the exposure.