How Hub-and-Spoke Inventory Sharing Cuts MRO Costs Across Sites – Without Risking Downtime
Manufacturers with sprawling operations are quietly losing millions in MRO inventory waste.
Here’s why: each site hoards spare parts in isolation, driven by fear of downtime and the lack of visibility into what other plants have. What results is bloated inventory, duplicated parts, and 8-figure write-offs that surface every few years like clockwork.
But there’s a better way.
In this guide, we’ll unpack how a hub-and-spoke inventory model unlocks working capital, avoids risk, and finally delivers the visibility MRO leaders need – without a ground-up overhaul of your ERP systems.
Why Traditional MRO Inventory Strategies Fail Multi-Site Manufacturers
Too many manufacturers still operate like this:
- Each plant stocks its own parts, with limited coordination
- ERP systems are fragmented, outdated, or inconsistent
- Procurement, operations, and finance run on separate KPIs
The result? Plants overstock out of fear. Inventory policies vary wildly. And critical parts still go missing.
What’s worse, these problems get amplified as companies grow through M&A, inheriting different ERPs, naming conventions, and inventory strategies across sites.
The Hidden Cost of MRO Siloes
Let’s break down the real-world cost of siloed inventory:
- Excess inventory: Each site carries 15-25% more than needed
- Stockouts: Despite overstocking, critical parts still run out due to poor visibility
- Duplication: The same part gets bought and stored under different SKUs
- Capital waste: Every $1M in idle MRO inventory costs $200K/year in carrying costs
All of this erodes working capital, ties up procurement resources, and exposes plants to unplanned downtime.
What Is a Hub-and-Spoke Inventory Model?
In a hub-and-spoke model, inventory is treated as a networked asset, not a site-level liability. Instead of managing each plant as an island, a central hub coordinates stocking, sharing, and sourcing decisions across all facilities.
Key principles:
- Shared visibility: One unified view of MRO materials across all sites
- Policy alignment: Min/Max levels are optimized based on network risk, not just local fear
- Parts sharing: Sites can source parts from each other before buying new stock
- Centralized decisioning: A small expert team manages inventory strategies across the enterprise
This approach transforms inventory from reactive and redundant to proactive and efficient.
The Operational Benefits of Hub-and-Spoke Inventory Sharing
When implemented correctly, this strategy delivers:
1. Lower Inventory Costs Without Uptime Risk
By reducing duplication and pooling inventory, organizations free up working capital while maintaining – or even improving – part availability.
If your current system has 20% redundancy, that’s $20M in unnecessary stock for every $100M in MRO.
2. Faster Repairs via Internal Transfers
Instead of waiting weeks for suppliers, sites can fulfill critical part needs from other locations. This cuts repair lead times and reduces unplanned downtime.
3. Leaner Procurement Teams, Stronger Governance
Centralizing inventory decisioning eliminates hundreds of redundant buyers or planners working in siloes. The result is leaner, more aligned procurement operations.
4. No Need to Clean Every Data Field
AI-driven systems can unify inventory views without first cleansing 100% of legacy data – accelerating time to value and reducing implementation burden.
Case Study: $1B in MRO Inventory, $55M in Optimization Opportunities
A Fortune 500 pulp & paper manufacturer, operating across 110 U.S. sites and running four disparate ERP systems, faced exactly these challenges.
With over $1 billion in MRO inventory and a history of $100M in write-offs over 10 years, they knew their site-by-site model was unsustainable. Each business unit operated independently, using different data, policies, and systems.
Enter Verusen’s AI-Powered Network Inventory Optimization
Instead of starting with a costly data cleanup project, the company used Verusen’s platform to create a unified inventory view across all business units.
Key actions:
- Shifted all inventory decision-making to a centralized team of just 7 experts (down from hundreds)
- Enabled parts sharing across all 110 sites
- Applied AI-driven Min/Max optimization across the network
- Unified procurement, supply chain, and finance under one data layer
The Results
- $55M in identified optimization opportunities
- $26M in verified savings to date
- $10M saved directly from parts sharing
- 2,900 materials flagged for stockout risk – proactively addressed
- 6,600 hours saved via centralized decisioning
Most importantly, they improved material availability and avoided risk while unlocking massive capital efficiency.
Ready to explore whether hub-and-spoke sharing could work in your MRO network?
Book a strategy call with Verusen to get started.
FAQ: What MRO Leaders Ask Before Moving to Network Inventory
How do we start if our data is messy and inconsistent?
You don’t need a 12-month data cleanse. Verusen’s AI reads across inconsistent systems and structures, creating a unified view without changing your ERP.
Will it work with our ERP systems like SAP, Oracle, or Maximo?
Yes. Verusen integrates with major ERP/EAM platforms and can handle multiple instances across sites. No rip-and-replace needed.
How long until we see results?
Most customers identify opportunities in weeks and see verified savings within 90 days. Full transformation occurs in under a year.
What if we’ve tried standardization efforts before and failed?
This isn’t about forcing every plant to match. It’s about overlaying AI to unify what you already have and drive smarter decisions from day one.
Final Thoughts: Why This Strategy Works Now
Inventory sharing across sites used to be a pipe dream. Too much dirty data. Too many systems. Not enough coordination.
But with AI-powered network optimization, that vision is now operational – and profitable.
If your MRO inventory is scattered, siloed, or simply too big, now is the time to take action.
Learn how to identify 10-20% inventory savings without adding risk. Talk to an MRO Inventory Expert.