What Is a Good Inventory Turnover Ratio?

A good inventory turnover ratio for Maintenance, Repair, and Operations (MRO) typically falls between 2.0 and 4.0 annually, though this varies significantly based on industry criticality and supply chain stability. This metric measures how many times a facility's inventory is used and replaced over a specific period, calculated by dividing the cost of goods sold (or parts issued) by the average inventory value.

The MRO Paradox: Efficiency vs. Resilience

In a traditional retail environment, a high inventory turnover ratio is almost always desirable because it indicates rapid sales and minimal wasted capital. However, in the 2026 industrial landscape, maintenance managers must navigate the "MRO Paradox." A turnover ratio that is "too high" (e.g., above 6.0 or 8.0) often signals a dangerously lean inventory strategy. While this looks excellent on a financial balance sheet, it frequently results in a high stockout rate, where the absence of a single critical spare can lead to catastrophic downtime costs that far outweigh any savings in carrying cost of inventory.

Conversely, a ratio below 1.0 suggests that the facility is holding "dead stock" or obsolete inventory. This ties up working capital and occupies valuable warehouse space. The goal of a modern maintenance department is not to maximize turnover, but to optimize it for operational resilience. This involves a tiered approach where fast-moving consumables (like filters or lubricants) have high turnover, while critical spares (like custom gearboxes or specialized sensors) may have a turnover ratio near zero but remain essential for risk mitigation.

Benchmarking with ABC Analysis

To determine if your ratio is "good," industrial leaders utilize ABC Analysis (Always Better Control). This categorizes inventory into three groups:

• A-Items: High-value parts with low frequency of use (Lower turnover).
• B-Items: Moderate value and frequency.
• C-Items: Low-value, high-volume consumables (Higher turnover).

By segmenting the inventory, managers can apply different Economic Order Quantity (EOQ) models to each group. A "good" overall ratio is the weighted average of these categories that maintains a high service level while minimizing waste. According to the National Institute of Standards and Technology (NIST), integrating supply chain data with maintenance schedules is vital for maintaining these balances in volatile markets.

The Role of Lead Time and Criticality

In 2026, lead time variability has become a primary driver of what constitutes a healthy ratio. If a critical component has a six-month lead time, holding more safety stock—and thus lowering your turnover ratio—is a strategic decision for resilience. Effective work order management ensures that parts are issued precisely when needed, preventing artificial spikes in turnover data and providing a clearer picture of actual inventory health.

Learn More

To optimize your facility's inventory performance and balance turnover with uptime, explore these in-depth resources:

• Implement advanced inventory management features to track turnover in real-time.
• Integrate your stores with CMMS software to automate reorder points based on usage.
• Enhance your asset management strategy to better identify which critical spares require higher stock levels.
• Streamline your work order software to ensure accurate parts-to-work-order tracking and reduce data lag.

Related Terms

Carrying Cost of Inventory

The total cost of holding goods in stock, including warehousing, insurance, taxes, and the opportunity cost of capital. High carrying costs are the primary motivation for increasing inventory turnover.

Critical Spares Strategy

A risk-based approach to inventory where parts that are essential for safety or production are stocked regardless of their turnover ratio, ensuring that high-impact failures can be addressed immediately.