1. Lack of integrated system approach – different functional managers tends to look at materials related decisions from their own narrow segmented sub system view point. For instance, production manager may want to minimize stock out while finance manager may like to minimize inventories. Many material management problems may be due to designers prescribing costlier material with too much variety and non standard dimensions.

 

S.O.S. – Surplus Obsolete and Scrap material. Every time handling is not good, it may affect the cost.

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Long retrieval – Poor storage functions as lot of items deal in Storage that is location problem due to unable to locate the item. There is no standard code cut down waiting for improving   the system.

 

  1. In decision making related to materials, ignoring invisible (hidden) cost in preference to visible costs.
  2. Uncertain supply / demand environment. Just in case environment. Source of uncertainty could be demand lead time, inflation, non availability, quality problems etc. just in case environment a dependable source of supply can be a great asset to Materials Management function.
  3. Lack of scientific decision making – Using models of inventory planning and control.
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