Material shortages
A job is on the plan, but the raw material is missing. Find out whether the failure sits in planning, purchasing, stock records or the supplier's promise.
What it looks like
- The supervisor releases a job card and then discovers the required material is short.
- Stores says the item is available in Tally. The rack is empty.
- Purchase raises an urgent order after the machine has stopped.
- Material kept for one customer is quietly used for another order.
- The same fast-moving item runs out even though the owner approved its purchase last week.
Why it happens
Work is released without checking available stock. A ledger balance may include material that is reserved, damaged or at a job worker. The machine needs usable material at the right time.
The reorder trigger is too low. Average usage or supplier lead time changed. Purchase still uses the old minimum level.
Supplier dates are treated as certain. A supplier's verbal promise is entered into the plan as if the material had already arrived.
Material issues are recorded late. Stores hands out items during a rush and updates the book at day-end. The next plan uses the wrong balance.
Demand is hidden in order changes. A revised quantity is confirmed by sales but not included in the material requirement.
The often missed cause is reservation. Ten pieces on a shelf do not mean ten pieces are free for the next job.
What to check first
- Pick the last three stopped jobs. Open their job cards. Write the item, quantity needed and date needed. Compare that date with the purchase request and stock check date.
- Physically count the missing item. Compare the rack or bin with the stores register or Tally stock summary. Separate usable, damaged and reserved stock. Do not silently adjust the book.
- Read the last five supplier receipts. Note PO date, accepted delivery date and actual goods receipt date. Check whether purchasing assumed a shorter lead time than the supplier normally achieved.
You may find more than one cause. Label each shortage by its first preventable failure.
How to fix it
- Make a seven-day shortage list. Include jobs due, required materials, usable stock, reserved stock, open PO quantity and confirmed receipt dates.
- Hold release of incomplete jobs. A supervisor can plan the work, but should not send it to the machine until critical material and drawings are ready.
- Agree which jobs own scarce stock. The production and sales leads should decide openly. Mark allocations in the register.
- Set a reorder level for repeat items. Start with average daily use multiplied by supplier lead time, then add safety stock. Review it when demand or lead time changes.
- Create a purchase exception list. Show items below the trigger and POs with unconfirmed dates. Give each item an owner and next action.
- Record issues and receipts on the day. A stock figure that is updated after the shift cannot protect the next shift.
A simple shortage line is enough to start:
| Item | Needed in 7 days | Usable stock | Reserved | Confirmed receipt | Shortfall |
|---|---|---|---|---|---|
| Granule grade G, example | 600 kg | 350 kg | 100 kg | 200 kg on 25 October | 150 kg |
The shortfall assumes the expected receipt arrives on time. If the supplier has not confirmed it, treat that quantity as at risk.
A worked example
For example, a plastics unit uses 80 kg of one granule grade a day. The supplier normally takes six days. The owner chooses 160 kg of safety stock. The starting reorder level is 80 × 6 + 160 = 640 kg.
Today, the usable unreserved balance is 520 kg. This falls below the trigger. Purchase checks open orders and raises the requirement. This calculation cannot repair incorrect stock records or predict a sudden customer order. It is a starting control, not a guarantee.
How you know it is fixed
- For four weeks, count machine stoppages caused by missing materials, by item and job.
- Track jobs released without a material availability check. The expected count is zero.
- Compare planned receipt dates with actual GRN dates and note recurring shortages by cause.
When it is more serious
Repeated shortage buying at premium rates may indicate a cash problem, unreliable suppliers or unrealistic customer dates. Large stock corrections need an accounts review. Do not substitute material grades, especially for food, medical or safety-related goods, without the required technical approval. If stock records and shelves differ widely, resolve that control problem before increasing safety stock.
This works if someone does it every day. In most businesses, that someone is you.
Questions people ask
What is the first report to check for a material shortage?
Start with the item-wise stock balance and open purchase orders. Then count usable stock on the shelf.
Does a high stock balance mean we have enough material?
No. Remove damaged, allocated and unavailable stock before comparing it with upcoming jobs.
How do we set a reorder level?
Multiply average daily usage by supplier lead time in days. Add safety stock. Review when demand or delivery performance changes.
Will keeping more stock solve every shortage?
No. If issues are not recorded or jobs are released incorrectly, extra stock can hide the problem and tie up cash.