‘Let me remind you that eight months ago you instructed me
to reduce materials costs. I am doing this by taking advantage of the discounts
given by suppliers for larger orders. Often I order more than requested under the
assumption that we will need the material at some stage, so I get a discount and the
material is already in stock when we need it. Sometimes keeping things in stock
would take too much space or be too expensive, so then I might delay an order until
I can combine it with others to get bigger discounts.’
Johann saw that some stocks were drifting upwards because purchasing were
buying large quantities of some materials. At the same time, they were delaying
some purchases, and this produced the shortages. The purchasing manager
explained to Johann,