Instabilities in granular material usually initiate at the microscale due to the presence of internal heterogeneity arising from variation in the particle packing arrangement. The present work elucidates the effect of various specimen generation techniques adopted in DEM on the initial sample heterogeneity and its subsequent influence on the instability response of sand under biaxial shearing. Dense and loose specimens are prepared using five different specimen generation techniques and homogeneity within the specimens has been analyzed in terms of spatial variation of porosity, anisotropy in the contact force and fabric structure. The initiation and subsequent evolution of different instability modes during shearing have been examined based on the spatial porosity distribution, relative particle displacement and particle rotation. Localized instability mode has been observed to emerge in dense specimens in form of cross-type shear bands with varying inclination and thickness for these different specimen generation techniques. Porosity and particle rotation based instability prediction indicate a delayed onset of shear band in comparison to identifications from relative particle displacement and bifurcation of local strains. The loose specimen exhibits bulging type diffused instability accompanied by large relative particle displacement and rotation scattered across the specimen.