Function of a Two Bin System

Updated April 17, 2017

A two bin system replenishes inventory based on the amount of stock actually consumed by production, rather than the amount of stock expected to be consumed by production. Put to work in its simplest form, the two bin system is one of the easiest inventory schemes available. Used as a stand-alone system, two bin inventory tracking provides a cost and time efficient choice for many types of small enterprises. A two bin system can also be adapted to work in more complicated manufacturing environments.

Origin and Philosophy

According to Bob Reary in "Getting Lean for Optimal Return," the two bin system grew out of the concept of inventory "pull" associated with just-in-time ordering. Previously, inventory supplies were dictated by the number of orders on hand or on historical demand. Stock was ordered at the front end of the production process based on anticipated use. Ordering stock based on "pull" means that inventory is reordered just in time to continue uninterrupted production.

Basic Components

A two bin system requires two containers filled with an inventoried item. Placement of the bins depends on the room available and/or the manufacturing process used. The bins might be set side by side, one in front of the other or on movable racks. The container to be emptied first holds a set number of pieces. The second container holds enough pieces to last until the first container can be restocked. It is imperative to know how long restocking will take in order for the system to run smoothly.

Stocking the Second Bin

Responding to the "pull" of inventory means don't overstock. Know how long it takes for new inventory to arrive; calculate how much stock will be used during that period of time. Add a small amount of inventory to that figure to cover unexpected circumstances; this number is the amount of stock placed in the second bin. Note the stock level in the second bin when the stock for the first bin arrives; adjust the amount in the second bin up or down as indicated.

Kanban Two Bin System

A two bin system's success relies on the immediate reordering of stock when the first bin empties. Combining Kanban techniques with this inventory scheme underscores the process. PC Magazine defines Kanban as Japanese for "visible record." This method uses cards placed in/on the inventory bin as visual reminders for employees to reorder the container's contents. The cards contain the part number and the number of items to be ordered. Kanban cards also include information about how the parts should be reordered.

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About the Author

Dodie Nelson has multiple years of experience as a writer, corporate manager and traveler. She has a degree in English and has been published in newspapers and magazines as well as online.