Two-Bin Inventory Control
Two-bin inventory control is a system used to ensure a continuous supply of materials or components without any interruption. It’s commonly used for parts or materials that are crucial to a production process and need to be readily available at all times. Here’s how it works:
- Two Bins: Items are kept in two bins (hence the name). The primary bin and a backup bin.
- Usage: Production staff uses the materials or components from the primary bin.
- Reordering: Once the primary bin is empty, production staff starts using items from the backup bin. Simultaneously, an order is placed to refill the primary bin.
- Restocking: When the order arrives, the primary bin is restocked. The backup bin acts as a buffer, ensuring that production can continue uninterrupted while waiting for the new order.
- Repeating the Cycle: The process repeats each time the primary bin is emptied.
Key Advantages of the Two-Bin System:
- Simplicity: The system is easy to understand and implement.
- No Downtime: By using the backup bin while waiting for the primary bin to be restocked, there’s no downtime in production.
- Visual Control: It’s a form of visual inventory control. Workers can easily see when a bin is empty and needs refilling.
- Cost-Effective: By ensuring that stock is reordered only when it’s needed (i.e., when the primary bin is empty), it reduces carrying costs and minimizes the risk of overstocking.
It’s worth noting that while the two-bin system works well for small components or items used in large quantities, it may not be suitable for expensive items or items that are not used frequently. In such cases, other inventory control methods, like the reorder point system or just-in-time (JIT) system, might be more appropriate.
Example of Two-Bin Inventory Control
Let’s take the context of a bicycle manufacturing facility to demonstrate the Two-Bin Inventory Control system.
Item: Ball bearings used in bicycle wheels.
Scenario:
- Setup: The production floor has two bins for ball bearings. Each bin contains 5,000 ball bearings.
- Usage: As bicycles are manufactured, workers take ball bearings from the primary bin. Over time, they exhaust all 5,000 ball bearings in this bin.
- Switch & Reorder: Once the primary bin is empty, the workers start using the ball bearings from the backup bin. At the same moment, the empty primary bin serves as a visual cue to the inventory manager that it’s time to reorder. An order for another 5,000 ball bearings is placed with the supplier.
- Continuation: Workers continue to use the ball bearings from the backup bin for ongoing production. This ensures there’s no halt in the manufacturing process.
- Restock: The order arrives a few days later. The primary bin is refilled with the new stock of 5,000 ball bearings. Production continues, and workers revert to using the primary bin.
- Cycle Repeat: Over time, as the primary bin gets emptied again, the cycle repeats: switch to the backup bin, reorder, restock the primary bin, and continue.
Benefits in this scenario:
- The bicycle manufacturing process never stops due to a shortage of ball bearings. They always have a buffer (the backup bin).
- The visual cue (an empty primary bin) makes it straightforward for the inventory manager to know when to reorder without constantly checking a computer system or doing manual counts.
- There’s reduced risk of over-ordering. Instead of ordering based on predictions, the manager orders when there’s an actual need, as indicated by the empty primary bin.
This simple yet effective system ensures that the production of bicycles remains smooth and efficient without interruptions due to shortages of essential components like ball bearings.
