Inventory control is a crucial aspect of food and beverage operations, as it affects the quality, cost, and availability of your products. One of the simplest and most effective methods to manage your inventory is using a two-bin system. In this article, you will learn what a two-bin system is, how it works, and what benefits it can bring to your business.
A two-bin system is a type of inventory control system that uses two containers or bins for each item. One bin is the working bin, which contains the stock that is currently in use or ready to be used. The other bin is the reserve bin, which contains the backup or replenishment stock. When the working bin is empty, you switch to the reserve bin and order more stock to fill the empty bin.
A two-bin inventory system is a straightforward method used to manage inventory levels, especially for items with steady and predictable consumption. It involves using two locations to control inventory.
A two-bin system works by setting a reorder point and a reorder quantity for each item. The reorder point is the minimum level of stock that triggers a new order. The reorder quantity is the amount of stock that is ordered each time. The reorder point and quantity depend on the demand, lead time, and safety stock of each item. The safety stock is the extra stock that is kept to prevent stockouts due to unexpected demand or delays.
How I always do this is to label one bin as the "active" bin, containing the quantity currently in use.The second bin is the "reserve" or backup bin, holding the replenishment stock.
A two-bin system can offer several advantages to your food and beverage operations, such as minimizing the risk of stockouts and overstocking, simplifying the inventory management process, conserving time and labor, and enhancing the quality and freshness of your products. With a two-bin system, you have a reserve bin to cover the demand while waiting for a new order. Additionally, you only need to monitor the level of the working bin and order when it is empty. Furthermore, you do not need to count or scan the stock frequently or use complex software or equipment. Moreover, you can use the first-in, first-out (FIFO) principle and rotate the stock regularly.
It’s an easy-to-understand and implement system. Helps prevent running out of stock by triggering reorders at a set level and manages inventory without complex software or systems.
A two-bin system is not without its challenges, however. This method requires more space and storage capacity, as two bins are needed for each item and a sufficient safety stock has to be maintained. Additionally, it increases the inventory carrying costs, as more money has to be invested in holding the stock and paying for storage, insurance, and maintenance expenses. Furthermore, it is less flexible and responsive to changes in demand, as a fixed quantity must be ordered each time and adjusting the order frequency or size is difficult. Lastly, it is less accurate and reliable, as visual cues and manual orders are necessary and human errors or miscommunication can occur.
It works best for items with predictable usage and requires vigilant observation to prevent stockouts. It also increases cost.
To implement a two-bin system in your food and beverage operations, you need to identify the items that are suitable for the system, such as fast-moving, low-value, or perishable products. Calculate the reorder point and quantity for each item, based on the average daily demand, lead time, and safety stock level. Label and organize the bins with clear and consistent signs, codes, or colors to indicate the working bin and reserve bin. Train staff on the purpose, rules, and procedures of the two-bin system and monitor its performance with indicators such as inventory turnover, fill rate, or waste rate. Make adjustments as needed.