Bin card

A bin card is a document or a computer record that is used to track the inventory level of a specific item in a warehouse or storage facility. It typically includes information such as the item's description, current stock level, and recent transactions (such as deliveries and withdrawals). Bin cards are used to ensure that inventory levels are accurate and to help prevent stockouts or overstocking. They are often used in conjunction with a bin system, where each item is assigned to a specific storage location (or "bin") and the bin card is used to track the inventory level for that location.

Examples of bin card use

Fig.1. Bin card example

An example of using a bin card to track inventory would be in a warehouse that stores auto parts. Each part is assigned to a specific bin and the bin card for that part would include information such as the part number, description, current stock level, and recent transactions.

For example, the bin card for a particular type of spark plug might show that there were originally 100 spark plugs in the bin, but 20 were withdrawn for a recent order, leaving 80 in stock. If a new delivery of 50 spark plugs is received, the bin card would be updated to reflect the new stock level of 130.

The warehouse workers would use the bin card to check the inventory level before fulfilling a customer order. If the bin card indicates that there are not enough spark plugs in stock, they would know to order more before they run out. Similarly, if the bin card shows that there are too many spark plugs in stock, they could adjust their ordering to avoid overstocking.

In a computerized system, the bin card information is kept in a software that allows warehouse workers to access the information quickly and easily, update it as needed, and even generate reports based on the information.

Information stored on bin card

A bin card typically includes the following information:

1. Item description: This includes the name, model number, or other identifying information for the item being tracked.
2. Current stock level: This is the current quantity of the item that is available in the bin.
3. Recent transactions: This includes information about recent deliveries, withdrawals, or other transactions that have affected the stock level. This information can include the date, quantity, and source or destination of the item.
4. Reorder level: This is the level of stock at which an order for more of the item should be placed.
5. Maximum and minimum stock level: This is the highest and lowest level of stock that is considered acceptable for the item, and is used to help prevent stockouts or overstocking.
6. Safety stock level: This is the level of stock that is kept on hand to ensure that the item is available in case of unexpected demand or supply chain disruptions.
7. Lead time: This is the time it takes for an order to be delivered after it is placed.
8. Supplier Information: This includes supplier name, contact information, and other relevant details.
9. Bin or location: This is the physical location of the item in the warehouse or store.
10. Other information: Depending on the specific application, a bin card may also include other relevant information such as expiration dates, serial numbers, or other details that are specific to the item or industry.

A bin card is a document or computer record that contains information about the inventory level of a specific item in a warehouse or storage facility. It typically includes information such as the item's description, current stock level, recent transactions, reorder level, maximum and minimum stock level, safety stock level, lead time, supplier information, bin or location and other relevant information that is specific to the item or industry.

Role Of Bin Card

Bin cards have many practical applications in a variety of industries and settings. Here are a few examples:

• Warehouses and distribution centers: Bin cards are commonly used in warehouses and distribution centers to track inventory levels, ensure accuracy, and prevent stockouts or overstocking.
• Manufacturing: In a manufacturing setting, bin cards can be used to track the inventory of raw materials and finished goods, as well as to monitor the usage of tools and equipment.
• Retail: Retail businesses can use bin cards to track the inventory of products in their store, which can help them to better manage stock levels, identify slow-moving products, and improve customer service.
• Hospitals and clinics: Bin cards can be used in hospitals and clinics to track the inventory of medical supplies, such as medications, bandages, and equipment.
• Construction: Bin cards can be used on construction sites to track the inventory of tools, equipment, and materials, which can help to ensure that the right items are available when needed and prevent delays.
• Government: Bin cards can be used by government agencies to track the inventory of equipment, vehicles, and supplies, which can help them to better manage their resources.

In summary, Bin cards are versatile and can be used in various fields to track inventory levels and improve efficiency, accuracy and inventory management. Bin card can contain more information, e.g.: notes about problems with stock item, rules of storage and movement, expiration date, prices, contact to supplier.

Bin card in modern warehouses is replaced by its electronic version. Extensive computer systems help manage goods in warehouse. They collect information about places of storage. They can even be used in automatic or semi-automatic order collection.

Bin Card's Functions

At the storehouses bin cards are used for the recording of the quantitative data for the different store items. The issue, balance and receipt of all materials are noted on them(Cat2 Information & Management Control 2009, p.4).

It is usually kept in the bin or on the shelf. Also it can be hung over the rack (bin). Separated bin cards are created for every good in the storehouse . Also it can be when two different materials are set in one place. They record every coming in and coming out of the product. Bin cards are very helpful in a perpetual inventory system. Perpetual inventory - system of inventory, that regularly collect all transaction quantities(incoming and outgoing). That helps to have the record of the actual balance on hand at every moment(Ed C. Mercado 2009, p.65).

Bin cards can also determine the maximum or minimum of inventory levels. That information, that is mentioned at the bin card, supply dependable rates of the inventory use(Ng'ang'a J. 2013, p.33).

The products’ number, written on the bin card, should always be the same as it is in reality. On the example of beverage control system, the main reasons, why bin cards are used at the control procedures, are: "to simplify and standardize beverage control procedures and forms; to facilitate purchasing, storing, requisitioning, and recording of physical inventories; to provide precise numerical product description to be used in inventory and purchasing control systems"(C. Ojugo 2009, p.163).

History

At the time before computers appeared, bin cards were popular in the storage areas. It looked as a little index card that was set in front of every product or item at the stock. Usually the owner or manager used the bin card at the end of the month to check the quantity of the goods and determine data for the financial statements(T. Jones 2008, p. 190).

Bin cards were created to enable to have the clear vision how many products are and what products are missing. That is possible due to the unique code number that has every product(Cat2 Information & Management Control 2009, p.4).

Difference Between Stores Ledger And Bin Card

Stores ledger - the accounting record, that provide the record of all items that were coming and leaving for the stores. The difference between stores ledger and bin cards: stores ledger provides the record data both: in quantitative and monetary terms. Bin cards include the quantitative details only. They are kept in the cost accounting department (bin card is kept in the stock room). It is similar to the bin card, but also provides the monetary details for the stores. Except this, transactions in bin cards are noted individually, when in stores ledger only summarized transactions are noted.Connecting them together is done for being ensured that the set of records and the balances in bin cards and stores ledger are the same. That makes possible to do the internal check(Cat2 Information & Management Control 2009, p.4).

The differences can appear because of:

• arithmetical mistakes in calculating process
• missing some records or mistakes in posting records in one of the document or in both
• putting the data in the wrong column for that (for example, issues in the column for the receipt)(Cat2 Information & Management Control 2009, p.4).

Bin Card In The Stock Process

The bill of the materials should estimate the quantity of how much of material is required to be finished in some order. Usually it is used when the company practices the job order system, that is created for the production department. The workers send the copy of a bill to the storeroom. There the bin card is checked to understand whether materials are on the order or on hand to be able to cover requirements of the production. In that case if there is not enough of materials - the purchase requisition should increase in instance. However, if there is no lack of materials the influence on the inventory system can be estimated in advance. The main aim of the bill is to have clear vision whether we have sufficient materials or no(J. Hart, C. Wilson, C. Fergus 2012, p.120).

Happens the situation when requisitioned materials should be returned to the storeroom. There should be the report, that explains because of what reason that goods were returned. The storeperson returns the materials first, regulates the bin card and sends the report about the materials, that were returned, to the store clerk. The store clerk returns that amount of the money that was paid(J. Hart, C. Wilson, C. Fergus 2012, p.120).

One-Bin System

A one-bin system is an inventory management system where only one bin (i.e. storage location) is used for an item, regardless of the quantity of the item in stock. The one-bin system is also known as the kanban system. It is based on the idea of "pull" inventory management, where the inventory level is replenished based on actual demand, rather than forecasting.

In a one-bin system, a signal card or an electronic signal is used to indicate when an item needs to be replenished. This signal is triggered when the quantity of the item in the bin reaches a predetermined level, known as the reorder point. When the signal is activated, a new order is placed for the item, and the supplier delivers the item to the bin as soon as possible.

The one-bin system is particularly useful for items that have a high usage rate and a relatively low cost per unit. It is also well suited for items that are used in a repetitive process, such as in manufacturing. Because the one-bin system relies on actual demand, it helps to minimize inventory and reduces the risk of stockouts or overstocking. This can lead to cost savings, improved efficiency, and better customer service.

The one-bin system also helps to reduce lead times, as orders are placed only when they are needed, rather than in advance. This can also help to reduce the amount of working capital that is tied up in inventory.

It is important to note that the one-bin system requires close coordination between the supplier and the customer, and it requires good communication, trust, and cooperation. It also requires accurate forecasting, so that the items are delivered on time to prevent stock-out.

In One-Bin System items are always being refilled, even in that situations when only few goods are needed. At periods that are determined, for example, weekly, the inventory increases to the maximum. It differs from the P-Model. Because in One-Bin System items are replenished always, and in the optional replenishment system, the goods are refilled, when inventory used much more than some estimated minimum(P. Sinna, S. Sinna 2007, p.549).

Two-Bin System

A two-bin system is an inventory management system where two bins are used for each item, with one bin holding the current inventory and the other bin holding a reserve or safety stock. The two-bin system is also known as the "two-bin kanban" system and it is a variation of the one-bin system.

In a two-bin system, the first bin, also called the "active bin", is used to hold the current inventory of an item, and the second bin, also called the "reserve bin" or "buffer bin", is used to hold a safety stock of the item. The safety stock is there as a buffer for unexpected demand or supply chain disruptions. The active bin is monitored, and when the inventory level reaches a predetermined reorder point, a signal is sent to the supplier to replenish the active bin, at the same time the reserve bin is moved to the active bin.

The two-bin system helps to ensure that items are always available when needed, while minimizing the amount of inventory that is kept on hand. It also helps to reduce lead times and improve customer service by ensuring that items are available when needed.

The two-bin system is particularly useful for items that have a moderate usage rate and a relatively low cost per unit. It is also well suited for items that are used in a repetitive process, such as in manufacturing.

Like the one-bin system, the two-bin system also requires close coordination between the supplier and the customer, and it requires good communication, trust, and cooperation. It also requires accurate forecasting, so that the items are delivered on time to prevent stock-out. It also requires careful monitoring of inventory levels and regular adjustment of reorder points to ensure that the safety stock level is adequate to meet unexpected demand.

Bin card — recommended articles

Inventory record — Inventory adjustments — Stock register — Finished goods inventory — Merchandise inventory — Cycle stock — Inventory in transit — ABC analysis — Advice of shipment

References

• Bartmann D., Beckmann M.(1992) Inventory Control, Springer-Verlag.
• Cat2 Information & Management Control - Study Text, (2009), Get Through Guides, 4.
• Faber, N., de Koster, R. M. B., & van de VELDE, S. L. (2002). Linking warehouse complexity to warehouse planning and control structure: an exploratory study of the use of warehouse management information systems. International Journal of Physical Distribution & Logistics Management, 32(5), 381-395.
• Hart J.,Wilson C., Fergus C. (2012), Management Accounting: Principles & Applications, Pearson Higher Education AU, Frenchs Forest, 120-121.
• Jones A.(2008), Culinary Calculations Simplified Math for Culinary Professionals, JohnWiley&Sons,New Jersey, 190.
• Mercado E.(2009), Hands-On Inventory Management, Cengage Learning, 65.
• Ng'ang'a J.(2013), An Assessment of the Factors Influencing Effectivevess of Inventory Control, International Journal of Business and Commerce, 3(1), Kenya, 33-51.
• Ojugo C.(2009), Practical Food and Beverage Cost Control, Cengage Learning,163.
• Samanta P. (2015), Introduction to inventory management, Berhampur, 18.
• Sinna P., Sinna S. (2007), Current Trends in Management, Nirali Prakashan, Mumbai, 549.

Author: Diana Fandul