Inventory Management and Bin Stocking Systems
Bin stocking is an inventory management tactic in a warehouse management system that assists in tracking how much of a given item is available or which goods are stocked. A corporation in a warehouse management system may use bin stocking and inventory control to ensure that the product they require is always accessible when they need it, without relying on rush orders or locating storage space. They can optimize their revenues by carrying the least inventory while maintaining client happiness in a warehouse management system.
Inventory Control in Two Bins
What Is the Definition of Two-Bin Inventory Control in Warehouse Management System?
Two-bin inventory control in the warehouse management system is a mechanism for determining when to refill products or materials utilized in manufacturing. When the first bin’s contents are emptied, an order is made to replenish or replace them. The second bin is meant to contain enough products to endure until the first bin’s order arrives. In brief, the first bin has the bare minimum of working stock, whereas the second bin contains reserve stock or leftover stuff.
The two-bin inventory control approach is also known as Kanban( in Japanese) in the warehouse management system, and it is firmly related to the just-in-time (JIT) production process.
How Does Inventory Control in Two Bins Work?
One of the most difficult difficulties businesses confront is effectively controlling stock levels. Inadequate inventory might lead to missed sales opportunities and losing ground to the competition. On the other hand, overstocking raises the risk of damage, spoilage, theft, and falling subject to swings in demand. It also entails greater storage expenses and longer periods between recouping money from acquired items and reinvesting it in the firm.
The two-bin inventory control system is a fundamental strategy used to guarantee that businesses minimize these risks and always have, more or less, the proper amount of stock to fulfill demand without overstocking.
In its most basic version, the procedure is as follows:
- The first bin is positioned above or in front of the second bin.
- On the bottom of each container is a reorder card.
- Stock is collected from the easier-to-reach first bin.
- When the first bin runs out of space, it is replaced by the second bin.
- The first bin is restocked using the reorder card.
- When the requested merchandise comes, it is placed in the empty bin, and the cycle begins again.
This method is widely used in several businesses that include industrial processes, and it is also useful for hospital inventory control.
Particular Considerations
Two-bin inventory control is generally often utilized for tiny or low-value commodities purchased and kept in large quantities. On the other hand, higher-value items are subject to the perpetual inventory system.
Furthermore, the quantity ordered for the reserve stock (bin no. 2) can be changed based on past patterns of variance in the depletion rate of the working stock (bin no. 1).
It is critical that the fresh order made after emptying the first bin arrives before the second bin is empty, or else the procedure will fail. Because the inventory placed in the first bin is also the inventory that is sold first, the inventory technique utilized for both bins is first-in, first-out (FIFO).
Bin stocking Benefits In Inventory Management.
Inventory control may be difficult, especially when there are so many sectors of a corporation to manage. Inventory management systems may be challenging and need great attention to detail. You obtain various benefits by hiring an outside bin stocking service. These are some examples:
- Customer Support
A quick response time typically signifies that the consumer has a positive image of the organization. Knowing exactly where your inventory is and how much you have allows you to more quickly and easily satisfy client requests—profit increases due to the capacity to serve consumers more effectively.
- Planning
Keeping an accurate inventory count allows you to better track and forecast client purchasing habits. This will enable you to determine better when you need to restock things and how much of each item you need to keep on hand at any one moment. This improves customer service and lowers expenses, and eliminates the risk of running out of goods.
- Expense Management
Controlling your inventory allows you to avoid many maintenances and operating costs associated with a list. By constantly keeping the correct quantity of stock on hand, you may save storage and warehousing costs, as well as any costs associated with acquiring excess, unproductive inventory. Because the item a client need is always in stock, it does not need to be expedited, which saves on shipping expenses.
- Stay away from deterioration and obsolescence.
Inventory levels may be kept just high enough to meet consumer demand by tracking what’s in stock and projecting inventory changes. A bin stocking program saves potential waste by preventing the surplus product from languishing on warehouse shelves.
- Concentrate on Large Projects
By delegating inventory management to Sine-Tific Solutions, you may concentrate your efforts on significant projects and materials. Bin stocking may be a time-consuming operation that diverts your attention from other responsibilities. While we load bins, sort components, and keep your inventory in order, your firm may focus on different aspects of the business, such as enhancing production or finding new vendors.
What exactly is Lot Tracking in Warehouse Management System?
Lot tracking in warehouse management system is a business approach that allows you to track each unit of inventory that enters and exits your warehouse. This usually entails keeping track of each raw material warehouse management system unit you buy from your suppliers, the raw material units used to make completed goods, and the suitable finished units you provide to your clients.
Large and small manufacturing companies in warehouse management system use a lot tracking system as part of their inventory management strategy. Lot monitoring allows each organization to trace product batches throughout the supply chain.
A lot of tracking procedure often begins with the manufacturer and includes distributors, merchants, and other supply chain organizations, and it will continue till the product reaches the individual clients.
Furthermore, while merchants may not continuously monitor which customers purchased a particular product, they can readily trace returned goods to a purchase order and manufacturer invoice. You can identify the original batch of the product in an issue using a lot tracking system. Your system can determine which customers received things from the same set in real-time. You promptly contact your consumers and ask them to remove the impacted jam from the shelf.
You produce and transmit the FDA-requested product recall report from your system. You finished the entire process in less than thirty minutes. While the recall may have impacted your organization, you may rest easy knowing that you could limit the situation immediately.
What Purpose Does lot inventory management Serve in WMS?
Lot control also adds another degree of control to your inventory. It allows you to “tag” a product with an expiration date, configure inventory rotation, and guarantee that the items with the shortest expiration date ship first. It can, however, do more than merely track the expiration date of an inventory lot.
With lot control, you may manage your inventory’s serial numbers, account for the units of measure you use on your inventory, and arrange your warehouse. At any moment, lot control software will give you the exact position of a certain item in your inventory. When you know where every product is, you can reassure your clients, your client’s consumers, and any government organization specifically interested in prohibited narcotics.
When is Lot Control Software Beneficial?
The lot is critical if you transport perishable goods, serialized goods, or highly controlled commodities. Lot is particularly useful if your warehouse has unique areas, such as a temperature-controlled room. Perhaps you have lot numbers assigned to various goods in your inventory; lot control software handles all of that. Here are a few instances of how lot control software may help you:
Expiration dates are used to control lots.
As shown in the last example, lot software allows you to manage lot numbers and track the expiration dates of your inventory. The lot function in a cloud-based system enables you to establish clear communication channels between your warehouse and the FDA or any other regulating body interested in lot numbers.
Benefits of LOT tracking system in inventory management
- Control Product Recalls
In the United States and Canada in2016, there were 760 consumer product recalls, and 764 food recalls. Recalls occur for a variety of reasons. They can happen when a firm detects an issue and decides to remove a product from the market on its own. Other times, a company may be forced to recall a product after government authorities, such as the FDA, express concern. In September 2017, for example, the FDA took steps to place a biomedical device due to concerns about its lack of cybersecurity.
A lot tracking system is crucial in a product recall situation. With a robust lot tracking system, you can instantly identify the batch in trouble, as well as the consumers who got items from that batch. You can immediately contact your customers and inform them that the items have been removed from the shelves with that information. A quick recall will prevent future harm to the consumer’s safety and your reputation.
Furthermore, if you obtain a lot of information from your suppliers, you may determine what we utilized raw ingredients to make the contaminated product. You may then choose whether the issue developed due to use in your manufacturing processes.
- Keep track of product expiration dates.
Your organization must sell as much merchandise as possible to maximize earnings. If you manufacture items with limited shelf life, this process becomes considerably more complex, and lot monitoring becomes more important. You should be able to readily detect which items are approaching their sell-by or expiration dates if you use a sophisticated lot monitoring system.
The things can then be sent or discounted to secure a sale. The first stage is to use a First-In-First-Out (FIFO) delivery method, which may not always be available. Customers’ rules on the accepted range of sell-by and expiration dates might vary.
A big-box shop, for example, may only buy items with a minimum shelf life of two months. On the other hand, a cheap retailer may accept items with a minimum of one month of product shelf life left. You can quickly plan and determine which product batch should go to clients with robust inventory management and batch tracking system.
A lot tracking system will also alert you when your stock is about to approach its sell-by or expiry date and quantify and highlight stock lost due to expiration. As a result, if your product is nearing its expiration date, you’ll be able to determine which batch contains expired items quickly.
You can then take steps to sell or, in the worst-case scenario, write off the merchandise and reclaim important storage space. More crucially, your lot monitoring system should enable you to examine your monthly waste due to product expiring or approaching sell-by dates. Then you may concentrate on lowering your monthly waste and comparing it to industry best practices.
- Observe Legal Requirements
In recent years, the US FDA has tightened regulations for manufacturing, distribution, and retail enterprises. The FDA has particular standards and criteria that all businesses must follow, including product recall processes.
Having a lot tracking system in place aids in dealing with any potential product recall complications. Furthermore, proof of a lot tracking system is a legal need for functioning in some businesses.
For example, the Medication Supply Chain Security Act (DSCSA) mandated that pharmacists preserve and track the drug lot information that they sell. As a result, most pharmacies refuse to work with suppliers that cannot provide lot tracking information.
If you work in the food industry, you should pay close attention. With President Obama’s signature of the Food Safety Modernization Act (FSMA) in 2011, the FDA now has more sweeping authority to take action against any firm whose food products may represent a safety risk to consumers. Having a lot tracking system helps you respond quickly to any food safety issues that arise, and this will help you avoid being punished by the FDA and being forced out of business.
- Certification
Lot monitoring is vital for more than simply regulatory reasons. It is also necessary to get industrial certifications. The International Organization for Standardization (ISO) compliance certification, for example, is a highly respected certification. To obtain this accreditation, you must have many tracking systems in place.
Once you have received this or any other industry accreditation, you will be able to more effectively express to your customers that yours is a trustworthy brand. A high-quality brand whose items are well-made.
- Is Lot Tracking Necessary for My Company?
Lot traceability is likely to be significant for you whether you are a small or large firm, a food or industrial enterprise. While the type and style of information may differ between sectors, keeping track of stock through lot monitoring as part of your inventory control plan is a required business necessity for your firm to succeed. Here are some instances of how various sectors make use of lot tracking.
- Food Service/Restaurants: Keep track of expiration dates for food goods.
- Pharmaceutical Companies: Medication and drug tracking standards are analogous.
- Manufacturers: Monitor production batches in case a product recall is required.
Not to add, lot monitoring software automates lot assignment and sell-by/expiration date alert messages, resulting in a variety of cost-saving options, such as,
- Lower manual labor expenses
- Lowering the costs involved with manually handling a recall
- Cost savings when dealing with lot tracking compliance
What Is the Best Way to Begin?
“An ounce of prevention is worth a pound of cure,” as the adage goes. So, how can a lot tracking system help you prevent your company from future disasters?
You can get by with a manual or spreadsheet-based lot tracking system if you just start producing a few items. However, this may be difficult to manage and is prone to human mistakes. Manually tracking lots becomes increasingly time-consuming as your organization expands, and it is difficult to rely on spreadsheets to track things supplied to clients. Furthermore, selling your items from several warehouses can further confuse matters. All of the difficulties described above can be solved using lot tracking software.
Finally, we know your business is a priority and you need to get the best value for every investment. That’s why the inventory management system is always designed in such a way that you can easily configure it and it suits your needs and you can add additional functionality as your business grows.
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