The Two-Bin Kanban System and how it works

Kanban has been used for a long time now to manage production and several other things. It is also known that Kanban system can be used to improve lean manufacturing effort. One such way to achieve this is by using the Two-Bin Kanban system. When Kanban strategy is strong, it has the potential to reduce the cost of production and the time used in producing a good or delivering a service. The two-bin Kanban system from the beginning is built on visual signs so that we can be immediately notified the moment part of our inventory is running low. This will give us time to replenish it and thus the production process wouldn’t be delayed.

How does the Two-Bin system work?

For those that work in factories, two containers are made available just for inventory. This allows them to effectively work through them one after the other. How consistently items from the containers are used determined how often they should be replenished. When the bin is empty, replenishment is needed. The continuous process of replenishing and using is designed so that stock-out and more time spent on production can be prevented.
The concept behind this is quite clear and straightforward. However, there are some technical aspects to it that you have to consider too. You should know that for the two-bin Kanban system to work optimally, the period it takes to use all the parts in a container should exceed the order and delivery schedule. If the opposite is the case, then the system wouldn’t flourish as expected.

What factors do you consider when planning Kanban?

Just like every other thing, the tow-bin Kanban system has to be planned too. You will have to consider some aspects of inventory and production. Oracle has been used for long by most businesses and firms to determine the best way to set up for the two-bin Kanban system. Oracle though uses a calculation that is based on one Kanban card per bin.
In order to calculate this, you will have to know the elements. The number of Kanban cards is represented by C. the lead times to replenish the inventory is represented by L, the size of the Kanban is denoted by S and finally, the daily demand for the particular part has D as the letter representing it. The size of the Kanban is equal to number of parts that are due for replenishment. Therefore, a bin that has 50 parts implies that the Kanban size is 50.

Oracle’s formula is a rough estimate but it has worked for a long time. It states that when the number of Kanban cards is multiplied, minus one, with the size of the Kanban, should equal the lead time multiplied by the daily demand for the part, or it can be given as

(C-1) * S = L * D

This approach looks basic and there are other factors that play a role apart from the ones listed above. You should always keep an eye on the two-bin system to ensure that your inventory is set up correctly and replenished as needed.

What’s next?
To learn the Kanban 101 at team-level, enroll in the IBQMI® Approved Kanban Professional.
If you want to apply Kanban to any environment at an advanced coach level, you should enroll in the Certified Kanban Coach®.