A Business Encyclopedia

Three-Bin System

Definition: The Three-Bin System is like a two-bin system, wherein the third bin of inventory is reserved with the supplier. In other words, a manufacturing firm keeps a stock of inventory in two bins, and at the same time, the supplier of the inventory will keep one bin reserved at his location.

The Three-bin is built on the concept of Kanban system, a system used by the Japanese manufacturers, who regulate the supply of the components through the use of a card, displaying the set of specifications and instructions. This card is shown by the work centres when they wish to draw inventory from the supply bins.

All the three bins, one at the shop floor, another at the back store and the third bin at the supplier’s location are well equipped with a Kanban card, to track the movement of inventory.

Once the inventory is used from the bin placed on the shop floor, it gets replenished from the bin stored back store. Later the bin in the back store is sent to the supplier to get it replenished from the inventory reserved with the supplier. Then, the supplier will manufacture more inventory to fill the empty bin placed with him.

Thus, the three-bin system is followed to have a secured flow of inventories throughout the production of the finished goods.

Leave a Reply

Your email address will not be published. Required fields are marked *


Related pages

bureauticdefine scatter diagram in statisticsestament definitiontall organisational structure definitionwhat is meant by elasticity of demanddefine barometerscontingency leadership style definitiondisadvantages of sales promotionextention meaningdefinition of orientation in hrmdefinition of participative leadershipforecasting techniquehindi meaning of innovationlessor defdefine hrmjoseph a schumpeterexplain liquidationknight risk uncertainty and profitlaw of diminishing marginal utility curvetypes of elasticity of demand with exampleswhat are the different types of marketingdefine truncationmicroenvironmental factors in marketingmeaning of probability in hindiaccounting liquidity ratioswhats rural meanexplain cluster samplingbranded credit card programselasticity of substitution cobb douglasdefine effective communicatordelphi definewhat is jit systemdefinition of sociocultural factorsconcentration banking and lock box systemsbi kiosk bankingfactors influencing buying behaviorsampling distribution of proportiondefinition of scatter chartindifference curve approachwhat is oligopoly marketwhat is preferential shareslaw of equimarginal utilityjohari windowmonopoly hindi meaningtwo bin kanban systemelasticity of demand determinantssemantic barrierswhat is travel chequehow to do manpower planningautocracy definitiondefine technological unemploymentdefinition of formal and informal communicationgreenmail paymentdefinition of snowballnarrow meaning in hindiwhat defines a monopolywhat is operant theorysole proprietorship meansgoods with elastic demandfutures and forwards differenceretained profits advantages and disadvantagesexamples of sole proprietor businessesformula for asset turnovermonetary policy instruments definitiondisguised unemployment definitioneudaimonism definitionreinforcement advertising examplesphotocopy machine definitionfixed asset turnover ratio exampledefine unitary elastic demanddefinition entrepeneurfactors affecting marketing mixdifference between democratic and autocratic leadership styleauthorised capital definitionmeaning of homogeneous in hindilimitations of target costingdefinition of teleology