## Two Bin System (Double Bin System)
A simple, visual reorder trigger that avoids complex calculations for routine items.
### Mechanics
Each storage bin is physically divided into two compartments:
| Compartment | Contents | Purpose |
|---|---|---|
| Larger part | Working stock (bulk of inventory) | Day-to-day issues |
| Smaller part | Stock equal to minimum stock level | Buffer during lead time |
Reorder trigger: The moment issues must start from the smaller part, a fresh purchase order is placed immediately. Stock in the smaller part covers consumption during supplier lead time.
> No paperwork calculation needed — the physical act of opening the second bin IS the signal.
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## Establishment of System of Budgets for Inventory
Material requirements are planned in advance for a full year based on:
- Production plans
- Production schedules
An Inventory Requirements Budget is prepared to:
1. Determine the exact quantity of each material needed
2. Determine exactly when each material will be needed
3. Discourage unnecessary or speculative investment in inventories
This converts production plans into a procurement calendar, preventing both shortages and over-purchasing.