The Min to Bin Analysis is a very simple, and often overlooked, tool to determine if the stock order process is performing as expected.
The Min to Bin Analysis reviews the stock order process by each task within the stock replenishment cycle. The analysis begins at the point the part reach the reorder point and breaks each task into the number of days for each task.
The typical tasks within the Min to Bin Analysis are:
· The number of days when a part reaches order point to being ordered in for stock replenishment
· Number of days it takes the vendor to process the stock order
· Number of shipping days for the stock order to arrive at the warehouse
· Number of days it takes for the stock order to be placed back in to stock
· Number of days for the stock receipt to be receipted in the inventory system
The total number of days represents the total Min to Bin Days.
Once the number of days has been identified it is important to take a closer look at each task to determine if improvement can be accomplished, instead of increase the number of lead time days, which increase the inventory level.
Below is an example:
Min to Bin Tasks | # Days | Task Improvement |
Established # Days to Replinish | 9 | 9 |
# Days Order P. to Order day | 4 | 0 |
# Days vendor process stock order | 2 | 0 |
# Days to ship stock order | 4 | 1 |
# Days to receipt stock order | 2 | 1 |
Min to Bin Days | 12 | 2 |
Deficit Min to Bin Days | 3 | |
Updated Min to Bin Days | 10 |
The current system is set for a 9 day Min to Bin lead time. Based on the analysis the process is taking 12 days to replenish the stock orders.
After additional review of each step in the process it was determined the number days it is taking ship the stock orders can be improved by one day, and the number of days to receipt the stock orders can be improved by one day. Therefore two days can be taken off the 12 days, but this still is higher than the systems current 9 days. To meet the expected inventory fill rates the Min to Bin lead time will need to be raised to 10 days.
By conducting a closer analysis of how to reduce the number of shipping days and the number of days to receipt the stock orders, will prevent increasing the inventory level by two day.
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