The two-bin inventory control method is mainly used for small or low value items at the point of use. Very simply, when the inventory in the first bin is depleted, an order is placed to refill that bin. The order may be placed manually or electronically. In some cases the empty container itself may serve as the inventory replenishment signal or kanban. Inventory from the second bin is consumed while the inventory from the first bin is replenished.
The two-bin system is common in small manufacturing operations where a location may be a tote or pallet with component parts at an assembly station or in small warehouses where a location may be a lane in a flow rack or a compartment in a shelving unit. The advantage of the two-bin system is its simplicity. Many homes work on two-bin systems for items ranging from potato chips to milk. The disadvantage is lack of reliability if the operators are not disciplined to monitor the inventory levels and/or if the housekeeping obscures the inventory levels from the view of the operators.