One bin

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One bin


Example: One bin

This example shows a producer who places 100 orders for fasteners worth $ 20,000 every year. The 'regular' business process costs and the costs incurred using One bin are listed, assembly costs excluded.

One bin concept
Your warehouse will be set up and fitted with storage systems with bar code labels.

Every fastener will be allocated to a set bin and set location. Articles approaching the minimum stock level determined in consultation can be ordered using a bar code reader and a hand-held terminal. The use of bar codes ensures that the number of errors is kept to a minimum. Once the order has been sent by modem, the articles ordered will be delivered.

In a more extensive version of this service, one of our staff members will check your stocks periodically. Your stocks will be timely replenished in the quantities required . Thus, we identify your needs and handle your entire procurement and intake process for you.

business process

cost per business process

frequency per year

regular business processes

One bin

product price

$ 20,000 -

$ 20,000 -

ascertain need

$ 33.30

100

$ 3,330 -

$ 0

obtain and compare quotations

$ 21.20

50

$ 1,060 -

$ 0

place order

$ 41.50

100

$ 4,150 -

$ 0

receive goods

$ 13.50

120

$ 1,620 -

$ 0

quality control

$ 14.00

120

$ 1,680 -

$ 0

put into stock in

central warehouse

$ 6.40

120

$ 768 -

$ 0

inventory costs

15 %

$ 1,500 - 1

$ 750 - 2

collate articles

$ 35.00

300 3

$ 10,500 -

$ 7,000 - 4

internal transportation

$ 22.30

300

$ 6,690 -

$ 6,690 -

invoice administration

$ 14.00

100

$ 1,400 -

$ 1,400 -

other costs

$ 1,000 - 5

service costs

15 % 6

$ 3,000 -

Total

$ 52,698 - 7

$ 39,840 -

1 Average stock rotation = 2 times a year.

2 Average stock rotation = 4 times a year.

3 Based on each order line being divided between three (production) locations.

4 The cost of collating the articles is lower because the stock is smaller and easier to manage, articles are loose in bins, have specific locations, etc.

5 Cost of annual contract negotiations, compiling forecasts, evaluations, etc.

6 Depending on the specific details of the logistic service concept.

7 These are the costs for fasteners excluding assembly costs. The 80-20 rule becomes apparent when assembly costs are included.