Stock Control - Bin Cards

Submitted by SimonBrown on February 12, 2007 - 12:49am.

I have been working as a logistician for two years, without much in the way of formal training. For the life of me, I still cannot work out the value of using bin cards. To be honest, I'm not really sure what to do with them. Enlightenment would be most welcome. Cheers.

Tags: Logistics
Submitted by myraidgoups on February 12, 2007 - 11:49am.

It depends on your situation: if you are a one man show, than there is really not much to recommend using them. However, if you have a separate logistics manager/head logistician/stock manager/whatever on the one hand and a storekeeper on the other (which would be the normal situation), then bin cards come in quite handy.

Basically, they help you to make sure that:

  • goods do not disappear;
  • you have a constant overview of your streams (which can help you when making forecasts/orders).

So how do they do this? Let's assume that you start out with 10,000 widgets on January 1. On January 3, you receive another 10,000. On January 5, your head widgeteer needs 5,000 and the program manager authorizes this. The assistant widgeteer gets another 3,000 on January 13. On January 17, he returns 2,000 that were unused in the latest widgeting project. On January 28, the program manager asks the head widgeteer to prepare an order, and he asks you what is in stock and how many have been used over the last month.

This would not be difficult if you only have one type of widgets, but now imagine that this is only one of 800 different stock items, some of which have several movements each day, for each of which this needs to be done.

Of course, you first need to know how much of each type of widget you have. To do so, you could go in and count each and every one of them, but a much more efficient way of doing this would be to get the bin cards, compare the amounts on the bin cards for a sample of the articles, and use the totals on the bin cards for your store report (assuming that the sample count did not lead to any material discrepancies; if this were not the case you will have a problem with your storekeeper...). Similarly, it is now quite easy to work out the consumption for each article from the stock cards. If you did not have these, you would have to go back to your issue orders (if you have them... I have noticed that there is a strong correlation between a lack of stock cards and a lack of other controls) and go through each and every one of them.

Now for prevention of leakage. As you have the stock cards there on your desk anyway, you check a sample of the transactions on the cards with the authorized store issue orders (from cards to orders) and receipts/invoices (from receipts/invoices towards the stock cards). Then check a few cards for mathematical accuracy (IOW: can your storekeeper add and subtract), and you have a reasonable amount of assurance that your stocks are okay and there have not been any significant leakages.

Of course, you could do this with cards (or a spreadsheet, or even a database) in your office as well. However, if there are differences in that case, it will be almost impossible for the storekeeper to defend him/herself against possibly unfounded allegations of theft (hey, you can make a mistake too, no?). If I were a storekeeper, I would for this reason insist on maintaining store cards which I maintain myself, and having copies of authorized issue orders and receipts.

So there you have it: stock/bin cards are an essential measure of internal control, as well as a very helpful tool for your position/consumption reports.

Hope this helped, but don't hesitate to ask for clarification if I muddied the waters even more.

Cheers,
Michael

Submitted by Tom Longley on February 12, 2007 - 1:04pm.

Michael - Thank you very much for your considered response. I don't know about Simon, but I'm certainly more enlightened about stock/bin cards now.

Submitted by SimonBrown on February 12, 2007 - 3:46pm.

Thanks Michael, that seems to make sense. Perhaps I should have been clearer about my confusion. Does the bin card have any additional function that the stock card does not cover? Or is it an extra redundancy? Sorry to be so thick! Cheers.

Simon

Submitted by myraidgoups on February 13, 2007 - 11:33am.

Ah, right, sorry, it seems I didn't understand your question correctly.

If you already have stock cards that are maintained by the storekeeper, then I would agree with you that bin cards are a bit superfluous. However, that is only true if the stock cards are maintained on at least a daily basis. If stock cards are only updated once a week or month, then you would still need the bin cards to have an up-to-date overview at any given time, and to indicate when you reach critical/ordering levels (if you use a min/max system). In that case, I would use the bin cards as real-time records (record the movement when you are in front of your shelf to take out or put in your goods) and transfer accumulated information to your stock cards on a periodical schedule.

However, like I said, if you have a storekeeper who is accurate and obsessive enough to maintain store cards at least daily, then you really don't need bin cards.

Submitted by SimonBrown on February 13, 2007 - 12:29pm.

Thanks a lot.
Simon

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