Awesome SCM

Reference: lokad.com

The fill rate is the fraction of customer demand that is met through immediate stock availability, without backorders or lost sales. The fill rate differs from the service level indicator. The fill rate has a considerable appeal to practitioners because it represents the fraction of the demand that is likely to be recovered or better serviced if the inventory performance was to be improved. The fill rate is measured empirically by averaging the number of correctly serviced requests over the total number of requests.

Reference: leanmanufacture.net

Two bin systems are common on assembly and moving manufacturing lines where components are added to the product or item being built. The two bin system is just like its name suggests, it is composed of two bins which are full of components or materials to start. As production commences one bin is drawn down of materials and the other bin, which is still full, acts as the buffer or safety stock.

When the first bin is completely depleted the worker or assembly line worker switches to the other bin, similar to a FIFO system. The switch of bins can be interpreted as a kanban signal for the supply process of that particular component to manufacture or supply the component just in time before the second bin runs out of material. The kanban signal can also be generated half way throughout the first bin, depending on lead times for the component to be supplied. 

This system in a way is similar to the EOQ inventory model with safety stock. It is a very common system used in vehicle manufacturing plants. The size or number of components in each bin is usually determined using the EOQ inventory model or a time period model.