What Is Kitting?
Kitting isn't by any means a new concept. Anyone who's bought flat-pack furniture will have received a single package containing a collection of components for assembly. These might include panels, fixtures, seals, nuts & bolts, and an Allen key to put them all together. Going back even further than that, the bicycle repair kit is another perfect example. A kit represents disparate items from different sources put together in one place for a specific purpose. However, the term 'kitting' is now being used in a more specific form.
- What is kitting?
- Who is kitting for?
- Pros & cons of kitting
- Kitting best practices
What Is Kitting?
Kitting as it's being used in the modern sense is an expansion of the original principle. Since the pandemic has so greatly escalated the scale of online shopping, kitting has emerged as an inventory technique. If you buy several books from different publishers, for example, it's cheaper for the retailer to post them all at once rather than one at a time. Like the bicycle repair kit, kitting collects together individual products that are related in their purpose. These are then packaged and shipped in a single bale or carton.
It can also be applied to manufacturing operations such as logistics, the warehouse, purchasing and many other applications. At Rowse, we've applied parts kitting to complex automated and pneumatic systems. We can supply a full pneumatic system kit that includes the necessary drives, a compressor, an FRL unit, and all the tubing and fittings you'd need to put it all together. You can also get pneumatic drive repair kits; kits for air tools, balancers and robotic applications. This means that many of the ordering and purchasing processes are simplified, as well as despatch and delivery.
Who Is Kitting For?
Kitting is for everyone. It's convenient for the customer, who gets all the components they need to assemble a pneumatic system in one shipment. It's convenient for the supplier, because they can collect all these components together and ship them more cheaply as a single bulk package. It's also helpful for manufacturers, who can streamline their ordering process by batching components into kit packs for particular products. This will cut down on the number of purchase orders required, and simplify delivery.
Kitting For Manufacturers
For example, you might be manufacturing a product whose total bill of materials contains 100 individual part numbers. You might be able to divide these into categories, say 43% fabricated components, 27% electrical components, and 25% machined components. This would mean that you could order a kit from the supplier in each category, reducing your purchase orders to three. You can then consolidate these key items with the other 5% of required components into a product parts kit, with peripherals like gaskets, inserts, nuts and bolts, etc.
If your suppliers can provide all the hardware you need in kit packs tailored to your assembly process, you'll end up with a much smaller number of kit pack part numbers. Parts kitting like this will ultimately reduce your total number of suppliers, purchase orders and inventory. It'll also have a knock-on effect on waiting times and schedule changes, and will cut down your total overhead costs.
Kitting For Other Sectors
Kitting operations is a comprehensive term including all the activities in the product kitting process. It begins with receiving the order(s), and goes on to the warehouse picking of products; it covers parts kit assembly and packaging, and finally shipping. If you want to conduct kitting operations efficiently and economically, you'll need a streamlined warehouse layout and special training.
In the warehouse, kitting means the physical act of locating multiple stock-keeping units (SKU) and transferring them to an assembly point. They're then bundled together and a new SKU is created for that single package. For logistics companies, kitting helps to streamline the shipment process. They can fulfil their orders more rapidly by kitting them, and reduce their shipping costs. Kitting also makes it easier to track shipments and can therefore increase customer satisfaction.
You can also outsource parts kitting services to a third-party logistics (3PL) company for fulfilment. Many businesses contract such companies to keep down their fulfilment costs and the number of packages their customers receive. Kitting services can also include manufacturing operations, where the product is assembled for the customer by a third party. This is more cost-effective for smaller businesses than in-house assembly, and allows the retailer to focus on sales.
Pros & Cons Of Kitting
Kitting offers many advantages to businesses, consumers, and 3PL companies, but still has its upsides and its downsides.
One of the biggest pros of parts kitting is increased warehouse efficiency. Picking and packing processes will be streamlined, since all the components to be sold together in a kit will be relocated close to each other for storage. This will save your employees (or cobots) valuable time in walking around the warehouse to locate the various products. It's also more cost-effective during regular inventory audits.
Inevitably, streamlining your warehouse flow in this way will also reduce labour costs. Since you're saving time picking and packing each individual order, you'll need fewer people working on order fulfilment, and overtime will become less common.
Picking, packing and shipping many individual products takes time. By kitting them together, each step of the process is faster and you'll find fewer errors. Customers will receive their orders more quickly, leading to satisfied customers who'll be more likely to choose you again. A not inconsiderable bonus is the environmental advantage of reducing unnecessary packaging materials.
You can also increase your product sales by kitting up items that are less in demand. In this way, you'll be able to reduce your inventory and sell products that might otherwise become dead stock. Your customers may well be encouraged to make larger purchases, since product kitting offers added value and customers are always on the lookout for a bargain.
When it comes to parts kitting, there's always the possibility of a particular part in the kit being unavailable when you suffer a major breakdown. This usually happens because the component you need has already been removed from the kit, and used on the occasion of a previous unanticipated breakdown. This means not only that you haven't got the parts that you need for the repair, but also that this kit has been misrepresented in your inventory and is no longer complete for scheduled work.
On the other hand, your inventory records might show that you don't have a particular component, even though it physically exists, because it’s been transferred into a parts kit and is now under a collective SKU. It’s essential, therefore, that inventory is updated if parts are removed from kits, and that planners are kept updated on parts usage and availability. If your inventory is inaccurately maintained, maintenance planners will have to alter their work schedules, and new parts must be ordered before unscheduled maintenance can be carried out.
Kitting Best Practices
The main thing in favour of kitting is having all the necessary parts available when you need them to carry out an installation or repair. Although we're all aiming towards a totally efficient predictive maintenance process, there's always the chance of unplanned downtime. So your first priority is to ensure that all the parts you'll need are available for any downtime, predicted or otherwise.
In most cases, inventory problems are attributable to the processes you use rather than the people who are trying to carry them out, although human error must never be discounted. People generally want to perform their jobs correctly, but sometimes the systems and processes of a business don't adequately reflect its operational needs. To understand and implement kitting best practice, you need to make sure that your company's operations support the activities of your workers, rather than hinder them.
The good news is that you can now get kitting software that will greatly enhance your oversight and operational efficiency. As well as inventory tracking and analysis, kitting software can help you forecast inventory activity and expected sales. This will help to avoid overstocking or running out of kit components. Some software can also aid in sales forecasting and supply chain availability, so you can maximise sales and reduce costs. Kitting software can often be purchased as an add-on to existing packages.
Good Business, Good For The Environment
Parts and product kitting is only part of the bigger picture. The overview is that picking, packing and shipping individual parts isn't as cost-effective or efficient as collecting all the components together into a kit pack. It makes better business sense to consolidate your ordering and purchasing activities, and using less packaging benefits the environment. If you want to build a pneumatic system for your premises, it makes more sense for us to collect all the relevant parts for you and ship the whole lot to you in one go. Then you'll have everything you need at your fingertips, and won't be waiting on seals or tubing to complete the work.
Get More From Rowse Straight To Your Inbox