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Posted by Stephanie on June 19, 2023

Fulfilling orders can be a complicated process if you need to manage retail, eCommerce, and omnichannel fulfillment alongside light manufacturing, product kitting, and assembly operations. It’s possible to make your warehouse processes more efficient by adopting certain kitting fulfillment techniques. If the demand and output in your warehouse varies, kitting can be a highly effective method for reducing costs and making sure that some of your slow-moving items are sold.

When implemented correctly, kitting will also help you reduce overhead costs and lessen the amount of inventory management that must take place. You should notice that your shipping costs are significantly lower as well. No matter what types of items you store and ship from your warehouse, you can benefit from kitting. Below is a comprehensive guide on warehouse kitting and assembly.

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Introduction to Kitting

Kitting is a process that involves individual product SKUs or items being packaged together in order to create a larger product that can be sent to a single customer. For instance, a customer might order a hard drive, mouse, and headphones at the same time they buy a computer. In this scenario, the bundled products would form into a new SKU before the shipment takes place. When you perform kitting in your facility, your goal will be to assemble items into a small number of packages to facilitate better inventory management. Kitting is commonly used by eCommerce companies.

By kitting together items before you ship them, you can better manage the order fulfillment process. This strategy gives you the opportunity to increase sales or prepare for a larger volume of customer orders. Without kitting, separate SKUs would need to be packaged on their own and delivered to the customer in multiple shipments, which increases the costs for the customer as well as the company. Performing product kitting allows you to:

  • Reduce shipping costs
  • Optimize your inventory management techniques
  • Enhance order tracking functionality
  • Improve customer satisfaction
  • Streamline your warehouse activities
  • Reduce pick-and-pack time
  • Lower packaging expenses

Keep in mind that there are numerous ways that companies can use the kitting process, one of which involves creating subscription boxes. To understand how important kitting can be to your warehouse, you should first know about assembly and what this process entails. Assembly occurs when different product components are put together to make an end product. While the assembly and kitting processes are similar, assembly often involves the last steps of manufacturing that take place before a complete product is shipped out to customers and stores.

Your warehouse may consist of an assembly line, which is where assembly kitting will occur. While the assembly process is ongoing, employees are tasked with moving components down a line to assemble the final product. This process is an essential aspect of shipping products since it allows manufacturers to have different steps of assembly occur at the same time. When implementing an assembly line in your warehouse, you should save a considerable amount of resources and time.

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Examples of Kitting in Practice

The kitting process is the same as bundling different items together to be sold and shipped. However, kitting focuses on complementary items that are capable of being sold as a single product. In comparison, bundling occurs when you group any items together.

A common example of kitting involves subscription boxes, which can come with all of the ingredients necessary to make certain meals. A company may also choose to perform kitting to improve operational efficiency. For instance, maintenance and repair contractors often give their employees kits that consist of all of the tools they require for their day-to-day jobs.

The kitting process can also involve a company choosing to sell a product that has several accessory options depending on the customer’s location or the product type. Kitting provides companies will the ability to pre-assemble different order options, after which all they need to do is package them once an order comes in.

Light Manufacturing and Kitting

One element of kitting and assembly that you should understand is light manufacturing, which involves using light equipment and machinery to perform the entire manufacturing process in a single building. In heavy manufacturing, the creation of different items and products would take place outdoors with the use of plants and heavy equipment.

During the light manufacturing process, your warehouse could build parts of the product or alter the product before other components have been assembled and fully kitted together. By incorporating light manufacturing in the kitting process, you’ll be able to improve packaging efficiency, reduce space, and increase cash flows. Keep in mind that kitting and light manufacturing are often employed at:

  • Assembly plants
  • Production facilities
  • Manufacturing warehouses
  • Fulfillment service centers
  • Distribution centers
  • Maintenance and repair facilities
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The Start-to-Finish Kitting Process

Depending on how your facility is set up, it’s possible to manage the kitting process in your warehouse. Doing so will keep errors to a minimum and save time. You can streamline the kitting process by using an advanced and feature-rich warehouse management system that comes with the latest software.

Focus on improving efficiency wherever possible. You can take steps to bolster efficiency with software solutions like Flexpick 2.0. This software is customizable and is designed to help you eliminate inefficiencies within your picking and packaging processes.

Once a customer makes an order with several items in it, your personnel can use SKUs to determine which items they need to select to ensure an order is fulfilled. After all items are placed in a kit via the WMS, a single SKU will be attached to the bundle. You can then have the finalized kits packaged together to prepare them for shipment.

Delivering Value through Kitting and Assembly

Kitting provides warehouses with many distinct advantages, which include everything from higher revenues and less expenses to better customer satisfaction. Implementing these techniques in your warehouse should also help your employees make fewer errors. All of the products you place in a kit are identified beforehand, which means that there’s a much lower chance that your personnel will make errors during the picking and packing processes.

If your personnel were to pick and pack these items individually, it’s more likely that items would be sent to incorrect addresses or placed in the wrong packages. By reducing the number of mistakes that are made when packing and shipping orders, you should notice a boost in customer satisfaction and an increase in savings. More accurate fulfillment means that fewer returns need to be processed.

Once kitting is integrated into your warehouse, you’ll also benefit from more efficiently using your space. Combining different items into kits should make it easier for you to reduce the amount of packaging you need, which invariably saves space. Keep in mind that labor costs should also be lower as well. Picking every item individually only serves to waste time. When you effectively mitigate this issue, your warehouse will experience an increase in productivity as well as a decrease in labor costs for every order.

As touched upon previously, shipping costs are invariably lower as well. Let’s say that your warehouse doesn’t use this kitting technique. If a customer purchases three different items in the same order, these items would need to be picked and sent out in separate packages, which results in three distinct shipments. When these items are placed in the same package, you and your customers will save money.

Once implemented, kitting should help you increase your average order value while also assisting you in selling more products. Customers know that they save money by having the items they purchase shipped out together instead of being in separate packages. The final advantage of choosing kitting for your warehouse is that you’ll be able to ship items faster. Since employees don’t spend as much time finding, picking, and packaging each individual item, the kit can be put together and shipped out in next to no time.

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Conclusion

For the modern warehouse, kitting is an integral process that helps improve efficiency and lower costs. Your employees won’t spend nearly as much time picking and packaging items to be shipped out, which should boost profits and employee morale. Customers also save money, which gives them a better experience and increases the likelihood that they’ll continue ordering from your business.

If you feel that you don’t have the time or money to complete the kitting and assembly process in your own facility, you should think about outsourcing to specialized logistics providers. They’ll manage the whole operation while helping you save time and keep errors at bay. Integrating kitting into your operations should provide you with tangible benefits instantly.

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