In the manufacturing and product distribution industries, parts and components of particular items are in high demand. Due to quick turn-around and short product life cycles, consumers, businesses, and OEMs all require spares, replacements, and new parts. The industrial sector adopted the kitting method to keep up with this expansion. What is kitting in manufacturing, and how can kitting process benefit manufacturing?
Overview of the manufacturing process and how kitting fits in
Manufacturing kitting and distribution process
Let's start by learning about the manufacturing kitting and distribution process. Manufacturing is a process that involves the use of tools, machinery, human labor, and/or chemical processes to create commodities. The primary sector provides the basic resources that are then mass-produced into final products. These items can be sold to other manufacturers for use in the creation of more complex products, or they can be packaged as a kit. Finished products are frequently distributed to end users via wholesalers who sell to retailers.
What is kitting in manufacturing?
In manufacturing, kitting is the process of collecting parts and components into a single kit with its own SKU number. The parts, materials, or components are delivered directly to a point-of-use company, which will collect and reuse the materials. This usually entails using an assembly line to put the components of a consumer product together. Manufacturing kitting allows companies to reduce costs on warehouse space while streamlining the packing and shipping process. This enhances inventory tracking and gives manufacturers more control over their inventory.
Benefits of Kitting in Manufacturing
Reduction in Warehouse Requirements
Because warehousing and distribution providers charge by the square footage of products, a kit containing multiple items with a single SKU will take up less space than the items stored separately.
Because kits are shipped as a single item, manufacturing kitting can significantly reduce shipping costs.
The warehousing kitting process helps to promote supply chain standardization, which makes cost prediction and calculation more consistent.
Controlling Inventory Levels
Any shortages or quality control issues are resolved prior to the kit being built, so kitting in manufacturing minimizes these issues. Because you only have one thing to track, inventory levels are easier to keep track of.
Better Overall Manufacturing Process
Kitting improves manufacturing efficiency while also lowering costs and allowing for better forecasting. Manufacturing kitting also cuts down on material handling, processing times, the number of shipments to the point of use, and the amount of material storage space required for assembly lines.
It makes perfect sense for any OEM to use kitting as part of their supply chain to establish the ultimate chain supply, free up storage space, decrease costs, and increase flexibility. However, the kitting process may require a lot of effort, time, and resources to manage and ensure efficiency. Thus, many manufacturers have outsourced their kitting production to 3PL companies to focus on their core competencies, which include excellent products, profit growth, cost reduction, and production efficiency.
At NewStream Enterprises, LLC, we provide your company the kitting expertise to turn your complicated kitting process into a simple process flow, from pick to pack to ship. Unlike other organizations, where poor salaries and a hostile work atmosphere almost guarantee high turnover, our employees have the opportunity to take ownership of the firm and have direct input into how to enhance our performance and service to boost customer happiness. When you partner with a company like NewStream, you can benefit from our considerable operational expertise while remaining focused on reaching your key performance indicators (KPIs) and achieving continuous development.
Our kitting services have been fine-tuned for efficiency and will assist you in meeting your business goals. As a thought leader, we also give you practical tools for outsourcing kitting and assembly services, such as "The 10 Steps to a Successful Kitting and Packaging Request for Proposal Process." Get a free quote for kitting services from NewStream today!