Inventory management is a challenge across many businesses. Packaging, warehouse space, and slow-moving products can all plague a company’s efficiency and increase overall expenses. More and more businesses are resorting to kitting as a solution.
What is kitting, and what would it look like at your company? Continue reading, and we will dive into this beneficial technique, including how we, at MDI, utilize kitting to achieve your company’s goals.
Kitting is an inventory management technique that adds efficiency and cost-effectiveness to your supply chain, all while increasing revenue and customer satisfaction. This technique refers to grouping a predetermined selection of related products into one “kit” that is sold with its own unique SKU number. Simply put, you create and sell a box full of products as one item instead of selling multiple products in separate packages.
Beyond the package consolidation benefit, the kitting process also provides opportunities to push slow-moving products, increase order values, and minimize order mistakes. With pre-assembled kits, your business is a lot less likely to get an order wrong!
Better order accuracy, expedited shipping time, added products in their purchases, and bundled savings result in customers who are also big fans of kitting.
Businesses can take on the kitting and assembly process themselves, or they can choose to outsource this service to a kitting specialist.
Kitting in Action
The kitting and assembly process is adaptable to each company’s needs.
- You will choose your kit’s contents. Your intention with your kit often informs this step. Are you trying to market new products by grouping them with some bestsellers? Perhaps you are trying to create a convenience kit that includes products customers typically buy together, or you want to push old products you need to sell.
- Once you have designed your kit, the next step is to decide who will assemble the kits. Many businesses do this themselves or outsource this to a kitting service provided by a product specialist. If you choose to outsource, leave the rest of the work to your kitting specialist.
- You will assign a unique SKU number to your kits. This step will allow the kits to be packaged, sold, and tracked.
- Following the creation of the SKU number, it is time to assemble the kits. Depending on your company’s preference, you can choose to pre-assemble the kits or organize the kits’ items near each other in the warehouse. Either option helps quicken the picking and packing of the kits.
- And just like that, you are ready to ship your kits! Your customers will be satisfied with the convenience of multiple products, faster shipment, reduced order mistakes, and overall savings! You will be happy to see an increase in product flow, higher value shipments, plus reduced packaging and labor costs.
Problems Solved By Kitting
In general, a business first determines whether kitting will benefit its product flow by identifying the areas of improvement. Do your customers need help choosing multiple needed items for a specific task or occasion? Are you struggling to fulfill a seemingly never-ending demand for single-item orders? Do you have certain products, new and old, you would like to push?
Kitting mitigates all of these problems and more. Here are some benefits you will enjoy when you incorporate a kitting and assembly process into your company:
Kitting Allows You to Streamline Packing and Shipping
Establishing a kitting process means fewer stops along the way. Packers are less likely to make a mistake, and they can assemble and ship the product much quicker! Kitting helps you save time and minimize errors.
Use Your Warehouse Space More Wisely With Kitting
Whether you opt to pre-assemble your kit or group all the kit items in close proximity, you are using your stock space more efficiently. Your packers are not running around to all corners of the warehouse to fulfill each order.
Minimize Labor Costs
With reduced time spent on each order comes lower labor costs. When they don’t have to do hand assembly, your valuable employees can focus on doing other important work.
Fewer Shipments = Lower Shipping Cost
It costs significantly more to ship five individual packages than to ship one consolidated package. Your customers will also receive their order faster as it is in one package. You can’t argue with a faster and more cost-effective process.
Expect Increased Sales Revenue
With kitting, you are selling higher valued orders and more products overall. Watch the numbers increase with kitting.
Customers Save, Too
Your customers are saving money by buying multiple items as a kit rather than separately. Plus, they’re satisfied with additional products. Everyone wins.
Increase Product Flow
Push old products that are not selling by including them in kits. You can also market new items by kitting them with best-sellers.
Kitting Is an Opportunity to Get Creative
A kit is a great way to incorporate protective layering into your shipment if you have fragile items. Kits make excellent subscription boxes as well. Open the door to all sorts of savvy designs and marketing hacks with kitting.
Consider Outsourcing for Additional Benefits
Outsourcing the kitting service can solve time, personnel, and warehouse space shortages that would otherwise prevent you from utilizing kitting.
Outsourcing Your Kitting and Assembly Needs
Many companies choose the route of production outsourcing. Kitting and assembly needs are no exceptions. Despite the glaring benefits of incorporating kitting into your business’s product flow, you may not possess the staff, warehouse space, specialized equipment, or extra time needed to assemble, package, and ship kits. That’s where kitting and assembly specialists, like MDI, come in.
Your kitting specialist will collect your products and take care of the assembly, SKU number assignment, packaging, and shipment. Consider outsourcing your kitting process for specially trained staff, dependable equipment, vast warehouse space, and quality assurance.
Different Types of Kitting
Kitting is a lot more complex than bundling items into one package. Countless factors go into an effective kitting and assembly process. Plus, each company will have different circumstances that make kitting unique to each business.
That said, there are different types of kitting designed to accommodate every business’s game plan. Production specialists categorize kitting into different areas of emphasis: assembly, packaging, labeling, and even medical devices are all kitting subgroups.
If you choose to outsource these services, you can ask for the specific kitting type that best fulfills your company’s needs. Here are some different kitting types explained.
For projects that require hand assembly and packaging, look to hand kitting and assembly services. Any good kitting specialist knows you have a lot on your plate, and putting packages together takes valuable time and energy. Be sure to find an outsourcing company that specializes in this sort of assembly so that you can allocate your time to other duties.
Have you already kitted your products? Leave the packaging to your kitting specialist! Implementing kitting and packaging services will help lower picking and packing kitting expenses.
An accurate label is crucial to your company’s reputation and product flow. Labeling errors cause obstacles. When outsourcing kitting and labeling, look for a team of highly trained professionals who know how to avoid labeling mistakes.
Medical Device Kitting
Kitting is not just for retail bundles and gift packages. Medical device kitting allows healthcare device companies to improve efficiency and revenue without compromising the products’ integrity.
Be on the lookout for a kitting company with pristine, controlled environments and highly trained staff necessary to accomplish this serious task. Businesses that serve healthcare workers can expect all sorts of medical kits, from PPE assembly to vial containers.
Ensure a Proper Kitting Process
While kitting can be a game changer for a business, there is no room for error. It must be done correctly, as mistakes in the kitting and assembly process can be a serious detriment. With that in mind, companies may shy away from this lucrative technique out of fear it could be more trouble than it is worth.
Here is where companies like MDI come in. Choosing to outsource your kitting process to a production service company will ensure that kitting is done right for your business.
Get Kitting Today
Kitting and assembly services are excellent tools to boost efficiency and overall revenue within any industry. Not only will kitting help you cut shipping and labor costs, but you will also sell more products at higher values and reduce production errors. On top of this, your customers will be satisfied with more products, bundled savings, and faster shipping times.
All that said, kitting may be a daunting task, especially for small and medium-sized businesses with limited resources. Outsourcing this service is the best option for incorporating kitting while mitigating the limits on staff, warehouse space, equipment, and time.
At MDI, we proudly outsource kitting and assembly services. We provide professional, dependable, and customizable kitting. All of our efforts are to improve your business’s bottom line. For more information, fill out our form to request a quote for services.