Kitting Service: Definition and Benefits

Ngoc Lee
Kitting Service: Definition and Benefits
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One component of an e-commerce fulfillment process is kitting and assembly. Once properly done, it can help reduce the time and cost as well as expedite the shipping of products to clients. Pre-assembly of component parts is also necessary during manufacturing operations for many companies. 

This assembly can require a long time (as well as manpower and inventory space). Many manufacturers use the custom kitting services provided by third-party logistics (3PL) firms to save back on a significant amount of this time and expense. We posted this piece to explain the kitting and assembly process and what perks it brings to you.

What does Kitting Service mean?

A 3PL's custom kitting process is taking the component pieces of a product, assembling them into a "kit," and then sending the kit to the manufacturing facility for assembly. Kitting solutions are a strength of several 3PL companies. This competence is a result of learning, experience, as well as investments in logistics technology that guarantee complete accuracy in order pulling and inventory management. 

Kitting service makes some 3PLs competitive

You may wonder why don't companies simply create their own parts? Let's imagine yourself as a producer. You need to assemble 2,000 pcs in one day, and now you have 15 employees available to complete this task. 

How long will it take each worker to find and gather all of the components for 133 pcs (2,000 pcs divided by 15 employees equals 133 pcs each) before assembly, and then carry out their assembly tasks? 

The most common response is simply "too long" and even "too costly, not to mention lost time from mistakes, misplaced or lost parts, or overall disarray caused by volume. By using custom kitting services, you will streamline the process and eliminate this time wasted and mess. Your employees are given perfectly organized kits that include all the parts needed for a specific step in the assembly process. There is no need for pre-assembly or part-seeking. After all, your production process will be faster, simpler, and more efficient. 

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Let's examine kitting within the context of a more extensive production process:

  • Storage: It can be difficult to access a location to keep your customers' marketing materials. A kitting service will keep the supplies for you if you decide to use their services.
  • Kitting: The kitting staff will gather all the required products and assemble them into kits when an assembly is requested. Depending on what is necessary for your business, the kits can be put together in advance or on-demand.
  • Delivery: The kits are sent to the producer by the kitting service. The producer has the items during the particular time period that they are necessary, which is why this stage is also known as JIT (Just in time) delivery.
  • Production: Using the provided kits, the manufacturer's employees assemble the finished goods.
  • Distribution and packaging: The kitting service can then transport the finished goods in a bespoke package to their intended location.

In this system, the 3PL's engagement in other crucial steps of manufacture, including storage, packing, and JIT delivery, maximizes the time and efficiency gains gained through customized kitting services.

Kitting and Fulfillment Services

Most 3PL provide kitting as an added-value service in their offering of fulfillment services. 

Kitting and fulfillment services

The process of assembling various items and packing them into a single unit is known as kitting. On the other hand, fulfillment describes the complete procedure of receiving, packing, and sending orders. Kitting fulfillment services offer a variety of important advantages as part of an individual marketing strategy. These include simplifying and arranging inventory, as well as packaging optimization. Generally, kitting ensures that the supply chain runs properly and quickly.

Assembly and Kitting Services

The majority of third-party logistics (3PL) companies offer kitting and assembly. This is a fulfillment service that entails putting together things that are delivered in individual parts before customers place their orders. 

Kitting and assembly service

A future promotion that calls for an item to be bundled in a certain method in bulk or the way a product was produced or distributed may both call for kitting and assembly services.

Packaging and Kitting Services

Kitting and packaging are essential parts of fulfillment and warehousing.

Packaging and kitting services

A method that guarantees physical as well as barrier protection, decreased transportation security threats, accurate labeling, efficiency, inspections, as well as quality control is necessary for products that need to be appropriately packaged and sent. Supply chain management is greatly impacted by packaging, which includes single-part or product packaging, kitting packages, and specialized government or defense packaging. 

What Are Kitting's Advantages?

Kitting provides a lot of advantages to businesses, including cost and time savings. It is a very valuable technique in eCommerce since it allows businesses to provide more SKUs by merging smaller orders into bigger ones.

What are the Advantages of kitting
What are the Advantages of kitting

Efficiency & Organization

Kitting is an excellent technique to optimize and expedite your order fulfillment process. Kitting allows you to create fewer high-selling SKUs, making inventory management in your distribution hub easier. This may seem counterintuitive, but if you have goods that are regularly purchased together, putting them into a bundle will actually result in a reduced SKU count. This maximizes warehouse space and improves overall efficiency.

If you don't bundle your items and have to construct an order on demand, the fulfillment process may take substantially longer, causing potential shipment problems. Kitting helps to find the supplies you need for your most frequently purchased combinations, increasing the efficiency and profitability of your whole fulfillment process.

Make Your Shipping Process Easier

Bundling your items may also improve your shipping procedure considerably easier and more effective. By automating the process, you can reduce the chance of human mistakes while also shortening the average fulfillment time. Generating shipping labels as well as measuring assembled items ahead of time rather than after the order arrives can save time and money.

Enhance the packaging

Kitting is also an excellent technique to save money on packaging. You can put your things together in a custom-sized box instead of packing each single SKU individually into standard-sized packages that may be too large. This might help you minimize the size and weight of your packages.

Besides, it also saves money on supplies such as box fillers and packaging tape, which can add up quickly if your shipment volume is significant. One of the ways that kitting may help you increase your profit margin is by minimizing your packing costs. You can take advantage of customized packaging solutions by outsourcing assembly & kitting services to a 3PL supplier.

Products can be picked specifically for occasions like Christmas time or special promotions, which is a huge benefit for internet shops. This provides additional income and sales opportunities while also increasing efficiency by packing and kitting product bundles in advance so they are available before your company's peak fulfillment hours.

Reduce the cost of warehousing

A percentage of the cost of warehouse and logistics services is determined by the storage space your things require. Kitting SKUs (with bundled products) will use up less space than individual items. In warehousing, kitting methods bring a degree of standardization to the supply chain that makes cost modeling easier.

This is because each kit's contents are predefined, estimating expenses is significantly easier than if the components had to be chosen, packaged, and sent separately. You may save money on storage costs by reducing the footprint your items take up in a warehouse.

Boost Your Sales

Finally, kitting will be used as an effective sales approach. Examine related goods in your inventory, such as chargers & power strips. You need to clear space for new inventory, therefore you'd want to sell some of your available items. If you package them together and sell them as a package at a discount, you may well be able to get rid of your surplus inventory faster than if you attempted to sell the items separately.

Not only will this method of fulfillment increase sales, but it will also improve inventory turnover.

What is the process for kitting and assembly in EFEX?

Although some companies have their factory or supplier pre-kit products, which will help save time and cost, the process of kitting and assembly is an inventory task required in warehouses or fulfillment centers. In Efex, you can create a work order via the Efex dashboard to request kits. These fully prepared kits are finished and then delivered back to the storage facilities. Let's see some notes about Efex's kitting setup:

  • To submit kitting  requests, you must have your individual parts and finished kits synced and designated as available in the inventory
  • Every item mentioned in the request is in a usable state
  • Clear plastics, zip lock bags, and other supplies are not provided.  Please specify in the request in case you want us to employ bubble wrap or brown paper as the typical dunnage materials
  • We can offer materials for Efex standard packaging (boxes, poster tubes, mailers, and so on)

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Kitting is designed to meet the specific needs of your company in terms of how goods are delivered to customers. Your orders must go through the kitting process if you want the staff at the fulfillment facility to carefully pack the products in your purchase. Examples:

  • When inventory arrives, many individual parts are separated and must be put together or assembled.
  • You want us to arrange the inventory for your customers in a specific manner.

The Bottom Line

If you working with us, our Efex team will develop a kitting and assembly plan that helps you based on the requirements of your business, help you store your kit parts, and put them together for you either in advance or on-demand, right before delivery. Wait no more, contact us right away to meet our fulfillment team for further details.

Ngoc LeeNgoc Lee is an Content Creator Manager at EFEX. She wields her long-term expertise in Logistics and Supply Chain, harnessing her top-notch writing and research skills to bring incredibly valuable content. Whether you're a small startup or a well-established enterprise, Ngoc Lee is here to equip you with the essential knowledge of e-commerce, fulfillment, and all things business-related.