Imagine going to a deli and trying to order a BLT, only to find out that the menu lists toast, tomatoes, bacon, lettuce, and mayo as separate items that you need to purchase individually. Even if the person behind the counter assembles your sandwich before serving you, this is a more involved and irritating process than being able to ask for a BLT. This, in a nutshell, is the principle behind kitting in logistics.
Kitting enables companies to fulfill orders faster and with more efficiency. It’s based on the idea that many SKUs end up being purchased at the same time and therefore could be packaged and stored together. In today’s world of online shopping, global commerce, and heightened customer expectations, kitting is a critical component of a high-functioning warehouse.
Read on to learn more about the kitting process and how it could lead to better results for your fulfillment operations.
WHAT IS KITTING IN WAREHOUSES?
Although many purchases often include one item at a time, there are plenty of situations in which a shopper may assemble an order consisting of multiple SKUs that are closely related to each other. For example, someone purchasing a new television may also be interested in HDMI cables to connect it to a media player or video game system. He or she also might want to add a mounting bracket so the TV can hang on a wall. Another related add-on could be a set-top box for streaming video.
In a standard fulfillment scenario, each of these products is located within the warehouse, picked and packed, and the inventory is updated. The same process is repeated for the TV, the cables, the bracket, and the streaming box. When the order arrives at the customer’s home, it may be in multiple packages. This can certainly be seen as a success, but it’s not as efficient as it could be.
Kitting anticipates these situations. It consolidates items that are frequently purchased together into a single SKU. In the example above, a retailer or distributor may package the television with the HDMI cables, the mounting bracket, the streaming device, and possibly other related products such as batteries or a universal remote control. This means that instead of hunting down several units every time such an order is placed, workers only need to find one package.
Kitting isn’t just used for items that are frequently bought together; it is also used to create gift packages, subscription boxes, and other bundles. A common example is a multipack of DVDs or Blu-Rays that combine several seasons of a TV show, or a toolbox that comes with hand tools already included.
HOW DOES KITTING BENEFIT YOU?
What is kitting’s primary advantage? Simply put, it streamlines and simplifies numerous aspects of your supply chain. However, drilling down into the process reveals numerous benefits that can help reduce your overhead, improve your customer service, and make you a stronger operation overall. Here are just some of the ways in which kitting can impact your company:
- Reduce labor: If your warehouse staff doesn’t need to spend as much time picking and packing individual items, they can concentrate their energies in other areas. This means you may not need to have as many shifts, so you can devote your resources to growth or making improvements elsewhere within your organization.
- Build efficiencies: It should go without saying that you can ship one package faster than three or four. Creating kits can help save precious time, which could have a cascading effect throughout your facility. Shortening the cycle time for one order means you can process the next one sooner.
- Organize inventory: The fewer SKUs you have in your warehouse management system, the easier it is to stay organized. Plus, you gain more flexibility when it comes to planning your layout, giving you a chance to have the most optimized floor plan possible.
- Satisfy customers: Consumers love finding a deal. If you can offer more than one item in a special discounted package, you could stand a better chance of making a sale. The convenience and value of these kits not only makes fulfilling orders easier for you but also more attractive for your customer base.
WHO NEEDS KITTING SERVICES?
Virtually any type of supplier or retailer can take advantage of kitting in their operations. For example, boutique candy companies can create gift boxes. Electronics suppliers can kit components for home entertainment systems or computers. Companies that provide subscription boxes can utilize kitting to create their packages. Retailers that serve more than one market worldwide can benefit by supplying different power adapters or other accessories to suit each individual territory. There are virtually endless possibilities with kitting.
WHY CHOOSE WSI?
As an innovative leader in the third-party logistics space, WSI provides comprehensive kitting services for your business. When you outsource through us, we work hard to make sure your packages contain the proper items and make the entire process easier for you. Our experience and expertise with all types of warehousing and fulfillment make us the ideal partner for you. To learn more about our services, get in touch with us today.