In a world driven by unrealistic customer demands, efficiency is key. Kitting in warehouses can save companies a lot of money, time and effort. It replaces picking and packing individual items from inventory while maintaining an efficient fulfillment process. With warehouse management systems in play, you have the right order-picking strategy.

Compare Top Warehouse Management Software Leaders

What This Article Covers:

• What Is Kitting?
• Significance
• Top Benefits
• Processes Involved
• Tips To Improve
• Conclusion

What Is Kitting?

Kitting is a method or technique that gathers and combines a list of related or individual goods or stock-keeping units (SKUs) to create a single unit or kit. For example, if a customer orders an engine overhaul kit, the seller may select parts such as seals, pistons and rings and pack them together. This kit becomes one SKU.

Warehouse kitting involves multiple steps requiring effective solutions, including automation. Instead of having manual workers gather, sort and assemble items into kits, a well-executed process can save labor time and improve overall productivity.

Automated kitting is achievable by selecting a WMS that incorporates seamlessly with automated storage and retrieval systems (AS/RSs). This type of warehouse automation technology organizes items and stores them in bins or trays. Once these items are ready to assemble, the operator can use the ASRS for picking, packing and order processing.

In warehouses, the kitting process brings several benefits to the table. It enhances order fulfillment processes by minimizing costs and reducing lead times.

Kitted items are easier for pickers to identify and pick for shipping rather than selecting individual SKUs.

Difference Between Kitting and Bundling

Kitting and bundling are often mistaken for the same thing. Although they both involve grouping a set of items or products for shipping, they’re still not the same. Kitting involves grouping different products and categorizing them under one unit.

Some examples:

• A gift set with items like body lotion, shower gel, face masks and more.
• Grouping marketing items together to accompany a single product.
• Bicycle accessories.

Bundling groups multiple identical items to create a product bundle. Typically used for special occasions, promotional offers and during holiday seasons. For example, a retailer might promote deals that convince consumers to purchase up to three or four of the same product at discounted shipping rates.

Both processes save companies money while increasing profit rates for online retailers.

Significance

Most warehousing and manufacturing industries use kitting to increase revenue, reduce costs and improve overall operations productivity. This technique is well-suited for production businesses that require multiple items combined as a single product. It’s also suitable for manufacturers with limited storage space.

An effective and efficient fulfillment process is achievable by integrating kitting processes into your warehouse and inventory management systems. However, how you handle your kitting and bundling will entirely depend on the type of inventory goals you’re seeking to achieve.

To get the best picking results, you must ensure that the grouped items have a unique SKU. The WMS and inventory management systems must also be capable of tracking individual SKUs if there’s a demand spike. Kitting guarantees a streamlined and efficient fulfillment process. It makes it easier for pickers to locate items without hassle.

Get our Warehouse Management Software Requirements Template

Primary Benefits

Kitting offers various significant benefits to the warehousing and manufacturing industries. However, it’s also important to highlight the value it brings to the overall business.

Minimize Storage Costs

Services that provide warehousing space charge according to square feet or storage volume. However, with kitting, businesses can use less storage area for products. Your kitted items take up less space and save on storage fees.

As a result, it optimizes space utilization while minimizing production costs.

Enhance Efficiency

Combining multiple SKUs into one unit reduces total inventory quantities. Although it doesn’t reduce the number of products, it lowers unit numbers. For example, collecting three light bulbs and placing them under one unit or SKU doesn’t alter the number of bulbs you’re shipping but changes the unit you’re managing.

Based on your warehousing practices, kitting helps businesses remain organized and efficient throughout production.

Optimize Storage

Most manufacturing operations follow a lean production model to eliminate waste. In such instances where third-party logistics (3PLs) fulfill kitting services, these processes reduce waste by minimizing storage area. Kitted items require less packaging, thus creating more space to store other units.

Boost Sales

Strengthen sales strategies by improving cash flow and average order value. Customers who find kitted items bundled at a discounted price are more likely to purchase them. It increases revenue and improves operational efficiency for multichannel eCommerce businesses.

Reduce Packaging Costs

Normally, items packed individually are expensive compared to kitted items. Single items take up more packaging materials since they’re packed individually into standard-sized boxes. While kitting allows you to pack more than one item into a single unit, making it cost-effective.

Compare Top Warehouse Management Software Leaders

Processes Involved

As simple as the process seems, you need to follow a series of steps to do it right.

1. Determine Items to Kit Together: You can select items based on product usage, color or any other shared quality you think your customer prefers. For detailed information, you can browse historical data and extract insights that benefit your process.

For example, historical data can provide information about items that customers prefer buying together or new products with discounted rates.

2. Create SKUs: These kitted items require identification; you’ll have to assign a unique SKU as you move inventory. Once kitted, they represent a single product. Your inventory management system must be able to track SKUs for better insights and physical inventory counts.

3. Locate Items: Companies can preassemble kits to enhance picking efficiency and reduce costs.

4. Assemble Kits: You must relocate all the items in the kit to your warehouse for further bundling and processing.

5. Sell and Ship: These kitted or bundled items are ready for sale and shipping. Once they’re out of your warehouse ensure your order entry system is in place to run fulfillment processes successfully. This process is where you can start tracking revenue and profits.

Compare Top Warehouse Management Software Leaders

Tips To Improve The Process

A clearly defined strategy is key to successful kitting. But how do you ensure you’re following the right approach? After all, a strategy is only as good as the system that implements it. The following are three tips businesses can implement to improve their kitting process.

Implement a WMS System

Implementing a robust WMS can effectively change your inventory management. It allows you to track inventory, enhance accuracy and optimize component management. As stressful as order fulfillment is, a technique like kitting provides an extremely efficient way for retailers to fulfill orders on time.

Some of the most popular vendors in the market industry are Manhattan Supply Chain, Oracle WMS, Fishbowl Warehouse and more.

Initiate a Trial Run

Don’t start big. It will only waste your time and money. Instead, begin by making small SKU runs that are affordable and marketable. Start by taking up a trial test project. This process will give you enough time to monitor your kitting and detect pitfalls before upscaling.

Track Results

Failure to track results is a common mistake most businesses make. Before you start your kitting process, you must develop a system that stores data to track accuracy and efficiency.

With data and information, tracking the results of your process is possible.

Compare Top Warehouse Management Software Leaders

Conclusion

Kitting is more than just an efficient order fulfillment technique. This process plays a significant role in streamlining your business. Warehouse managers should look closely at implementing robust warehouse management systems to fulfill the needs of kitting and bundling operations.

Besides facilitating operational efficiency, kitting also strengthens customer satisfaction by offering customers an attractive collection of listed items at an affordable price.

How has kitting helped grow your business? Tell us in the comments!