10 Steps to Implementing a Kitting Program

Implementing a kitting program can revolutionize inventory management and streamline aftermarket growth. In this blog, we’ll explore the top 10 steps to successfully integrate a kitting program into your aftersales strategy. From understanding the basics of kitting to training your team and measuring success, we’ll guide you through each stage.  

10 Steps to Implementing a Kitting Program

Needs Assessment and Planning:

• Identify the Purpose: Clearly define the purpose of the kitting program. Is it for assembly, maintenance, or repair? Understand the specific needs and goals.
• Analyze Inventory Data: Review existing inventory data to identify frequently used parts and components, including high wear and tear items. Determine which items are suitable for kitting.
• Assess Customer Demand and Opinions: Consider customer demand patterns and preferences. Which kits are likely to be in high demand?  Survey dealer, distributors, and end users to understand more about their kitting needs.

Kit Design and Configuration:

• Select Components: Choose the components that will go into each kit. These may include engine components, drive train parts, hardware, tools, and instructions.
• Standardize Kits: Create standardized kits based on common tasks or procedures. Avoid excessive customization to maintain efficiency.
• Create Bill of Materials (BOM): Document the list of components for each kit. Include part numbers, descriptions, and quantities.

Supplier Collaboration:

• Engage Suppliers: Collaborate with suppliers to ensure timely availability of kit components. Negotiate pricing and terms, as well as quality metrics.
• Vendor-Managed Inventory (VMI): Explore VMI arrangements where suppliers manage inventory levels and restock kits as needed.

Packaging and Labeling:

• Choose Packaging: Select appropriate packaging for each kit. Consider branding, durability, protection, and ease of handling.  Kits for retail purposes may include branding guidelines while kits meant for distributor warehouses may need a less costly option, such as white boxes, corrugate, and basic labeling.
• Label Kits: Clearly label each kit with a unique identifier, contents, and usage instructions. Barcode labels facilitate tracking throughout the kitting process and total supply chain.

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Logistics and Distribution:

• Warehouse Layout: Allocate space for kitting operations within the warehouse. Organize shelves or bins for easy access.  If space is not available, look to outsource kitting to a third-party logistics provider (3PL) with industry experience.
• Kit Assembly Area: Set up a designated area for assembling kits and train staff on proper assembly procedures.  As mentioned above, utilize the expertise of a 3PL already setup to provide these kitting services to your market.
• Distribution Channels: Determine how kits will be distributed—directly to customers via eCommerce site, through dealers, or via service centers.

Quality Control and Testing:

• Quality Assurance: Implement quality control checks during kit assembly. Verify that all components are accurate and meet specifications.
• Functional Testing: Test assembled kits to ensure they function as intended. For repair kits, simulate real-world scenarios.
• PPAP Testing: Production Part Approval Process (PPAP) is a valuable tool for ensuring quality with component and packaging suppliers. Many OEMs have a standardized PPAP process to help with on-boarding new kits. Others may utilize the resources at their designated 3PL to help them through the process.

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Inventory Management:

• Replenishment Strategy: Establish reorder points and safety stock levels for kit components. Monitor inventory levels and reorder as needed.  OEMs may also employ the help of a 3PL to take over procurement and the associated replenishment strategy.
• Kit Lifecycle Management: Regularly review and update kits based on changes in product design, customer feedback, or market trends.

Documentation and Training:

• Kitting Instructions: Develop clear assembly instructions for each kit. Include step-by-step procedures and visual aids.
• Training Programs: Train packaging specialists involved in kitting on best practices, safety protocols, and efficient assembly techniques.

Performance Metrics and Continuous Improvement:

• Metrics: Define key performance indicators (KPIs) related to kitting efficiency, accuracy, and customer satisfaction.
• Feedback Loop: Gather feedback from users (technicians, dealers, service centers, or end customers) to identify areas for improvement.

Launch and Promotion:

• Internal Launch: Communicate the kitting program to all relevant departments within the OEM organization.
• External Promotion: Promote the availability of kits to customers through marketing channels, catalogs, and sales teams.

Whether building a kitting program from scratch, enhancing an existing one, or deciding to outsource kitting, by following these steps, an OEM can successfully implement a kitting program that streamlines processes, enhances customer experience, and contributes to overall operational excellence. 

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About NewStream Enterprises, LLC

Whether kitting for critical orders, fulfilling your rework needs, shipping direct to customers, or supplying your distribution channel, NewStream leverages shared resources to provide cost-effective kitting solutions. 

Contact our team for a free quote or call (417) 831 3112. We understand that quality, fill rates, and on-time delivery are crucial in today’s economy, and we deliver with exceptional performance.