Kitting is one of the core elements of effective supply chain management. By combining multiple components into a single package, or “kit,” you can improve your operational efficiency, speed up manufacturing and shipping, and reduce an enormous amount of material and labor waste. Embracing kitting in logistics means saying goodbye to part shortages, long lead times, and other headaches. So, what is kitting in logistics? Read on to find out how this strategy can transform your business.
Exploring Kitting in Logistics
Understanding Kitting in Logistics
Have you ever ordered a piece of build-it-yourself furniture only to have the box arrive with an important part missing? Fulfillment errors are frustrating for consumers, and they can be downright disastrous for a company’s reputation. Kitting dramatically reduces fulfillment errors and improves the customer experience.
Kitting in logistics involves assembling multiple products into a single kit, usually prior to order fulfillment. In other words, instead of assembling individual spare parts, you can create a kit that is typically sold under one SKU. That way, when orders come in, pre-assembled kits are ready to ship to customers’ doorsteps. Without kitting logistics, warehouse workers must track down separate items when an order arrives, creating room for human error and potentially jeopardizing customer orders. That time spent “picking” the correct parts from bins in a large warehouse can eat into workers’ days, taking time away from their overall professional development and reducing company efficiency.
Benefits of Working with a Third-Party Logistics Company
Outsourcing your kitting and packaging needs to a third-party logistics company (3PL) will allow you to focus on big-picture ways to boost your business. A 3PL like NewStream can help you accomplish the following:
- Improve the customer experience
- Reduce stress on fulfillment workers
- Ensure quality control, even in complex multi-piece orders
- Simplify your manufacturing process
- Save money on shipping multiple parts
- Reduce warehouse “picking” times
Our Approach to Kitting in Logistics
The supply-chain experts at NewStream know the importance of logistics tools like kitting. Not only do we offer consistent services you can trust, but we also work hand-in-hand with all of our partners to ensure success. Additionally, our continuous research processes are constantly evolving, finding new ways to reduce waste, damage, and costs to your business. Don’t believe us? Check out the following success stories:
- Annual savings of $95,000: In a partnership with a construction equipment manufacturer, NewStream’s innovative kitting solutions led to a 71 percent reduction in the material cost for the company’s top ten part numbers, resulting in total annual savings of about $95,000.
- 4-day product turnaround: Partnering with an on/off highway OEM, NewStream managed to turn product in an average of 2.4 days, consistently beating the OEM’s three-day goal. This led to a 75 percent decrease in the total customer backlog over a 60-day period, boosting customer satisfaction in a major way.
Kitting might not seem like a revolutionary business practice, but logistical improvements like this one really add up, especially for customers with a high volume of manufacturing and shipping needs.
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So, what is kitting in logistics? Put simply, it’s a great tool to consolidate your packaging options and streamline your business, improving your customer satisfaction — and your bottom line.
Ready to take your business logistics to the next level? As a 3PL with over 30 years in comprehensive supply chain management, NewStream understands the importance of kitting for your business. Our team of experts is equipped with the knowledge and technology to help set your business apart from the rest and focus on all your kitting needs.
Want to hire experts to handle your logistics? Contact NewStream today!