Kitting and assembly service is a strategic process often employed within the manufacturing and distribution industries. The omission of such services could present several operational challenges for businesses, like longer processing times and excessive labor costs.
As defined by the International Warehouse Logistics Association, kitting and assembly is a service in fulfillment and distribution where individual items are grouped and packaged together as one unit. This service becomes even more efficient when businesses choose to outsource to a 3PL, rather than have the operation in-house.
We’ll discuss what kitting and assembly is and how using it can benefit a business’ overall operations.
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Kitting and assembly is a service that businesses frequently use for their fulfillment operations. This logistics function helps companies send orders efficiently and quickly to their customers.
Kitting refers to the process of taking individual items that are often used together and bundling them as a unit. For example, a computer manufacturer might kit a monitor, keyboard, and mouse together as one product.
Assembly involves taking multiple parts and assembling them into a final product. In the computer example, this could mean installing hard drives and other parts that make up the device.
There are a variety of products that shippers distribute which might require this service, such as:
All businesses will require this service at some point during their operations due to the wide variety of goods that have to be assembled and shipped together.
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Without assembly packaging and kitting services, many businesses would fall behind in their ability to fulfill orders. Thanks to this operation, many companies can enjoy an assortment of benefits.
Thanks to each of these benefits, businesses will be able to focus on other areas of their operations.
Kitting and assembly can play a vital role in streamlining business operations and improving fulfillment optimization. This efficiency not only saves time, but can significantly improve the productivity of order fulfillment.
There are several factors that contribute to the streamlined effect that comes with kitting and assembly:
Instead of handling items individually, batch preparation minimizes the time and effort spent on single orders and enhances workflow efficiency. Kitting and assembly services allow a business to bundle multiple products together. This reduces the amount of handling workers have to perform to prepare shipments.
The assembly of multiple components into a single product simplifies the order fulfillment process. When an order comes in, the pre-assembled product is ready to ship. This saves a considerable amount of time and effort.
In the fast-paced world of logistics and fulfillment, avoiding errors is crucial. Mistakes in packaging can result in returns and customer dissatisfaction. Kitting and assembly services can prevent this from happening in a variety of ways.
In the kitting process, items that often go together are pre-packaged into one unit. This drastically reduces the chance of an employee forgetting to include an item in the order or from placing an incorrect item in the shipment.
As the goods are bundled together, a quality check can be performed before the kit is sealed. This extra layer of control ensures that the correct items are included and reduces the chances of errors. With pre-assembled kits, the order fulfillment process is simplified. The need to pick individual items is eliminated and the possibility of picking errors are reduced.
Efficient inventory management is the backbone of any successful logistics operation. Proper handling of products ensures that the right goods are available when they’re ordered. Kitting and assembly services can be instrumental in optimizing inventory management.
This is done by:
When items are kitted, they are accounted for as a single unit rather than individual items. This significantly reduces the number of SKU's (Stock Keeping Units) that need to be tracked. This simplifies inventory management for businesses.
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As kits are usually assembled based on demand, the process of kitting can provide valuable insights into sales trends. This allows for more accurate forecasting and better inventory planning.
Kitting items together can also optimize the use of warehouse space. Bundled items often take up less room than when stored individually. Therefore, warehouse storage space is better utilized.
Businesses are always looking for ways to eliminate or reduce certain costs. Companies will always have to pay the transportation expenses to send their goods to customers. Fortunately, kitting and assembly services can play a significant role in helping businesses lower their shipping costs.
Using this service can reduce expenses in the following ways:
By bundling items together into one kit, the overall volume of packages can be reduced. This can lead to lower freight costs because fewer packages have to be transported. Kitting allows for more efficient packing of items.
This results in:
Many carriers charge rates based on these factors. Since packages will be smaller and take up less space, shippers can expect to pay less for these services.
Labor costs can take up a significant portion of a company's expenses, particularly in logistics operations where manual handling of goods is common. Kitting and assembly services offer a practical way to reduce these cots. This can also make work easier and more efficient for warehouse employees to perform.
The ways assembly and kitting services can reduce labor costs include:
Kitting and assembly allows for more efficient order processing. Rather than picking and packing multiple individual items for each order, workers handle pre-assembled kits. This helps save a considerable amount of time and effort.
Bundling items together reduces picking and packing. Doing this also decreases the amount of labor required per order. Kitting often involves preparing goods in batches during quieter periods. This allows labor to be effectively allocated and reduces the need for additional labor during peak times.
Customers want their items as quickly as possible. Therefore, it’s important for businesses to speed up their order processing. Orders that are shipped quickly will satisfy more customers and bring in future sales.
Kitting and assembly services help reduce processing times in the following ways:
Kitting requires preparing items before the goods are shipped. When an order comes in, the pre-assembled kit is ready for transportation. This eliminates the time-consuming process of picking and packing individual items.
The process of handling, packing, and shipping a single kit is far less complicated and time-consuming than dealing with individual products. This reduces the amount of effort businesses will need to put in to process shipment.
Our article on 3PL track and trace will show you how to monitor your freight while it’s stored in a warehouse.
Some companies use their own kitting and assembly services. However, other businesses can’t afford to incorporate this operation in-house. Therefore, many companies opt to hire a 3PL to perform assembly and kitting services on their own.
However, there are a few considerations that businesses will need to think on. First, is making sure they’re working with an actual provider of kitting and assembly services.
Business that look for these characteristics in a 3PL will be able to find a reliable kitting and assembly services provider.
Pricing is a critical aspect to consider when evaluating kitting and assembly services offered by a 3PL. That said, it’s important that businesses remember that a low price doesn’t always mean the work provided will be stellar.
Good 3PL providers should offer transparent pricing. All costs related to the kitting and assembly services should be clearly outlined.
There should be no hidden fees or unexpected charges when a business hires a 3PL for this service. Understanding the pricing structure is crucial. Some 3PLs may charge a flat rate for kitting and assembly services. Other providers may have a more variable pricing structure, depending on different factors.
Many 3PLs have estimation tools or quotes that customers can fill out to determine how much it will cost to use their services. Businesses should also consult these tools before outsourcing this operation.
The quality control (QC) procedures that 3PLs employ when performing kitting and assembly management should be a top consideration. Businesses need the reassurance that their goods will arrive at the customer’s doorstep in acceptable condition. Many 3PLs have an inspection process in place at various stages of kitting and assembly.
This QC policy consists of the following steps:
As this plan shows, inspection occurs throughout the entire kitting and assembly process. This ensures that goods are in top shape before, during and after the service has been completed.
Technology and infrastructure are integral components of a successful kitting and assembly service. Businesses must understand a 3PL’s capabilities in this department before they hire one.
Technological and infrastructure features they should look at include:
A state-of-the-art WMS is essential for kitting and assembly services. It should provide real-time visibility into inventory levels and other vital data information. Automation is another important factor to consider.
Robotic assembly and storage can speed this service along and shorten the amount of time it takes to ship goods from a warehouse. Another factor for businesses to consider is integration capabilities. This means is that a 3PL should be able to combine their systems with their customer’s programs. This ensures that data regarding kitting and assembly is shared efficiently.
Finally, every 3PL should have the space for storage and assembly. Goods will need room to be stored before being ordered. Once a business has made a sale, their 3PL should have the room to provide assembly.
A 3PL that’s suitable enough to perform kitting and assembly should have the geographical reach a business requires. Numerous companies sell to buyers all over the country.
Such companiesshould look for 3PLs that have:
Depending on your market and customer base, you may need a provider that can handle local and national distributions. A 3PL with extensive geographical coverage can help serve the needs of various customers.
A kitting and assembly services provider should also be located near major transportation hubs.
This includes places like:
3PLs that are close to locations like these will be able to ship off kitted and assembled freight quickly. Another important fulfillment service is the putaway process. Read our article on the topic to learn more.
The price of kitting and assembly services can vary based on a variety of factors. Expenses for this operation will be considerably higher if businesses choose to conduct it in-house. However, kitting and assembly management services will be much cheaper if a company hires a 3PL to perform this service for them.
We’ve included some data of the costs that shippers will incur when they outsource this vital operation.
$30 per hour
$50 per hour
$10 per hour
$5 per kit
Depends on shipping option
Provided by BlueCart
It’s important to note that these costs are averages. Actual expenses will vary based on the 3PL company chooses to hire. Nonetheless, these costs will be lower than what a business will incur if they try to complete this operation themselves.
Fulfillment and Distribution is a 3PL that has years of experience in the industry. With facilities throughout the U.S., we have the ability to perform kitting and assembly operations on a massive scale.
In addition to this, we also provide the following:
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