Are you exploring the option of outsourcing order fulfillment and product shipment for your company to gain faster delivery times and give better customer service? If so, you are on the right track!
You may have some questions about why using a fulfillment center is a good option for you. Elite Ops is here to give you the answers to your questions, so you can make the best decision for your business and help it thrive without experiencing painful growing pains. So let’s dive into everything you need to know about!
What Is Kitting and Assembly?
Fulfilled by most third-party logistics (3PL) providers, kitting and assembly refers to the process of compiling individual parts of a product together into a “kit” and delivering it to the production operation for assembly and shipment.
The demand for kitting and assembly services primarily lies in the way a product is manufactured or shipped. There might be a promotion that requires an item to be packaged in a set. For example, during the holiday season, a make-up company may offer a gift bag with lipstick, mascara, and sample-size lotions with any purchase of 50 dollars or more. Since each of these items could be coming from different suppliers, this may require the business to hire a kitting and assembly service to arrange these unique packages.
Products that are typically served well by kitting and assembly services are:
- Product Samples
- Nutritional Supplements
- Subscription Box Programs
- Multi-Level Marketing Kits
- Training Materials
- Media Kits
- Healthcare Enrollment Materials
What Is the Kitting Process?
Understanding the logistics behind kitting is vital in knowing how you should streamline your packaging and distribution needs. Kitting (also called “product bundling”) is a service that focuses on pre-assembling two or more related items into one unit. For example, rather than selling a pen and notebook separately, the two items are packaged together and sold as one item or a “kit”. Both items are then automatically decremented from inventory.
When an order comes in for an individual product, there’s a unique code or SKU (stock keeping unit) that allows staff members to identify and retrieve the product in the warehouse. The employee retrieves the item and updates the inventory before sending it out for delivery.
With kitting services, you work on packaging items together to create one single unit in your inventory. Instead of each individual product receiving an SKU, each set is assigned a code. As a result, when orders come in, the items are already pre-assembled and ready for operators to package and ship off.
What Is Assembly?
Assembly is the process of arranging all the components of a “kit” from the kitting process and readying it for shipment. For example, the pen and the notebook are both gathered, packaged together, and shipped as one item. Some fulfillment centers use an assembly line to carry out assembly services in bulk. This typically involves a team of employees, each performing a single task. The product is passed down the line to the next worker until the final product is put together.
Once the kits are fully assembled, they are either shipped out to the customer or put in their storage spot for future incoming orders.
Benefits of Kitting and Assembly Services
Kitting and assembly is an extremely advantageous tool, especially in the eCommerce industry for the following reasons:
Improves Productivity and Labor Costs
Incorporating a kitting and assembly into your operations reduces the time handlers/operators spend looking for each item. Because they are grouped as a single unit, you can speed up production and reduce costs. Instead of scrambling and wasting time to find all the different components of a shipment, your staff can simply grab a single packet and complete their work efficiently.
Orders Are Fulfilled Faster for Less
When products are assembled in bulk, order fulfillment becomes quick and pick/pack costs are reduced, as each kit is counted as one SKU. Preparing and sending off pre-assembled kits to production before orders come in can also save time and reduce fulfillment errors.
Shipping Mistakes are Reduced
The chance of error goes down when items are shipped in kit form. Also, weighing and labeling individual items is eliminated, making it possible to pre-print shipping labels. Each eliminated step also eliminates a chance for error. Postal costs are also reduced when kits are packaged in boxes that are uniform in size and weight.
Helps Control Inventory
Kitting streamlines the inventory process. With fewer SKUs, kitting can help you locate your inventory effectively. This creates more organization in your operations and more warehouse space that can be devoted to production!
In addition, if you have idle inventory and want to get items off their shelves, you can add these products in a kit with other related merchandise that is in high demand. This can create an effective cost-containment inventory strategy, helping you generate steady revenue.
Helps Out Startups and Small/Medium-Sized Businesses
If you’re managing a startup or small/medium-sized business, chances are you’ve got your hands tied trying to keep your businesses afloat. Not to mention, you probably don’t have the space nor the manpower to assemble all of your products together.
By relying on a 3PL for kitting and assembly services, you can streamline your operations and ensure that you’re providing your shoppers with accurate, consistent, and relevant products. This can help:
- Foster customer satisfaction: By combining compatible products, you’re essentially simplifying customers’ choices and reducing their need to spend time researching related products they may need. It lowers return rates and creates happier customers. And who doesn’t like receiving a package of items that work well together?
- Provide a competitive advantage: If you package your products differently than your competitors and/or offer unique products, this can help you stand out from the crowd.
How Is Kitting Different from Bundling?
Both terms are mistakenly used interchangeably, so it’s important to hash out their differences. The difference between kitting and bundling lies in the types of products that they carry. If a unit carries a combination of various items, this is referred to as a “kit.” But if it carries two or more of the same item, this is called a “bundle.”
Kitting and Assembly: The Production Process
When looking at the kitting and assembly in the production process, there are five parts:
- Storage: The manufacturer or business stores its inventory of individual items/products with a 3PL.
- Kitting: When an order comes in, the 3PL takes the individual items and pre-assembles them together into kits.
- Delivery: This stage includes a just-in-time (JIT) delivery service, which sends the kits for final assembly by the production operation team. Passing the kits on to this team frees up shelf space for minimal inventory, and ensures the goods are delivered on time.
- Production: The kits are sent to the production operation team who assembles the products together, creating the final product.
- Packaging and Distribution: During this phase, the final product is packaged and shipped out to the customer.
Why You Should Use Elite Ops for Kitting and Assembly
For a streamlined process that will bring you peace of mind, Elite Ops is the perfect solution for your kitting and assembly service. We’re here to answer all of your questions and be your go-to for any type of job. Serving the Utah and Atlanta areas, we can:
- Work with print, electronic, and point-of-sale items.
- Order all your components from your supplier(s).
- Coordinate routes and schedules.
- Ensure quality by performing incoming, in-process, and final inspections.
- Meet your delivery dates.
- Stock finished products for future use.
- Offer support along the entire process, from design (die-cut boxes, custom-built boxes, etc.) to production.
- Customize services to meet the demands of your customers.
On top of all of this, our clients have access to our sophisticated and secure Client Access Center. This allows you to monitor orders, see reports, receive alerts, and more. We are proud to have a team of highly trained logistics professionals who will serve you at every point in the process.
We understand that selecting a kitting and assembly service is an important decision. That’s why we’re offering a free quote to help you get started. Be sure to also contact Elite Ops today for more information on what we can do to help you grow your business. If you are in the market for an eCommerce order fulfillment and distribution company, you can count on us to help get your business moving along efficiently.