Manufacturing and Inventory Management Software
Whether you're a retailer, manufacturer or wholesaler, product kitting is a process that can greatly benefit your business.
Not only does it save your business plenty of time and money, but it can also increase sales and boost employee productivity at the same time.
But what exactly is product kitting and how does it work? We have written this guide to tell you everything there is to know about product kitting, how to’s and the benefits. Let's get started.
Kitting, also called product bundling, is the process in which usually separate but related items are grouped, packaged and sold together as an individual item.
In most cases, items being kitted together are under the same category and are closely related to each other (desktop and monitor or shampoo and conditioner).
The stock availability of a kit or a product bundle is determined by the stock availability of its components:
Typically, when a kit item is sold, the inventory system will automatically deduct the components’ inventory. Now let’s take a look at some real-life examples of kitting.
Here are a few different types of product bundles seen in the market:
Packaged and ready-to-order sets are great for customers to choose in set quantities, colors, or mix. Customers can order the choice they want without having to put it together which allows for a better sales experience and faster sales cycle. Plus businesses can add discounts on sets to encourage larger sales.
The subscription market is growing tremendously these days — especially food products like sports drinks, supplements, coffee and beauty products. Subscription boxes are a great way to sell a single package with multiple products. Subscription boxes are a service of convenience to the customers because they get their order in a timely manner without having to manage future orders and businesses get a repeat buyer.
Kitting is used widely to track parts inventory and reorders in manufacturing and wholesale operations. Build to order or manufacture to order is a type of kitting process. It allows you to provide better service and more options to your customers. For example, if you are selling furniture that is built upon customer order, you are stocking individual parts and then assembling the parts when purchased. As a result, you can offer your customer more choices because you can mix and match your parts to create a combination of products.
Similar to the custom furniture example above, custom or personalized items can be considered assembled products from an inventory perspective. If you are making custom and personalized furniture, kitting will help you track all the materials involved in making the final product. For example, if you are selling a custom chair with custom material used to engrave the chair, this would be defined as kitting if both the chair and the custom material were individual stock items in your inventory platform.
Kitting process can vary depending on the business. This is because of the type of products you sell and how you decide to bundle them together. Nonetheless, here are some steps any business can take to get started with kitting.
The first step of the kitting process is to decide what types of products you’re bundling together and pick them out.
Thee items can be grouped by usage (Desktop and Monitor), theme (Halloween decorations), promotions (buy 1 large bottle of cologne and get a travel size bottle for free), customer trends (eg. look at orders and see what products your customers buy together), multiples (eg. customers want to buy 6-pack of water rather than 1 individual bottle) and many other criteria.
Once you have picked out the products, now it’s time to package them together.
Make sure you pick a box that fits the items together. This is extremely important if you are selling fragile items and you want to make sure they do not get damaged during transit. Consider bubble wrapping your products or many other sustainable alternatives to secure your package for transit.
This is a very important step of your kitting process that often gets ignored. Assign your newly created kit a unique SKU number.
Even though your product is a combination of other items, which have their own unique SKUs, as soon as they are bundled together they become a single product. Assigning a new SKU number will help you keep track of the kit better and also streamline your inventory management.
Whether you are bundling your products in advance or bundling per order, you should have a dedicated location to carry out this process.
If you are bundling products ahead of time then also find a proper location to store the packaged kits, that way when an order comes in, your staff knows exactly where to go and get the kit, saving you time and improving productivity.
Once an order comes in, either get your kit or assemble your kit, stick on the shipping labels and any other labels necessary on the packaging and ship them off.
Also don’t forget to inform your buyer that their order is on the way. Shipping and Fulfillment softwares will help you automate this process.
Kitting is a great tool for any business looking to increase sales and productivity. Here are a few ways businesses benefit from kitting:
If you are kitting based on buyer trends, you already know what items need to be bundled together. This will allow you to kit ahead of time, but you can also save time in labeling and weighing your Kits.
Also having a kitting location predetermined, it will contribute to a more streamlined and efficient order fulfillment process.
As you start doing these processes with an inventory system in place, you will start to be much faster at kitting and commit less errors.
Kitting allows you to keep your inventory in control. Every kit will have its own unique SKU, so if you are pre assembling kits, it allows you to know where your inventory is at all times.
It also gives you a better idea of what components were used in a kit and saves you massive amounts of time when it comes to carry out a cycle count or inventory audit.
When you sell items as a kit, you will sell various items at a time which increases your overall product sales, which in turn saves you on holding costs and warehouse space. This will also lead to higher average order amount which will increase cash flow.
Also with kitting, you now can use less packaging. It might not seem like boxes don’t cost as much but if you are shipping in high volume the cost savings will be quite significant. With less packaging, the product weight will go down and since shipping costs are largely dependent on weight, kitting will provide significant savings in the shipping department.
What goes into a kit is a business decision. So if you have any old or unwanted products that might end up as dead stock, you can run promotions to get rid of the stock.
It also can be used to create a better buying experience for the customer.
Kitting essentially is creating more products on the catalog. This will lead to new marketing channel opportunities or exposure to new potential customers and referral sources.
Kitting requires little selling creativity; the only thing it requires is an inventory management system that can support it, which we will discuss more in detail below.
If you are running a business with large enough warehouse space, you will most likely have a kitting location designated and it will typically be near your shipping & fulfillment area.
Kitting involves workers going around your warehouse and pickling the items that need to be packaged together. After finding these items, they would then drop them off at the kitting location where other workers would package and prep for shipment. If your warehouse or business is a small operation, typically the pickers will pick, pack and prep for shipment.
Kitting in manufacturing is when a company kits after production is complete. They take a group of products and bundle them together as a single item. Manufacturers tend to call this “Material Kitting”.
But as a manufacturer, you can use kitting to gather parts and materials before the production process. This will make production runs more efficient by eliminating the time workers spend on looking for different parts.
The components of a BOM would arrive on the shop floor in a ready to assemble kit, leaving the workers to only assemble and process the parts.
Further Reading: What is a Bill of Materials?
You can adopt material kitting when you find that your workers are wasting too much time locating materials on the production floor and their time is best suited for assembly.
Here are some scenarios where kitting could be saving you time and increase production efficiency:
Kitting requires you to gather, sort, organize and in some cases pre assemble parts to be used on the production floor.
You can use the less skilled workers for this kitting process and use the more skilled workers for assembly and production.
Another option is to talk to your vendor if you can get a large part of the components from a single supplier. They can package the parts in a ready to go set.
Kitting on your own premise requires proper planning in order for it to be successful and efficient. Use a manufacturing software to make your material kitting process better organized.
Now that you have learned about the benefits of product bundles and some real-life examples, let us see how you can implement them in Brahmin Solutions.
If you sell beer as an individual bottle as well as in multiples (Pack of 6, Pack of 12 of beer) or you sell a mix of beers (a beer variety pack), you can easily do that by creating a variant kit. With kit variants, Brahmin will automatically calculate the QTY on Hand and Available Qty based on the components availability. As component quantities reduce the kit quantities will reduce automatically and you won’t oversell.
Brahmin Solutions supports both types of workflows, where you create kits in advance and as orders come in.