Streamline operations with a kitting warehouse
What is kitting fulfillment?
Fulfillment kitting services refer to combining multiple products or pieces into a single unit for the next point of use. Some fulfillment kitting is as simple as picking 2 different products during order fulfillment, and shipping them in their current packaging to the end customer. Other clients require kitting that is complex, time consuming, and requires more attention to detail. Complex fulfillment kitting jobs may require light assembly, repackaging, labelling, and any other client requested services.
Some fulfillment kitting is completed ahead of time in preparation of orders being placed; time consuming and complex kitting jobs are often done ahead of time. Other kitting services are completed only after the order is placed, and the kitted unit is requested. These on-demand fulfillment kits are often simple and quickly completed before the order is shipped to the customer. On-demand kitting helps the client reduce their total on-hand inventory by creating the kitted units only when they are needed. Instead of buying enough inventory to make a certain amount of each kit ahead of time, a single component product may be used for a variety of different kitted units depending on what is actually ordered.
What is a kitting project?
Kitting warehouses complete one-off and recurring kitting projects
A kitting project is a job that requires the combination of multiple pieces into a usable or sellable unit. Many businesses use kitting projects across their supply chain to create value for their customers. For example, products may be ordered in bulk from multiple vendors and then sent to a kitting warehouse to be combined into a single product. Some kitting projects are one-off jobs that never need done again, such as fixing a labelling error the manufacturer made on the last Purchase Order of goods. Other kitting projects are recurring and clients must find a dependable kitting warehouse partner for their kitting projects.
Kitting projects may be small or large, depending on the client’s need. Small kitting projects are jobs that require 1) few total products be created, 2) minimal kitting difficulty, and 3) reasonable timelines. Large kitting projects may be to create many total products, complete difficult kitting work, or to kit within an unreasonable timeline. Most kitting warehouses complete both small and large kitting projects. Interview potential providers to find the right kitting warehouse for your need.
What are kitting fees?
Kitting fees for kitting services are unique per scenario and provider. Kitting warehouses complete many types of kitting services, so they first discuss the scope of work with the client before quoting them for the described workload. Kitting fees must cover the cost for the work to be completed, any material costs, and leave profit for the kitting warehouse. Some warehouses charge hourly rates for kitting services; the client is charged a flat hourly fee based on how long it actually takes the warehouse staff to complete the requested work. Hourly fees make it difficult to predict total project costs and it also puts the client at the mercy of how efficient the kitting staff is.
Other kitting warehouses charge based on the number of kits completed or the amount of units handled, regardless of how long it takes for the kitting staff to complete the kit. Some warehouses have more complex pricing models, but fundamentally all kitting fees are charged based on how much time it takes, how many materials are required, and how complex the kitting is. Material costs are often passed along to customers in a cost plus pricing model or for an agreed flat rate per material unit.