Advantages of Contract Kitting

The concept of lean manufacturing has been around for decades and focuses on streamlining production to improve value and productivity while minimizing waste. During this process, companies are encouraged to map-out the flow of product through the entire supply chain including procurement, production, kitting, assembly, warehousing, packaging, and delivery services, in an effort to identify efficiency opportunities and ensure product flows smoothly through each phase. One area of opportunity that is often identified during this exercise is kitting.

Kitting is the process of collecting and organizing separate but related parts for future use in the manufacturing of a product. Kitting must occur where the part inventory resides so it makes sense to partner with a company, like RiverSide Integrated Solutions, that can provide kitting as well as operations such as manufacturing and warehousing. Additionally, for OEMs that already rely on a contract manufacturer, pushing kitting to them is a natural step since kitting is the immediate upstream operation from assembly. Even if an OEM decides to keep production in-house, there are major advantages to outsourcing all upstream logistics: procurement, inventory management of parts and raw material, warehousing, the actual picking, packaging of the kit for transport, and shipping the kit to a required destination. Below are some of the key advantages of contract kitting.

Minimize Warehousing and Storage: kit assembly and storage of assembled kits consumes a significant amount of floor space. Once teamed up with a partner, OEMs not only tap into their partner’s kitting expertise, they also get to take advantage of their inventory and warehousing facilities – eliminating the need for OEMs to use their own floor space for these activities. This is a huge advantage of contract kitting and allows OEMs to utilize the space for other purposes including production growth opportunities and new business ventures.
Reduce Labor Cost: kitting is often a time-consuming process. Contract kitters have the facilities available and the resources and processes in place that enable completion of kitting operations more efficiently – resulting in lower labor costs. Additionally, kitting improves productivity as assemblers utilize pre-prepared kits at the moment they are needed instead of taking the time to locate and pull the various parts from storage – further reducing labor costs and saving time on the production line.
Added Manufacturing Flexibility: partnering with a contract manufacturer for kitting provides more scalability. Since the provider can readily scale operations, OEMs are able to adjust production and kitting as necessary to respond to demand changes and market conditions. And the additional nimbleness in manufacturing is achieved without sacrificing quality or time to market.
Focus Resources on More Value-Added Work: generally speaking, kitting operations are prone to error and are not typically a core competency found within most OEMs; thus, OEMs that perform kitting in-house must development and maintain the requisite skills. Contract manufacturers, on the other hand, have extensive experience with inventory, assembly, and kitting that translates to high accuracy and quality in these operations. By partnering with a contract kitter, OEMs can focus their in-house resources on core business competencies and more value-added work.
Packaging and Shipping Gains: advantages that are often overlooked are the packaging and shipping efficiencies gained from contract kitting. The ability of contract kitters to buy in bulk allows economies of scale that are not possible when OEMs perform the kitting and packaging steps. For example, by ordering supplies such as boxes, pallets, crates, bins, and bags in bulk, contract kitters can drive down those costs and pass the savings along to customers. Additionally, contract kitters provide more economical and sustainable packaging by utilizing custom-sized boxes, as opposed to standard box sizes, to reduce the size and weight of shipments.

RIS’ Kitting Solutions

RIS is an advanced contract manufacturer providing robust solutions in circuit board assembly, product assembly, kitting, supply chain management, fulfillment, distribution, and reverse logistics.

Our turnkey kitting services provide customers with the opportunity to receive multiple parts kitted together and packaged just as you need it. We provide a suite of kitting solutions to meet a variety of needs ranging from OEMs needing hardware components kitted and sent to factory floors, to online retailers needing kits organized for consumers. We can assemble and stock kits in our warehouse to be available for expedited shipping or built to your forecast. Every kit will receive RIS’ generated work instructions that are verified by our customers to meet expectations.

Due to being centrally located in Winona, Minnesota, we are able to provide our customers with quick, cost-effective delivery throughout the United States. As a result, your assemblers spend more time assembling and a lot less time waiting for their parts to arrive. The economies of scale that we provide to all of our customers, means that RIS processes incoming parts in bulk, rather than individually as each order arrives. This greatly streamlines the whole kitting process, while keeping time spent on processing the inventory low. Similarly, because of our high shipping volume, we are also able to secure better shipping rates for your kits that not only keep overall shipping costs low but can often take some of the financial burdens out of expedited delivery costs.

Summary