Advantages of Contract Kitting

The concept of lean manufacturing has been around for decades. It focuses on streamlining production to improve value and productivity while minimizing waste. During this process, companies are encouraged to map out the flow of products through the entire supply chain. Mapping these areas helps identify efficiency opportunities and ensure the product flows smoothly through each phase.

One area of opportunity often identified is kitting. This is the process of collecting and organizing separate but related parts for future use in manufacturing a product. Kitting must occur where the inventory resides.

That’s why it makes sense to partner with a contract manufacturer like RiverSide Integrated Solutions (RIS). We can provide kitting and operations such as manufacturing and warehousing to the companies that contract with us.

Additionally, offloading kitting is a natural step for original equipment manufacturers (OEMs) that already contract out manufacturing. Kitting is the immediate upstream operation from the assembly.

Even if an OEM decides to keep production in-house, there are significant advantages to outsourcing all upstream logistics. This could include anything from procurement to inventory management and warehousing. It also includes the actual picking, packaging and shipping of the kit to a required destination.

Below are some of the critical advantages of contract kitting.

Kit assembly and storage of assembled kits consume significant floor space. Once partnered, OEMs don’t just tap into their partner’s kitting expertise. They also take advantage of their inventory and warehousing facilities. This eliminates the need for OEMs to use their own floor space for these activities.

This is one massive advantage of contract kitting. It allows OEMs to utilize the space for other purposes, including production growth opportunities and new business ventures.

Kitting is often a time-consuming process. Contract kitting manufacturers have facilities, resources and procedures that enable the completion of kitting operations more efficiently. All of these things result in lower labor costs.

Additionally, kitting improves productivity as assemblers. Because assemblers utilize pre-prepared kits, they don’t need to take the time to locate and pull from storage. These steps further reduce labor costs and save time on the production line.

Partnering with a contract manufacturer for kitting provides more scalability. So OEMs can adjust production and kitting as necessary to respond to demand and market conditions.

Better yet, they can achieve additional nimbleness without sacrificing quality or time to market.

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 develop and maintain the requisite skills.

On the other hand, contract manufacturers have extensive experience with inventory, assembly and kitting. This translates to high accuracy and quality in these operations. OEMs can focus their in-house resources on core business competencies by partnering with a contract manufacturer.

Many OEMs overlook the packaging and shipping efficiencies gained from contract kitting. The ability of contract manufacturers to buy in bulk allows economies of scale that are not possible for OEMs. By ordering packaging supplies in bulk, contract manufacturers can drive down costs and pass the savings to customers.

At RIS, we provide more economical and sustainable packaging by utilizing custom-sized boxes instead of standard box sizes. This reduces the size and weight of shipments, bring further savings to our customers.

At RIS, our turnkey kitting services allow customers to receive multiple parts kitted together just as they need them.

We provide a suite of kitting solutions to meet various needs. Some of our customers need hardware components kitted and sent to factory floors. Others need kits organized for consumers.

We can assemble and stock kits in our warehouse. You can build a forecast for them, or they are available for expedited shipping as needed.

We construct work instructions for all of our kits verified by our customers to meet expectations. That way, you can rest assured that the kits will always meet your specifications.

Plus, because we’re centrally located in Winona, Minnesota, we provide customers with quick, cost-effective delivery throughout the United States. As a result, your assemblers spend more time assembling and less time waiting for their parts to arrive.

RIS processes incoming parts in bulk, dramatically streamlining the time taken to process individual kits. This cuts time from the whole kitting process while keeping inventory processing time low.

Similarly, because of our high shipping volume, we secure better shipping rates for your kits. This keeps overall shipping costs down and often takes some of the financial burdens out of expedited delivery costs.