As part of their competitive strategy, some companies look constantly for new ways to meet the individual needs of clients. Using value-added solutions may be a way to position themselves and keep the loyalty of clients.
Kitting, customization, packaging, labelling, handling heavy loads, palletizing, replacing, reverse logistics, refurbishing, and managing the stock of suppliers are some of the value-added services provided by specialized logistics companies as part of a comprehensive strategy.
Some of the advantages of hiring value-added services are broadening the portfolio of products, getting the shelves ready for the supply process, ensuring a continuous improvement, managing the stock in a more efficient manner, reacting faster to the demand, managing transportation costs, and controlling labor costs.
Because the life cycles of products are increasingly shorter, both the manufacturers and the clients demand more spare parts, replacements, and new pieces, which results in a greater need for warehousing space. Kitting can help alleviate this situation.
Kitting is a value-added service consisting in grouping and putting together parts of products or complete products in a single package. This process for combining two or more components aims to lower costs and improve efficiency.
We use kitting to optimize time, order, and processes. Employees do not need to search for pieces or perform pre-mounting tasks, resulting in a cleaner and faster operation. They get the kits with the necessary components in each stage of the supply chain.
Kitting improves speed and lowers overall costs because we lower the assembly time and decrease the interruptions associated to individual production as we manufacture the kits. These kits usually have an independent SKU from those of the individual components. Likewise, we store and track them as a single unit.
Kitting is ideal when we wish to put together packages with identical or similar products which may be sold with discounts or with promotions like free shipping. Some of these products may be books, DVDs, CDs, skin care products, make up, board games, videogames, toys, auto parts, paper, and samples.
When companies hire the services of 3PL outfits for this type of value-added service, they gain a series of benefits:
- More space, since employees have what they need when they need it. They are no longer surrounded by components and materials.
- Eliminates lost time because the time employees use to search for pieces and components is lowered, since they all come in one single kit.
- Improves the safety of employees by lowering the number of pieces at the workspace.
- Lowers shipping errors and ensures a continuous improvement because kitting becomes a filter.
- Makes stock management and invoicing easier because it yields information on what type of pieces are needed and which should be ordered.
- Improves productivity and lowers labor costs because the manufacturing process starts outside the plant.
- Improves the flow of boxes, customization, and packaging.
- Lowers the number of suppliers.
When we implement kitting, employees save time for picking and packaging individual orders; this makes it possible for us to customize a great number of kits at once and fulfill orders quickly. This translates into a positive and efficient experience that lowers costs for both clients and manufacturers in sectors like pharmaceuticals, personal hygiene, and others.
To procure themselves these savings, some manufacturing companies are hiring the services of 3PL companies like Solistica. Their knowledge, experience, and technology guarantee a greater accuracy in kitting and other value-added services they offer.
*This blog was originally published on December 20, 2018 and modified on June 8 2022.