- Warehouse kitting is the process of taking different yet related SKUs and combining them together to create a new SKU
- When you use kitting, you generate fewer SKUs, making it easier for you to organize your inventory effectively
- Warehouse kitting is a simple but effective order fulfillment strategy that can save your business time and money
Order fulfillment can often be a stressful and complex process for online merchants, especially during the busy holiday shipping season. So, what can be done to make this process simpler and more seamless?
Warehouse kitting can be the answer! Indeed, warehouse kitting can be a great way for online businesses to save time and money as well as optimize their inventory management. With this guide, we’ll take a closer look at just what exactly warehouse kitting is and how it can potentially benefit your company. Here’s all you need to know!
Table of Contents
What is Kitting in a Warehouse?
Warehouse kitting is the process of taking different yet related SKUs and combining them together to create a new SKU.
Essentially, warehouse kitting involves fulfilling customer orders by pre-assembling individual items into kits that are ready to ship out right away, rather than picking and packing them individually. For example, if a customer orders a personal computer online, they may also select certain software, USB drive, monitor and other components. The supplier would then assemble all of these items into a single kit to be shipped to the customer.
To understand the warehouse kitting procedure even better, let’s first understand what happens in a warehouse after an order is placed. Typically, when fulfilling an order for individual products, the item is located through the unique identifying code in the warehouse management system. Then, a staff member retrieves the item before updating the inventory and completing the order fulfillment. This process is repeated for every product that’s ordered, as individual SKUs assigned to individual items are all picked, packed and shipped separately.
With kitting, on the other hand, you bundle items that are usually ordered together to create one single unit in your inventory. So, when a new order is placed, you can quickly and easily locate the items as a bundle and ship it off right away.
What are the Benefits of Warehouse Kitting?
Kitting offers a number of great benefits for companies to consider. Just a few of these include:
1. Organizes Your Inventory
First and foremost, warehouse kitting is a great way to make your warehouse more organized and streamlined overall.
When you use kitting, you generate fewer SKUs, making it easier for you to organize your inventory effectively. This, in turn, optimizes warehouse space and makes it much more efficient overall.
2. Increases Efficiency
Speaking of efficiency, warehouse kitting increases that greatly too!
If, for example, you have to assemble an order, kitting makes it simpler for your workers to locate all parts in one place, ultimately boosting worker efficiency and productivity. This, crucially, can give your business a competitive edge in the long run.
3. Reduces Labor Costs
Increased efficiency, in turn, also helps to decrease labor costs!
Fewer workforces are required to perform tasks, ultimately lowering your labor costs and saving your company money.
4. Faster, More Seamless Shipping Process
Kitting can also make your shipping process much simpler, streamlined and quicker.
Warehouse kitting can go a long way in making sure your shipping process is simpler and much more efficient, cutting down on the risk of human error and decreasing fulfillment times. You can print shipping labels beforehand, plus don't have to weigh and label individual items at the time of shipping, offering considerable time and money savings.
Shipping off the pre-assembled kits quickly can also help save time and reduce fulfillment errors.
5. Improved Packaging
Warehouse kitting is also a great way to make packaging more affordable and efficient.
Instead of packing each item separately into standard-sized boxes, you can pack your items together in a custom-sized box that can reduce the size and weight of your parcels. You can also save on packing materials as well, as you don't have to pack items separately. Ultimately, these can help to cut your packaging costs greatly!
6. Frees Up Warehouse Space
Kitting is a warehouse is also a big space saver!
Warehouse kitting, by bundling similar items together, helps to optimize and reduce warehouse space. This means your business can operate in a smaller, more efficient warehouse and ultimately save even more money!
7. Improves Workplace Safety
Kitting, believe it or not, can also improve workplace safety.
By reducing the time and distance workers have to move to assemble orders, accidents can potentially be reduced. That not only means a safer, more comfortable workplace, it also means less spent on workers’ compensation and higher workplace morale overall.
8. Smart Sales Strategy
Finally, warehouse kitting can also be leveraged as a great sales strategy.
Consider similar items like handbags and wallets sitting in your inventory. You want to sell off your current stock to order new inventory. Just bundle them together and offer them as a discount package for sale!
Doing so is an excellent way to not only boost sales, but also optimize your inventory turnover.
Warehouse Kitting: Make Your Fulfillment Process More Efficient
Warehouse kitting is a simple but effective order fulfillment strategy that can save your business time and money, not to mention make your warehouse considerably cleaner, safer and more organized!