Understanding 3PL Custom Kitting Services

“Assembly required.” As consumers, we’re all too familiar with this phrase. It’s made up of two powerful words that, when combined, serve to eat up lots of your time.

For many manufacturers, pre-assembly of component parts is also required during the production process. This assembly can take up a lot of time (as well as inventory space and manpower). To save a good chunk of this time – and money – many manufacturers utilize the custom kitting services of third-party logistics (3PL) companies.

What are Custom Kitting Services?

Custom kitting, as performed by 3PLs that offer manufacturing logistics services, is the act of taking the individual parts of a product, compiling them together in a “kit,” and then delivering that kit to the production operation for assembly.

Many 3PL providers, such as Kanban, are experts in kitting solutions. This expertise comes not only from knowledge and experience, but also the logistics technology investments made to ensure 100% accuracy in inventory and order pulling.

You might ask, “what’s the big deal? Why don’t manufacturers just compile their own parts?”

Imagine that you are a manufacturer. You have 2,000 units that need to be assembled in a day, and you have 15 associates to perform this task. How much time would it take each employee to not only perform his or her assembly functions but also search for and compile all of the parts for 133 products (2,000 items divided by 15 associates = 133 items each) prior to assembly? For most companies, the answer is simply “too long” (aka “too costly”) and that is not to mention wasted time due to errors, lost or misplaced parts, and/or general disarray due to volume.

With custom kitting services, you remove this wasted time and disarray, and streamline the entire process. Your associates receive neatly-arranged kits containing all of the component parts required for a particular stage in the assembly process. No searching for parts or pre-assembly work required. Your production operation runs simpler, cleaner, and much quicker.

Let’s look at kitting in the context of a larger production process:

1. Storage: The manufacturer stores its parts inventory with a 3PL.
2. Kitting: When it’s time for parts to be used in production, the 3PL pulls them and compiles them into kits.
3. Delivery: The 3PL delivers the kits to the manufacturer. This step is also referred to as “just in time (JIT)” delivery – the manufacturer only has the parts during the specific time frame that they are needed.
4. Production: The manufacturer’s associates build the final products using the supplied kits.
5. Packaging + Distribution: The 3PL can then custom package the final products and deliver them to their destination.

In this model, the time and efficiency improvements realized through custom kitting services are maximized by the 3PL’s involvement in other key parts of the production process such as storage, packaging, and JIT delivery.

Additional Kitting Services

In addition to the processes described above, there are additional services that fall under the “kitting” banner.

1. Product Bundling: Combining multiple products into a single package for sale. This is common in retail for promotional offers or creating product bundles that are frequently bought together.
2. Pre-assembly of Products: Pre-assembling products to speed up the final assembly process for the customer or retailer. This is often seen in products that are sold in a semi-assembled state.
3. Labeling and Branding: Adding custom labels, branding, or packaging to products or kits before they are shipped. This can include applying barcodes, branding materials, or regulatory labels as required.
4. Quality Control and Inspection: Inspecting products during the kitting process to ensure they meet quality standards. This can involve checking for defects, ensuring compatibility of bundled items, and verifying that the correct items are included in the kit.
5. Return Handling and Re-kitting: Managing returns by disassembling returned kits, inspecting items for damage, and re-kitting items as necessary for resale.
6. Inventory Management for Kits: Managing inventory levels for both individual items and the kitted products, ensuring that all components required for kitting are in stock and available for assembly.
7. Custom Packaging Solutions: Designing and implementing custom packaging solutions that are optimized for the kitted items, ensure the kits are loaded onto the truck safely for transport to ensure an appealing unboxing experience for the end customer.

Advantages of Custom Kitting Services

There are several advantages of 3PL custom kitting services, including the following.

1. Save space. Instead of being a storage warehouse for boxes of parts and materials, your floor space could be used for production only, thereby increasing throughout. When you need these materials, your 3PL will deliver them just in time.
2. Save time and money. As associates no longer need to spend time finding and compiling parts before getting on the actual production work, you optimize your labor costs and time management. This is no small perk at a time when warehouse associates are harder to find and more expensive than ever. Additionally, if you’re leaning on your 3PL partner for parts procurement, your 3PL may be purchasing for multiple customers to achieve economies of scale that you wouldn’t otherwise have on your own.
3. Optimize your supply chain. With disruptions now common throughout the entire supply chain, you can mitigate impacts to your operations by ordering as much inventory as you need. While you may not have the space for it, your 3PL does. Also, as part of an inbound logistics model, your 3PL can allow you to preserve your capital by invoicing you only as parts are used.

Lean on Kanban Logistics for Custom Kitting Services

At Kanban, we perform kitting services for everything from talking teddy bears to huge aerospace logistics projects. We also help you plan every logistical detail of the operation, including the packaging itself (we love those custom shadow boxes, too). So, when it comes to custom kitting services – as well as the logistics steps before and after it – we’re ready to be your go-to for any job at any size.