Definition: Kitting is a process where separate components are combined to create a single product. It is often an assembly process where the customer picks different elements that are put together by the company in one piece.
What Does Kitting Mean?
Contents
In modern days, customers are used to customizing their products according to their needs. This is possible mostly because of online e-commerce platforms that allow consumers to pick and choose the items they desire to include in certain purchase. A kitting procedure is one that mixes individual items, selected by the customer, and packages them as a single piece. This increases customer satisfaction and reduces shipping costs.
On the other hand, one of the challenges of kitting procedures is that not all items might be available at the same location. This is a regular situation for companies that have different warehouses or fulfillment centers. The online system might state that there are enough inventories to deliver the order but it will not be possible to use kitting in such order because the items are located in different places.
To reduce this situation, companies tend to have an ABC system of inventory where A items, those with the highest demand, are always available at the same location to increase the chances of enabling a kitting alternative for the client.
Example
Cornelia is a 23 year old girl who wants to buy a laptop. She visited the website of a well-known PC manufacturer called Solar, who offers the alternative of building your own laptop by allowing the client to choose between different options of the various components that the laptop require. After deciding which kind of laptop she needed, she went on and picked the memory, case, processor and screen size of it.
These elements were combined by the manufacturer to produce a customized laptop that was put together in a single box and sent to Cornelia’s house in 5 days. In this scenario, the laptop itself was the result of kitting, since the separate elements were combined to produce the laptop that Cornelia wanted.
