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Kitting. The strategy to reduce inventory costs

Nov 23, 2022 | Kitting Services, Logística

Concerned about the efficiency of their processes, manufacturing companies consider kitting the solution to their warehouse problems.

Statistics show that more than half of the workload is spent in the search for parts. Companies that are not willing to pay that price hire kitting.


Want to know how kitting activities reduce costs?

Read on and find the answer.


What is the importance of inventory for companies?

Inventory is an important issue for companies, because part of it plays a role in their profitability.

For companies, inventory management can determine success or failure, especially for small and medium-sized companies. They cannot afford to make mistakes in this area, as their structure cannot withstand waste or shrinkage.


What impact does inventory management have on business economics?

One of the most important reasons why inventory is so important to companies is its cost.

In the automotive manufacturing industry, for example, each part has a high value and the disposal of such parts means a great loss. In addition to the difficulty encountered with some very exclusive parts.


How can inventory costs be reduced with kitting?

Kitting allows a series of possibilities that help reduce inventory costs, here are the main ones:


  1. Optimize space

As we all know, one of the most frequent problems in terms of inventory and warehousing is limited space. For this reason, it is necessary to organize warehouses with the help of kits that allow access to all the products or parts that are constantly requested.

In this way, all the space will be used optimally and you will not need to allocate resources to set up another place or even rent warehouses.


  1. Reduces search time

The time spent just looking for the necessary parts can be up to 65% of the total process time. A lot of time that is worth twice as much is wasted at this stage.

Develop a method to facilitate the search for parts. How to do it? Which parts?

Generally, kits are made with all the parts that make up a product or kits with only one style of parts for quicker identification. The storage conditions of parts can make a difference.


  1. Set up ongoing reports

Run ongoing reports detailing supplier receipts and issues. This tool will help you concentrate all the inventory information and is a way to quickly know the stock you have.


  1. Find a way to automate the process

As in most businesses, processes should be automated as much as possible. Hiring a subject matter expert will be able to apply every piece of information.


These were some of the most practical tips to reduce inventory costs and learn about alternatives.


Are the objectives of kitting clear to you? It is not only about grouping items as we see fit, but they must fulfill specific functions and the logistics of the process is extremely important.

Why not apply kitting in your product warehouse, the benefits are incredible!


A&T SUPPLY LOGISTICS is the logistics service provider and one of our star services is Kitting.



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