Imagine a cluttered storeroom with scattered parts in mismatched bins. Nothing is labeled and nothing is organized. Can you imagine how difficult it will be to find the exact part you need, let alone to find that component quickly? A possible solution to organize your facility — and cut down on SKUs — is to implement a kitting program.
What is kitting?
Kitting is a material management strategy used to create pre-packaged and pre-labeled components, increasing efficiency and reducing time-consuming organization of assembly options. A kit includes different parts and components that are always used together. Kits simplify your supply chain by taking several SKUs and combining them into one kit with one SKU. Implementing a kitting program can ultimately move production towards being just-in-time (JIT).
The idea of kitting has existed in production facilities for many years, but it has recently been revitalized as more companies embrace Lean principles to streamline processes. Trends in automation have also made kitting projects more efficient because labeling machinery requires less maintenance and oversight.
Does kitting apply to my organization?
Like other Lean principles, the concept of kitting can be adapted to nearly any company in any industry. Perhaps your organization buys product in bulk but has to spend time separating the bulk product into smaller batches. Maybe you buy products in increments that, when joined with other components, don’t work out in a perfect mathematical conversion. Or perhaps your workers get to a job site and frequently find that they’re missing equipment necessary to complete the job. Kitting consolidates products and components so you always have the right inventory on hand at the right time.
Use these steps to implement a kitting program that eliminates SKUs and streamlines your supply chain.
- Identify Bottlenecks
Before you can create a kit, you must identify areas of inefficiency in your organization. Look for bottlenecks in production. Make a note of components that are hard to keep track of or are often forgotten. When parts are always used together, it takes extra time to track and store these components separately. Think about the different products and components that are always used together that could be combined. Components that require a bill of materials (BOM) are also a great candidate for a kit.
- Walk Through the Stockroom
Take a walk through your stockroom and look at how parts are organized. Use this exercise as part of your Gemba walk. In Lean methodology, the Gemba walk is an in-person observation of where work is performed to search for value (and alternatively, waste). Physically walking through the stockroom helps you understand how parts are laid out and managed. Is there a way to make the products you have into less counted inventory? Look for ways to consolidate parts from several items into one.
- Collaborate With Your Team
After you’ve searched through your parts and products for inefficiencies, it’s time to ask others to do the same. Work with members of your team to find opportunities that you may not be aware of. Partner with your engineers to gain expert insight into how your products are assembled. Ask the technicians who replace parts on your machinery if they have noticed any opportunities to simplify or eliminate parts.
- Work With Your Distributor
Once you have a working knowledge of your inventory and stockroom, it’s time to leverage the relationship you have with your distributors. Take the research from the first three steps as a jumping-off point for developing kits. For parts purchased from a distributor, work together to create a system that ensures that certain parts are always delivered together.
Here are two examples of kitting creation with the help of a distributor:
Scenario 1: You currently buy a relay, but you always have to order the relay base and the spring clips separately. By making this into a kit, it’s guaranteed that you always have what is needed to use this product. An added benefit is that kitting cuts two SKUs out of your system.
Scenario 2: Wire duct and cover usually come in standard 6-foot pieces. Most vendors sell by the foot. That means for one PC of each, you end up with six in inventory. Use a kit to convert the feet into sticks and include the matching cover that is needed for each kit. This makes it easier to control the inventory and reduces one SKU.
These are the types of solutions that require a strong partnership with whom you are purchasing materials from. Having a working knowledge of where kits could benefit your organization ensures that your distributor can set up your kit without any guesswork on their end. Completing steps one through three can also show opportunities to kit internally. As you analyze your production for areas of inefficiencies, you can decide on which end it makes sense for the kits to be created.
Once you have your kits assembled, discuss timelines with your distributor. Knowing lead times is critical to having kits on hand when you need them. How often do you need to order parts or products to ensure that there is always enough safety stock on hand? Understanding kit lead times is an integral part of streamlining your supply chain.
- Customize Your Kits
Kits are assembled based on your recommendations, even when working with a distributor. Your organization determines the BOM and what part numbers will be included. You can provide your distributor with a detailed print that they will use for a quote. By providing your notes and requirements for the BOM, they have the ability to make the kit the same way with every assembly for the part number.
Kits are customized to your specific needs; there’s no one-size-fits-all option. Kits can include simple, everyday components or parts needed for periodic purchases. Label the outside of kits to make it clear what’s included. Anyone, even someone who’s not familiar with the product, should be able to easily understand exactly what is included before opening the kit. Use labels to organize products in your stockroom. This makes it easier to track safety stock levels. Bag and tag kits with your internal part number so each part number is already identified in your stockroom. Parts can be marked with part numbers on the product or on the actual kit bag.
- Continual Improvement
If there’s one Lean principle that stands the test of time, it’s that there are always opportunities to find more value and eliminate more waste. Kitting is an ongoing process that should evolve over time to meet changing needs. Establish a system in your organization to monitor production and inventory bottlenecks. For production that’s truly “just in time,” continually look for opportunities to consolidate inventory and streamline your supply chain.
Getting More From Less
Implementing a kitting program starts with identifying your organization’s bottlenecks. Ultimately, kitting allows your organization to get more value from fewer SKUs. Creating a kitting program can increase efficiency, provide cost savings, and put you on a path to JIT production. Shipping is more convenient with fewer parts to track and can facilitate a faster turnaround time. With a predetermined kit, you know that you’ll get all the hardware you need without wasting time tracking down related components. Forget about assemblers searching through inventory and pulling parts. Kits save time and reduce labor costs because components are ready at the point of use.
Are you ready to get started? Walking out on the production floor is the best place to begin.