Need product containers in boxes? That’s Kitting. We do it!
We will begin by asking a simple question to get this article started. What is a private label? My sense is that not too many people know what they are. To appreciate this article’s relevance, it is essential to be clear about what the “big terminologies” mean when it comes to this topic. However, before you can really understand what “private label kitting logistics” mean, first you need to become familiar with all of the individual terms involved in this topic.
The first term we need to clarify that we already hinted about in the above paragraph is the term “private label.” That term is used to describe all the products that one company manufacturers that are marketed under another company’s brand name. Those private label services and goods are present in numerous industries these days. Whether you are involved in web hosting, or the cosmetic industry, or the food industry, you will have run across some products that you didn’t know what their nature is.
One way that you can determine whether a product is a kind of private label product is to compare the price of the item to that of international, national, and regional brands. Traditionally, as well as currently, private label commodities trade at prices that are lower compared to their more well-known counterparts. However, lately, the trend has shifted more towards private label products in that they are able to favorably compete with products that are similar.
Of course, that is where their quality is comparable.
Kitting is the second term we want to define. That is the process where related products that are from different manufacturers get grouped together, packaged and marketed as one unit. In this situation, the condition is that the items are groups need to be closely related items. A good example of kitting being used in that way is with an online PC purchase. The buyer might choose software, memory, peripherals, and drives from different manufacturers along with the PC, and then have all of the items delivered by the supplier as one unit.
In the above case, the supplier creates a customized kit that contains all of the products that are needed by the customer. Once the individual items constituting the kit have been successfully collected, the supplier will assemble them and then ship them out as one unit. I am assuming everyone knows what logistic is, right? We will still give a short explanation before proceeding to the actual discussion of the topic.
Logistics refers to the management of the services and products from service providers and manufacturers to consumers. They can be either abstract or physical resources that are managed under logistics. Physical items include equipment, liquids, animal products, animals, raw materials, and food products. Abstract items include energy, information, and time. Logistics is a very complicated process that is performed the best with simulation software being used.
The logistics we are discussing in this article involve private label services and provides that are presented in a singled unit or kit to the end user. Are we only talking about managing private label products that get assembled into one kit for marketing purposes? At this point, we need to ask what role kitting plays when it comes to private label products.
Once can view kitting as meaning the same thing that pre-assembly does. This may be true, however, it is a gross misconception that needs to be avoided as well. Kitting refers to adding complementary items like batteries or accessories to a certain product’s packaging. However, pre-assembly involves bringing all of the building blocks or essential components together that are needed for realizing a certain product.
Whenever pre-assembly gets skipped, you end up with just individual components that may or may not add value depending on whether you can assemble all of the parts on your own or not. The kitting process is more refined and the end product is presented to the customer in a form that can be used easily. Some of the major services that are associated with the kitting process include:
– Blister packaging
– Shrink wrapping
– Packaging services
– Several assembly line operations
– Component kit building
– Order and material management
Kitting has become very effective when it comes to adding value. For end users or consumers, the extra bonuses that are given without any extra charges are enough to have good relationships fostered with the parent company. In this case, the parent company is the company packaging the private label products and marketing them under their brand name. The satisfaction of the customer will be given a big boost when the kiting is complete.
For customers dealing with sub-assembled parts, manufacturing efficiency is increased by kitting through providing products in just the right format. The multiple of bureaucratic procedures inherent in a majority of supply chain systems can be avoided since most of the work will be handled by the kitting company. Manufacturers are able to focus on production and let the kitting company deal with the shrink wrapping and packaging processes.
Now it is clear that the terms that we defined in the first part of this article merge into one. There are private label products on one side needing to be marketed under another company’s brand name. Then there are logistic practices on the other side that manage the handling of goods on the manufacturing side of the things to the consumer. In between those two processes, kitting enters to provide the products with added value.
There are 7 simple steps that can summarize the entire kitting process:
– An order gets placed to perform a certain activity on private label items.
– Individual components that are needed for the order get transferred from their warehouses over to the kitting area.
– Next, the components are assembled and labeled.
– Kitting, rework, leaflet and packing are released and completed.
– Then the components are transferred over to the storage area where they are quarantined.
– Products get dispatched for distribution, and then finally