Efficiency is critical in warehouse operations. It can save money and time, allowing you to focus on other productive areas of warehouse operations. One of the processes that have been found to be very effective in increasing the efficacy of operations is warehouse kitting. It involves the combination of two or more products into one package, which is considered a single unit. As much as the different products have individual and different tracking numbers, the kits have a collective unique tracking number.
The most commonly available product kits in warehouses include product samplers, book series, and media kits, to mention a few. Traditionally, a package gets assembled only after an order comes in. This consumes a lot of time. The difference between traditional order fulfillment and kitting order fulfillment is that orders are packaged beforehand. Here are the different ways warehouse kitting can save money on order fulfillment.
1. Save on warehouse space with warehouse kitting
Kitting can save on a significant amount of space, meaning less money spent on storage space. Bundling products will consume less space compared to when they are placed individually on the shelves. With such space-saving, you will not have to rent more warehouse space for your inventory if you are fulfilling your own orders. If you are working with a fulfillment partner, you still spend less on pallet space and storage fees.
2. Save on labor costs
About 60% of warehouse costs account for labor. If you can find ways to reduce labor, you can save a lot of money. Warehouse kitting is an effective strategy for labor costs reduction. Kitting reduces both pick and pack costs, which can also be translated as labor costs. Your business will require a smaller workforce to get things done. You will also incur less costs in training and expanding your workforce to meet the changing order fulfillment demands. Saving on labor costs will save your business a lot of money.
3. Fewer mistakes with warehouse kitting
Mistakes in shipping and order fulfillment can cost your business a lot of money. It could be through losses or unsatisfied customers who will not want to order from you again. Kitting significantly reduces the possibility of making mistakes during order fulfillment.
This is mainly because the printing of labels and weighing of the packages is done prior to making the orders hence increasing accuracy in the process. Pick-and pack errors can cost up to $80 for each order. Kitting brings you peace of the mind knowing that even a new employee can do shipping and packaging without making errors. This will help your business avoid expensive mistakes.
4. Save on packaging costs
Warehouse kitting can dramatically reduce your packaging costs. These usually manifest in the package weight. Kitting orders and packaging them in a custom box reduces the size of the packages, which attracts a lower postal fee. Also, individual packaging will require a lot of labels to be printed. This will increase the cost of packaging as well. Instead of using a standard box for packaging, kitting uses a custom box which reduces the weight of the entire package. This cuts the labeling and weighing steps, hence saving costs.
5. Faster processes with warehouse kitting
Time is money. Traditional order fulfillment consumes a lot of time in pick and pack operations. This does not only increase the labor costs of your warehouse but makes the order fulfillment process much slower, leading to a potential loss of sales. On the other hand, a faster assembly process will help your business optimize and maximize the time available every day for profit-making by taking in more orders.
A faster order assembly will directly impact the costs incurred in fulfilling every single order.
There are several options you can explore when it comes to kitting. For one, you can ask your manufacturers to kit your products so that you can send them directly to the fulfillment company. Alternatively, you can let your fulfillment company do the kitting for you. You can also do it in your warehouse. Most businesses prefer outsourcing their fulfillment processes. That way, they get to enjoy a reduction in the total overheads, cut on costs related to warehouse space, increase flexibility in the volume of supply of orders, and improve quality of services. Costs are important factors when running a business, consider kitting to save money. If you want to save even more, look to outsourcing your fulfillment today.