How to Implement a Kitting Program

1. 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.

2. 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.

3. 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.

4. 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.

5. 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. 

6. Continuous 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.

Article originally published April 3, 2017 and updated for accuracy and relevance.