The Advantages to Using a Kitting Process in Manufacturing
A kitting process in manufacturing is when a collection of parts and materials are grouped together in a single kit that has its own SKU number. These components are then delivered directly to the point-of-use, usually a specific part of the assembly line. It can help to think of kitting as pre-washing plates for a dishwasher, or how a hygienist will clean and prep your teeth before the dentist shows up. Making use of a full kitting process in a warehouse can be an impressive boon to your operations and efficiency. Here’s why.
Reduces Warehousing Requirements
Warehousing and distributions services base their costs in part on how much space your items take up. A kit containing multiple items with a single SKU will not only take up less shelf space than items stored separately, but it is considered a single item for shipping costs as well. Kitting processes in warehousing also introduce a useful level of standardization into the supply chain that helps simplify cost modeling. After all, the contents of each kit are predetermined, which makes calculating and predicting costs much easier than if the components had to be drawn separately. Kitting also makes it a lot easier to track inventory levels since you only have one item to focus on.
Enhances the Manufacturing Process
For manufacturers, the key benefit of kitting is that it reduces material handling and processing times at the point-of-use. Think of it like cooking. Without kitting, you are spending time finding each ingredient or utensil as the recipe calls for it. With kitting, you have everything you need arranged by the stove and you can get down to business without interruption. Kitting also reduces the number of deliveries to the point-of-use and the material storage space needed for assembly lines.
Better Inventory Control
Let’s continue with the cooking analogy for a moment. Imagine if your recipe calls for some milk. Without kitting, you’d go to your fridge and get the milk, except you suddenly discover that the carton is leaking or worse, the milk is expired. Now you have to delay carrying out the recipe to get a replacement. Alternatively, you might find out that you don’t have any milk at all or are running low and will need to get more in order to finish the other recipes you have planned later in the day. With kitting, both of these scenarios would not occur. This is because any shortages or quality-control issues would be resolved prior to this point when the kit is first assembled.
Look to Lean Supply Solutions for Kitting and Order Fulfillment Services
Lean Supply Solutions is a third-party order fulfillment company in Toronto whose operations are based around the Lean Methodology, a proven philosophy focused on eliminating any operations, equipment, or resources that are not capable of adding value to our clients’ supply chain. By striving to ensure that the right products are provided to the right customers at the right time, Lean Supply Solutions is able to offer consistent, accurate, and quality results. To learn more about the Lean Methodology, outsourcing to Lean Supply Solutions, or to ask any questions about kitting and fulfillment services, give us a call at 905-482-2590.
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The Importance of Accuracy in Product Fulfillment
When used in the context of product fulfillment services, the term “accuracy” refers to a collection of quality measurements that reflect how well your order fulfillment process has met a customer’s need. In the world of e-commerce fulfillment, an order is considered “accurate” if the correct product is delivered on time, to the correct customer, and in the expected condition. This represents, in essence, the basic promise between your business and the consumer. Many elements of accuracy are handled at the warehousing and distribution levels, before the product actually ships out. Everything from shipping labels to pick-and-pack procedures to packaging materials can play a role in how accurate your shipments will be and, in turn, how strong the customer experience will be.
Accuracy Is Key to Customer Satisfaction and Loyalty
With new customers, your first impression will go a long way towards influencing how likely they are to return and shop again. This applies as much to ecommerce fulfillment as it does to brick-and-mortar shops. If you go to a restaurant and the waiter is slow, gives you the wrong food, or if the chef burns your order, are you likely to return again? How about if you buy a lemon from a car dealership? What if an online store doesn’t deliver your Christmas presents in good condition or only gets them on your doorstep in the new year? All of these scenarios represent the same essential situation and outcome: a failure of accuracy and a customer who is not likely to return. With existing or regular customers, it is important to maintain accuracy. Although a good history with your business can earn you some leeway and benefit of the doubt, all it takes is one bad experience to start souring the relationship. The perpetual flipside to e-commerce is that it is very easy for customers to start shopping elsewhere, which makes loyalty an incredibly valuable thing that should not be jeopardized.
Accuracy Reduces Costs
Even if you don’t care about customer satisfaction (good luck with that!), maintaining a high level of order accuracy can have other impacts on your business that need to be kept in mind.
Minimize Reverse Logistics
An effective reverse logistics and returns policy is something that every business should have but is not something they ever want to need. Each step of the process, from shipping the product back to repackaging and refurbishing, incurs its own costs. Although the purpose of reverse logistics is to recapture value, it is always better to be in a situation where your customer doesn’t want to return the product in the first place. Naturally, accuracy helps with this goal.
Reshipping a returned product is another part of reverse logistics, but it bears separate mention because it has other impacts on your business. Shipment carriers have a finite amount of space available, so there is a very real opportunity cost that is felt whenever you are returning products or sending a customer a repaired or replacement item. Every item that undergoes shipping and packaging as part of reverse logistics is taking up space that could have been spent on another, more profitable order. Maintaining high accuracy helps limit how often this sacrifice has to be made.
Technology and Accuracy
There are numerous ways to help improve order accuracy. Some methods are process-based while others are rooted in technology. Bar codes, for instance, can be combined with robots and sensors to quickly identify and place or retrieve items. Warehouse management systems can help provide configurable and flexible integration of the workflow to help monitor and drive accurate performances.
Look to Lean Supply Solutions for Accurate Fulfillment Services
Lean Supply Solutions is a third-party order fulfillment company in Toronto whose operations are based around the Lean Methodology, a proven philosophy focused on eliminating any operations, equipment, or resources that are not capable of adding value to clients’ supply chains. By striving to ensure that the right products are provided to the right customers at the right time, Lean Supply Solutions is able to offer consistent, accurate, and quality results. To learn more about the Lean Methodology, outsourcing to Lean Supply Solutions, or to ask any questions, give us a call at 905-482-2590.
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What to Consider When Choosing an Order Fulfillment Service
Order fulfillment services, (a.k.a third-party fulfillment) are prevalent throughout the GTA. This is hardly surprising given that Toronto is home to many small businesses in need of fulfillment services. With such a selection of fulfillment partners to choose from, however, it can be tricky to narrow down the candidate that could work best for you. Here are some ideas of what to keep in mind when deciding.
Understand the Fulfillment Centres Cost Structure
Different warehousing and fulfillment services will have varied cost structures, and each one is generally styled towards a different type of business. Some arrangements might have larger storage fees but small or no pick-and-pack fees, which can work well if you have a small number of products but a large amount of variance in how they are ordered. On the flip side, low storage fees with the addition of pick-and-pack fees might be the better option if you need a lot of storage but products don’t require much manual work when ordered. Be aware of how costs are distributed and what kinds of value-added services can be obtained in order to make the most of your investment.
Look for Distribution Centres with Centralized Location
The location of a distribution centre is integral for e-commerce fulfillment companies since it directly affects how quickly products can be delivered to customers. In addition to being a key part of customer satisfaction, delivery speed also affects the type of shipping options you can offer. The ever-popular next-day deliver option, for instance, is reliant on your distribution centre having the geographic position needed to get products moving quickly. Additionally, customers tend to expect free or lower shipping costs if a delivery takes a week or more to arrive, which can further eat into potential profit.
How Is Order Shipping Handled?
The exact process a third-party fulfillment service uses when shipping products is also worth paying attention to. Location matters a great deal in determining delivery speed, but it is not the only factor. How and when shipments are picked up, routes used, plans for unexpected developments, and more should all be evaluated to see if the practices meet your needs and expectations.
Compare Service Level Agreements
A service level agreement (SLA) is a guarantee of how the order fulfillment service will handle orders, ship goods, and otherwise carry out its role in your business arrangement. SLAs should ideally report on elements like order accuracy, inventory shrinkage, the percentage of orders that get shipped same-day, and other key bits of data you deem appropriate. The SLA reports should also be provided regularly since they are integral to keeping your partner accountable.
Look to Lean Supply Solutions for a Fulfillment Services Partner
Lean Supply Solutions is a third-party logistics fulfillment company in Toronto whose operations are based around the Lean Methodology, a proven philosophy focused on eliminating any operations, equipment, or resources that are not capable of adding value to clients’ supply chains. By striving to ensure that the right products are provided to the right customers at the right time, Lean Supply Solutions is able to offer consistent, predictable, and quality results. To learn more about the Lean Methodology, outsourcing to Lean Supply Solutions, or to ask any questions, give us a call at 905-482-2590.
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Using 3PL Services to Help Your Company with Seasonal Swings
Most businesses will experience seasonal fluctuations in customer demand. The most obvious example of this is the rush many retailers experience between Thanksgiving and Christmas, followed by a slowdown as consumers get more restrictive in their spending. Handling these sorts of seasonal swings is important for maintaining agility and efficiency among your operations. Third-party logistics (3PL) service providers are a useful way to help accomplish this goal. Incorporating 3PL into your distribution, warehousing, and fulfillment services can give you the resources and talent needed to stay ahead of seasonal swings and come out on top. Here’s how.
When demand is steady, you usually have a good idea of what your inventory levels are and what the normal rates of products getting shipped will be. During upswings, this all goes out the window. If unprepared, you can easily lose track of inventory levels as consumer demand ramps up. Product shortages can arise with surprising speed, and the need for rapid response goes up with every additional channel you sell through. This is why 3PL services invest heavily in inventory management systems. In real time, these systems will show accurate shelf and warehouse counts and update immediately when something is sold or shipped. Some systems even let you customize alerts so you will be automatically warned if certain stock is running low.
Transparency among Partners
The bigger your supply chain, the more moving parts it will have and the more partners you potentially work with to help get your products to their destination. Swings in consumer demand and inventory require increased activity among all parties involved, and your supply chain partners are no exception. Open transparency is integral to success in these matters. A constant flow of information and communication allows everyone to stay on the same page and quickly respond to situations and shifts as they unfold. 3PL providers can help facilitate this through the use of web portals, providing a single hub from which information can flow.
This ties in to the above point since all the inventory level knowledge and communication can’t help if no one knows where a product is at any given time. Real-time visibility on the supply chain lets you track shipments and deliveries and help relay this information back to the customer. Such features are highly appreciated by consumers, who can take comfort in the power to know exactly where their orders are and what their estimated arrival times will be. Real-time visibility is also important for ensuring your inventory management activities are agile and accurate. Seasonal swings are hectic enough without having to second guess your own numbers.
Respond to Seasonal Swings with Lean Supply Solutions
Lean Supply Solutions is a 3PL fulfillment company in Toronto, whose operations are based around the Lean Methodology, a proven philosophy focused on eliminating any operations, equipment, or resources that are not capable of adding value to clients’ supply chain. By striving to ensure that the right products are provided to the right customers at the right time, Lean Supply Solutions is able to offer consistent, predictable, and quality results.
To learn more about the Lean Methodology, outsourcing to Lean Supply Solutions, or to ask any questions, give us a call at 905-482-2590.
- Published in Blog