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Product kitting is a broad term used in order fulfillment that refers to the assembly of individual items into ready-to-ship sets. This can be either virtually on your marketplaces – a listed bundle comprised of disparate parts –– or physically in your warehouse – products bound together and stored in one location. These ready-to-ship sets are known as kits.
In order to better understand product kitting, you must first understand the basic method in which warehouse management systems (WMS) track individual inventory items. When a warehouse receives a new order shipment, that order initially goes through the receiving and processing department of a warehouse. Here is how the kitting process flows.
Utilizing product barcodes, the processing and receiving department will scan the individual items into their WMS to be tracked and managed. Upon scanning the items, the WMS reads each individual item’s own unique SKU. Think of SKUs as the DNA, or genetic code, of your inventory. Much like how scientists can read your DNA to determine every physical feature of your body, retailers read SKUs within their WMS to determine the physical makeup of the inventory within the warehouse.
When you use a WMS, warehouse workers can identify which items to pick for order fulfillment by each inventory item’s unique SKU on the pick list. When using a WMS you can see how many SKUs you have on hand to sell, and where inventory is located within the warehouse. SKUs are also the building blocks for product kits.
A product kit is a group of individual inventory items, or SKUs, bundled together into a ready-to-ship set. For this example, let’s consider a PlayStation 4 bundle. A typical specialty PlayStation 4 bundle is comprised of several individual SKUs: the console bundle (which comes pre-packaged with the PlayStation 4, the controller and a power adapter), a headset, an HDMI cable and one or more video games. All of these items can be sold separately, but if you know they sell better together, why not go ahead and group some of these items into more easily consumable sets? That’s exactly what product kitting helps you achieve.
An advanced WMS will help you track and manage individual inventory items, but it’ll also allow you to seamlessly track multiple inventory items that you have bundled together into kits. When sold separately, every item within the PlayStation 4 bundle kit contains its own individual SKU. Once those items are kitted together within your WMS, an individual SKU is now assigned to that bundle.
The PlayStation kit contains upwards of six different items. Rather than selling a kit and having to update your inventory for every single item, your WMS will read that single SKU assigned to that kit, and recognize that all of those individual items, as well as the number of kits listed as available to sell, need to be updated on all of your online marketplaces and channels.
The beauty of product kitting is that it allows you to sell kitted items and individual component items simultaneously. SkuVault automatically looks at your component item quantity and calculates your kit quantity based upon how many kit components you have available. Due to these calculations being processed automatically, you no longer have to designate separate quantities for both individual items and kitted items. You can simply create the kit with the necessary component quantity within SkuVault and let our WMS will do the work for you. This in turn allows you to maximize your profits by not missing out on vital sales.
Once your items are kitted together within your WMS, not only can you see how many kits you have available to sell on your online marketplaces, but you can take product kitting one step further and group those available kits together within your warehouse in a process called assembled products.
A product kit is several items grouped together within your WMS, while assembled products are individual kit components that have been physically, literally, packaged together and ready to sell within your warehouse. Product kitting helps you maximize both your profits and sales, while assembled products help you improve your picking process, in turn saving you time and money.
In regards to the PlayStation 4 example, you could physically box and package all of the individual items within the PlayStation 4 kit and assign those packaged kits a location within your warehouse. So rather than having your warehouse workers navigate through the warehouse to pick each individual item within the kit, you could have them navigate to only one location to pick that single ready-to-ship, pre-packaged set.
As peak season comes to a close and the tail end of winter approaches, don’t let your warehouse processes become as lifeless as the vegetation beneath the snow. Consider implementing a product kitting procedure within your warehouse to bring some new life into your warehouse processes.
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