How to Improve Profitability with Kitting

How to Improve Profitability with Kitting

Whether your products are sold preassembled or “some assembly required”, kitting can speed up assembly and packaging, reduce errors and returns, and improve your company’s bottom line.

What Is Kitting?

Kitting is the process of creating a “kit” of components required for a particular assembly or task. The kit contains all the items needed to complete that assembly or task, such as parts, tools, instructions, and any other necessary materials.

How Does Kitting Work?

Here is a general overview:

1. Identify the necessary components and materials

The first step is to identify all of the components, parts, instructions, and anything else required for the assembly or task.

2. Assign a New SKU

Assign a unique SKU (stock keeping unit) for the new kits, which are treated as an individual item for inventory purposes.

3. Assemble and Label the Kits

Gather the needed components, parts, instructions, etc. and prepare the kits, each containing the correct quantity of items. Kits are usually bagged, carded, or shrink wrapped. Label the kits with the new SKU.

4. Update Inventory

Adjust inventory counts to remove the individual contents and add the new kit quantities.

5. Store or Preposition the Kits

After the kits are assembled and labelled and inventory counts updated, move them to inventory until they are needed. Alternately, you may decide to preposition the kits at the production line or assembly area.

What are the Benefits of Kitting?

Kitting helps businesses streamline operations and improve profitability in several ways. Benefits of kitting can include:


Improved Efficiency

Kitting reduces the labor required to pick required items by grouping all needed items into a single kit, identified by a unique SKU. Production or assembly tasks go faster because all items needed for a particular step or task can be provided in one kit.

Reduced Errors

Kitting greatly reduces errors and mistakes by ensuring that all needed items for a task are included in the kit. This helps eliminate missing components, incorrect parts, and incorrect assembly, which can lead to production delays, rework, increased costs, and customer dissatisfaction.

Improved Inventory Management

Kitting can lead to better inventory management and reduced waste. By combining several component items into a single SKU, businesses can reduce stock storage space, simplify counts, avoid overstocks and exces inventory, and help eliminate unexpected stock outages.

Improved Quality

In addition to reducing errors and rework, kitting can lead to improved product quality and reduced customer complaints. Kitting can help when standardizing production processes by ensuring that products are assembled consistently according to the same specifications and instructions. Quality assurance techniques such as inspection, sampling, and testing can be applied at the time that kits are prepared.

Customer Satisfaction and the Bottom Line

Kitting increases customer satisfaction in a couple of ways. For customer-assembled products, kitting makes the assembly easier by ensuring all needed parts are in one place, ready for use. For all products, improved quality leads to customer loyalty and a stronger reputation.


Kitting helps streamline production processes, improve inventory management, and reduce labor costs — all off which improve profitability.

If You’d Like to Learn More

At Component Packaging, we’re experts at product assembly, packaging, and order fulfillment. Our packaging and fulfillment specialists would love to show how we can help simplify your business processes and improve your bottom line:

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