Manufacturers ask their Distributors to handle kitting for them as part of their outsourcing of non-core tasks. Kitting entails collecting a bunch of related parts into a single kit that has its own SKU number. For example, in automotive manufacturing, kits of parts are delivered to the next stage of production at exactly the time that a kit is needed.
The kitting process makes a lot of sense as it delivers benefits internally and externally, and when done right, adds efficiency to your operations.
What are the benefits?
Kitting has a number of benefits:
- Reduced warehousing requirements: A kit has the double benefit of not only taking up less space on your shelf less SKUs to manage, as well being considered a single item for shipping costs.
- Speeds up manufacturing processes: With everything needed ready to go, the production process can reduce the number of stops needed to gather materials, helping things to move along faster.
- Better Inventory Control: any issues or shortages associated with the parts are identified before the kits are assembled and finalized.
With its many benefits come the complexities of quoting for kits. While many components have been bundled up into one kit, when sourcing for them, each item still needs to be sourced individually. If, for example, a kit consists of 20 different components, the procurement team needs to:
- Get component costs from vendors
- Add in the cost of labor
- Roll up all the quantities and costs into a finished kit
- Mark up the finished product for the sale price.
This involves managing multiple prices for a single item, and it can be easy to duplicate or enter in the wrong prices when using an Excel spreadsheet, the smallest inconsistency can result in repercussions to your fiscal results. Accessing and communicating with vendors globally also means a lot of work for procurement professionals.
Manually verifying each step of the quoting process for a kit is not a viable process, as it is time consuming and still prone to error. It is vital to have a system in place that streamlines this process and lets them focus on their business.
Fortunately, sourcing software can help you dramatically improve your sourcing processes at a cost you can afford. QSTRAT Sourcing is an extremely affordable way to streamline supplier communications. QSTRAT Sourcing is a web-based software application designed specifically to simplify and automate your sourcing process. Adobe’s PDF forms are used to collect quote information, ensuring the secure transfer of sensitive pricing information.
Automate the RFQ process and see dramatic increases in efficiencies. Significantly reduce errors, simplify documentation and focus on optimizing the purchasing power of your company. Get up and running fast! We will create or configure existing templates to your exact specifications and have you up and running in just 5 days. Leverage RSS technology with Quote-Cast™ to make real time updates a reality. Want to know the status of a particular RFQ, supplier response or pricing change?
Other features of QSTRAT Sourcing include:
- Create RFQs with ease and issue to suppliers at the click of a button
- Create re-usable templates for any items you purchase
- Automatically track all communications with suppliers in one location
- Manage customer information and relationships
- Qualify suppliers and track performance
- Full trading company solution
- Manage contracts with customers and suppliers