Outsourced Kitting: The Fastest Way to Streamline

For companies striving to achieve lean manufacturing, time and resources must be allocated effectively. One crucial question to consider is: why expend valuable effort on sourcing, procuring, and kitting electronic components in-house when these processes can be streamlined through outsourcing?

By exploring outsourced component kitting, manufacturers can focus on developing and improving products, serving customers, and reducing lead times, while simultaneously cutting costs and eliminating inefficiencies.

Optimising Workforce Expertise

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A company’s staff should be engaged in activities that maximise their expertise, such as sales, product development, testing, and assembly. Spending valuable time counting and sorting components diverts attention away from other areas, resulting in unnecessary labour costs and operational bottlenecks.

Outsourced kitting provides access to a vast network of suppliers while consolidating your own interactions to a single point of contact. This eliminates the need to negotiate with multiple vendors, track stock availability, and manage countless procurement processes, freeing up internal resources for more strategic activities.

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The Complexities of In-House Kitting

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The traditional in-house kitting process comes with many challenges. Consider a single component moving through the manufacturing value stream:

1. A customer places an order, which is entered into the system, generating a work order and purchase requirement for any materials not in stock.
2. The procurement team must then check pricing and lead times from multiple suppliers, often requiring follow-ups and manual data entry.
3. Once supplier quotations are received, purchase orders must be raised and processed.
4. As production approaches, additional time is spent expediting any undelivered orders, sourcing alternatives, and resolving delivery discrepancies.
5. Upon arrival, goods-in teams must receive, inspect, and process the components, often dealing with issues such as split reels or incorrect parts.
6. Production staff then allocate resources to picking, counting, and kitting materials, taking away from actual manufacturing output.

For a Bill of Materials (BoM) with 70 lines this process multiplies exponentially, resulting in substantial, often uncalculated, costs. These inefficiencies extend beyond procurement:

• Multiple purchase orders are raised and managed.
• Goods-in teams handle numerous separate deliveries.
• Accounts process multiple invoices and payments.
• Production incurs additional labour costs due to rescheduling and overtime.
• Sales teams frequently update customers on shifting delivery timelines, often leading to dissatisfaction.

This fragmented approach disrupts workflow, increases overheads, and generates non-recoverable expenses.

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The Benefits of Outsourced Kitting

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When component kitting is outsourced, the process is significantly simplified:

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1. The customer order is received.
2. The system generates procurement requirements.
3. The BoM is uploaded or emailed to the kitting provider.
4. Production-ready kits are delivered to the facility.
5. Accounts process one invoice instead of multiple transactions.
6. Production receives a complete, line-ready kits with no unexpected shortages.

By transitioning to outsourced kitting, manufacturers benefit from:

• Reduced procurement complexity.
• Minimised administrative overheads.
• Improved cash flow through delayed ownership of stock.
• Lower stockholding requirements.
• Shortened lead times and enhanced production efficiency.

A Smarter Approach to Manufacturing

For manufacturers interested in lean manufacturing and cost savings, outsourced kitting is a great solution to explore. It not only simplifies supply chain management but also enhances overall operational flow, giving companies time and money to focus on innovation, quality, and customer satisfaction.

Colmworth Electronics specialises in procurement and electronic component kitting. When you work with us you will receive production line-ready kits, improving efficiency across your warehouse, assembly lines, and logistics operations.

Contact us today, or submit your BOM now for a free quotation.

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