3PL Kitting Services: Should they be a Marathon or Sprint?

October 15, 2020 by Amware Fulfillment

Who’s the world’s fastest runner?

If you answered Usain Bolt, you’re right. After all, he’s dominated the 100-meter sprint since 2008.

However, if you answered Eliud Kiphoge, you’re also correct, because he’s the current world record holder in the marathon, an event Bolt wouldn’t be able to complete in, much less win.

That’s because running is a specialty sport, with some athletes - like Bolt - who are ideally suited for short races and some - like Kiphoge - who are better suited for longer ones.  

The race to fulfill customer orders has a similar dichotomy, especially when it comes to 3PL kitting services. And it’s definitely one you should examine more closely as your business grows. Kitting is a very labor-intensive process, so you’ll want to control these costs as much as possible.

We recently spoke with Michael Nelson, who’s one of Amware’s most experienced kit building pros, to learn more.

First things first: Give us a short definition of kit building just in case some of our readers aren’t familiar with it?

3PL kitting servicesIt’s the process of taking two or more individual items and grouping them together into a single, well-organized unit for marketing, selling, and shipping purposes. Some examples include:

  • Subscription boxes that feature an assortment of related items
  • Professional skin care regiments that include cleanser, toner, face mask, and moisturizer
  • Specialty food baskets that include a complementary mix of items like cheese, crackers, and salami

Many 3PL kitting service menus feature this activity, particularly if the 3PLs in question are fulfillment specialists.

This blog’s introduction teased that there are two very different ways to approach the practice of kit building. Tell us more.

There are many times when a company’s kit building is an ultra-fast sprint to the finish, with massive numbers of personnel working to get the right mix of products picked, packed and presented “just so” within a very condensed period of time.

However, there are many other times when kit building is best approached as a methodical 5K or half-marathon, with a team that works steadily over a more extended period of time to perform the same tasks.

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Why do some people consider the sprint-like method to be advantageous?

In order to minimize ‘touches’ (and the cost associated with them), it usually makes sense to assemble all of a kit’s contents at once. And there are times, such as when one item that’s supposed to be in a kit isn’t due to arrive at a fulfillment center until shortly before shipping, when only “last minute” kit building will allow for that.

The sprint-like approach is also a helpful way to avoid overbuilding. So if a company can’t really get an accurate bead on how many kits it’s going to need because of something like a special promotion, it’s often a good call to wait and put at least some portion of its kits together on the fly. But the operative term there is “some portion.”

Let’s look at the flip side: Why do some people consider the more marathon-like approach to be advantageous?

Among other things, this approach is a great way to avoid shipping delays. Kits can be assembled many days or even weeks ahead of time and held until it’s time for them to ship. So even if there’s a major contingency that would ordinarily impact a facility’s throughput, they’ll still go out exactly as planned. (And to be clear, the kits are still being assembled all at once, so you’re still minimizing touches.)

It also helps improve accuracy and quality. The extra building time gives fulfillment centers ample time to send test shipments to clients and correct any of the potential issues that often go hand-in-hand with unique assortments. And it enables personnel to execute each build more precisely.

A marathon-like approach is also better for labor capacity and management, because a fulfillment center may be able to use full-time associates if kit assembly can be amortized over a period of a couple of weeks rather than a few work-intensive days each month. This advantage could come in very handy during times like the holidays, when a good supply of temps is never guaranteed. It’s also more cost-effective, because full-time personnel can be used to assemble kits during a facility’s less busy periods.

Which approach is best for which kind of company?

A lot of it depends on complexity and volume – and the combination of the two.

A company can opt to do large kit-building projects closer to the ship date if:

  • The pack out is relatively simple (i.e. putting three to four items into a bag instead of needing to form a custom corrugate for each tray with a well for each product to fit in, like a gift set)
  • It doesn’t need to build many different variations of kits for many different kinds of customers at once
  • Order volumes are modest
  • Temporary labor can do the job

By contrast, a company should opt to have its kit building take place over a longer period of time – say 10 to 12 business days ­– if:

  • Order volumes are extremely high
  • The labor market is tight
  • There are a large number of products in each kit
  • Kits feature a more elaborate product presentation
  • The company needs to send out many different kinds of kits at once
  • There is a preference to have full-time associates doing most of the work

You mentioned that some companies can opt to build “at least some portion” of their kits on the fly. What did you mean by that?

There are times when a hybrid approach to kit building is merited. And unlike the world of running, where you’re either good at one discipline or the other, it can actually work – regardless of whether you’re handling kit building in-house or relying on 3PL kitting services.

Some options include:

  • Part sprint/part marathon. If companies can’t forecast exactly how many kits they’ll need, they can still avoid a major last-minute surge by opting to build a portion of their kits ahead of time and building the rest after orders are received.
  • Seasonal marathon. In order to avoid seasonal bottlenecks and labor shortages, companies that usually build all of their kits on the fly can choose to build their fourth-quarter kits ahead of time and then return to their usual kit building strategy afterwards.
  • Partial kit building. When only one item in a kit is variable – such as a t-shirt that comes in small medium or large – companies can still pre-assemble the remaining portions of the kit ahead of time and then insert the final piece as orders come in.

The important thing to know is there are many different options for companies to consider and many ways a good fulfillment 3PL can help you implement them.

Speaking of marathons, it’s time to bring this blog to a close before it turns into one. Are there any additional kit-building takeaways or recommendations about 3PL kitting services that our readers should be aware of?

If the cost to assemble a kit is important to you, don’t wait until the last minute to involve your 3PL. National fulfillment companies like Amware Fulfillment can help you assess the pros and cons of these strategies and provide you with sound advice to create great looking kits, while keeping labor costs in check. Contact us today.

 

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Filed Under: Fulfillment Services