Kitting & Assembly: How RiverStar’s Services Can Save You Money On Order Fulfillment

Kitting and assembly are crucial manufacturing activities which follow sourcing and procurement and precede final assembly, quality control (QC), and shipping. These two steps also lie at the intersection of production scheduling and actual physical production, since planners need to decide what quantities of which parts will be consumed by the kits for work orders (and thus those parts won’t be available for other demand). As a result of the planning and other logistics involved in kitting and assembly, a lot of supply chain problems can crop up during kitting and assembly.

Fortunately for OEMs, RiverStar’s kitting and assembly services enable them to avoid these problems while also adding to their bottom line.

Kitting and Assembly Problems

OEMs can encounter many problems which can hinder their growth and hamper their profits at the kitting and assembly stages:

Scaling production in lock step with demand. Whether it’s ramping up long-term production capacity to meet demand for a successful product or dialing production up and down as necessary to meet seasonal demand while minimizing unused resources during low volume periods, many OEMs are seeking to break free from wasting large fixed expenditures on idle personnel and facilities. Reducing fixed costs can make these OEMs far more efficient and competitive.

Chief among these are the costs associated with labor, especially the money spent on hiring and training workers for picking parts for kits, managing inventory, and building subassemblies. Meanwhile, in today’s tight labor market, even temporary staffing only helps so much, leaving OEMs short staffed.

Underutilized investments.Capital expenses such as machinery, coupled with the maintenance and operational costs of running large warehouse facilities and distribution centers can weigh down an OEMs balance sheet if those locations aren’t fully utilized.

Location issues. For large OEMs with multiple factories and repair facilities throughout the US, their existing warehousesor logistics facilities may not be at an optimal location for quick and economical shipping to all those sites.

Loss of focus on core competitive strengths. OEMs compete more effectively in the marketplace when more of their resources are invested in the areas where that company excels at and which more directly drive revenue. Engineering-focused firms should keep their focus on design improvement and new product development. Similarly, businesses in the consumer packaged goods (CPG) industry need to keep product appearance and customer satisfaction as their top priorities.

When time, attention, and funding are diverted away from these core competencies to activities like inventory management, kitting, and production of subassemblies, OEMs risk halting production lines and growth as they learn the ropes of supply chain management.

Juggling too many logistical moving pieces. Balancing the different lead times and prices of multiple suppliers with production scheduling and demand from warranty repairs is just one of the many time-consuming, multi-variable juggling acts OEMs take on when they handle their own kitting and assembly. Others include de-kitting to shuffle parts around due to rapidly changing priorities, dispositioning nonconforming material from receiving inspection, slipping arrival dates, and delays.

How RiverStar Can Help

As a full-service contract manufacturer, RiverStar offers OEMs kitting and assembly services which can free OEMs from these and other costly supply chain problems.

We have the scalability to both grow with our customers and to accommodate large seasonal changes in demand for hardware kits, subassemblies, and completed assemblies. Our OEM customers also enjoy our economies of scale, which give them multiple areas of cost savings:

    • Both our capital and operational expenses are spread over all our customers, allowing us to pass on the savings from our economies of scale to all our customers. Besides freeing our OEM partners from costly machinery and facility fixed costs (and the risk of underutilizing them), partnering with us allows OEMs to benefit from the lower part costs and shorter lead times we are able to negotiate from our suppliers due to our large orders.
    • Those lower prices include more than just the components used to build products. RiverStar also secures lower prices shipping and for boxes, pallets, crates, bins, bags, and other packaging materials—savings which we then pass on to our customers.
    • Speaking of packaging, another way we boost our customers’ bottom line is through reduced spending on packaging and shipping for popular kits by using custom-sized boxes. This reduces the size and weight of shipping kits to our OEM partners since we can pack more kits or subassemblies in a single pallet, skid, or crate.
  • RiverStar can lift the logistical load off of OEMs so they can stay lean and do what they know best. With over 20 years of supply chain management expertise, robust procedures and systems in place for efficiently managing inventory and balancing production schedules, and an extensive supplier network, RiverStar’s kitting and assembly services are the supply chain solutions OEMs are looking for.

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Kitting & Assembly: How RiverStar’s Services Can Save You Money On Order Fulfillment
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Kitting & Assembly: How RiverStar’s Services Can Save You Money On Order Fulfillment
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Kitting and assembly are crucial manufacturing activities which follow sourcing and procurement and precede final assembly, quality control (QC), and shipping. These two steps also lie at the intersection of production scheduling and actual physical production, since planners need to decide what quantities of which parts will be consumed by the kits for work orders (and thus those parts won’t be available for other demand).
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RiverStar Inc.
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