Warehouse Kitting Process Guide: Reduce Labor and Improve Order Accuracy

A Story of Change in the Warehouse

Picture this: A mid-sized electronics company in Ohio was struggling with late shipments, rising labor costs, and frustrated customers. Every time an order came in, warehouse workers scrambled to pick multiple parts scattered across different aisles. Missing components, mislabeling, and overtime hours became routine. Customer complaints piled up, and the company realized that inefficiencies were eating away at profit margins.

Then, the operations team decided to try something different—warehouse kitting. Instead of handling parts individually, they began pre-assembling kits of commonly ordered items. Within months, labor hours dropped significantly, picking accuracy soared, and customer satisfaction improved. What once felt like chaos transformed into a streamlined operation.

This isn’t just their story. It’s a scenario playing out across countless U.S. warehouses where leaders are rethinking fulfillment strategies to cut costs and improve accuracy.

What Exactly Is Warehouse Kitting?

Warehouse kitting is the process of grouping individual items, parts, or components into ready-to-ship kits before an order is received. Instead of picking ten separate SKUs for one customer order, a pre-assembled kit is created in advance, making fulfillment faster, easier, and less prone to error.

Think of it like this: instead of making a sandwich by pulling bread, lettuce, tomato, cheese, and turkey separately every time, you prepare the sandwich in advance. When someone orders it, it’s ready to go.

In warehouses, kitting involves:

• Identifying frequently ordered item combinations.

• Assembling them into kits ahead of time.

• Packaging and labeling kits for easy picking.

This approach turns complex, time-consuming picking processes into simple, one-step tasks.

The Benefits of Warehouse Kitting

1. Reduced Labor Costs

Labor is one of the highest expenses in U.S. warehouses. According to the U.S. Bureau of Labor Statistics, warehouse and storage sector wages increased by over 20% in the past five years. Every minute saved in the fulfillment process translates directly into cost savings.

With kitting, workers spend less time walking aisles and handling items individually. Pre-assembled kits eliminate repetitive picking, cutting labor requirements and reducing overtime hours. A study by Aberdeen Group found that companies using kitting reduced picking labor costs by up to 30%.

2. Improved Order Accuracy

Errors in order fulfillment are costly—not only in returns and replacements but also in lost customer trust. The Warehousing Education and Research Council (WERC) estimates that order picking errors cost U.S. businesses an average of $59 per error.

Kitting dramatically reduces mistakes because workers handle a single kit instead of multiple SKUs. This streamlined process minimizes mispicks, mislabeled items, and missing components. As a result, accuracy rates often climb above 99%.

3. Faster Order Fulfillment

Speed matters in today’s market where customer expectations are shaped by Amazon-level efficiency. Kitting allows warehouses to ship orders faster because pre-assembled kits are ready to go. Instead of spending time pulling parts, workers simply scan and ship a kit. This faster throughput improves on-time delivery performance and enhances customer satisfaction.

4. Inventory Optimization

Kitting also helps warehouses better manage inventory. By grouping products that are often sold together, warehouses can avoid excess handling of slow-moving SKUs. This leads to better stock visibility and more strategic replenishment.

Real-World Industry Insights

• A report by DHL Supply Chain found that 59% of supply chain leaders view labor shortages as one of their top challenges in 2024.

• According to McKinsey, automating processes like kitting can boost productivity by 20–40%.

• The WERC 2023 DC Measures report highlights that best-in-class warehouses achieve order accuracy rates of 99.7%, many of them using kitting strategies.

These statistics highlight what forward-thinking warehouse managers already know: kitting is no longer optional—it’s essential for staying competitive.

How SSI Helps U.S. Companies with Kitting and Assembly

For companies looking to implement kitting without adding internal complexity, Strategic Sourcing International (SSI) offers tailored solutions. SSI provides kitting and assembly services that help U.S. businesses streamline fulfillment, reduce labor strain, and improve accuracy. By leveraging SSI’s expertise, companies can scale efficiently without increasing operational costs, freeing their teams to focus on growth instead of firefighting warehouse issues.

Final Thoughts: Is Your Warehouse Ready?

The Ohio electronics company’s transformation is just one example of how kitting can turn inefficiencies into opportunities. By reducing labor, improving accuracy, and accelerating order fulfillment, warehouse kitting delivers measurable impact.

The question now is simple: Is your warehouse ready to embrace kitting and gain a competitive edge—or will inefficiencies continue to drain your bottom line?