Kitting type evaluation tool: Inbound or Outbound?: company study case
Tran, Anh (2022)
Tran, Anh
2022
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2022110922399
https://urn.fi/URN:NBN:fi:amk-2022110922399
Tiivistelmä
Inventory kitting, which is the procedure of grouping, packaging, and selling usually separate items together, has grown popular as its combined characteristics from make-to-stock and make-to-order. In the context of company study case, two types of kitting are studied - inbound kitting (process of creating a new stock keeping unit (SKU) from a group of materials) and outbound kitting (process of grouping different separate materials together when sales for the kit is generated). The aim of the study is to create an evaluation tool on current type of kitting (outbound or inbound) and decide if some kits shall be changed from one type of setting to the other. The research questions are: “What are the factors that affect the decision whether inbound or outbound kitting to be used?” and “How to make a decision to switch to the more cost-effective kitting type?” in which the second being the main one. The main theories are inventory management, cost reduction as a driver, delivery performance, kitting, and economic order quantity. The research method chosen was action research which the data collection method was qualitative interview, and the method of analyzing data was thematic analysis. The results show that the factors which affect kitting decision can be categorized into two groups: planning factors (demand, cost of creation of kit, obsolescence risk, criticality) which bring a different result on annual cost depending on what kind of kitting is used, and design factors (technical changes, numbers of components, dimensions of components, variability of a family of kits) which do not bring a different result on annual cost regardless of what kind of kitting is used. An Excel sheet was created which gave the decision if the kitting type had to be change from one to another. The tool calculated annual cost for the current kitting type and estimation annual cost for the other kitting type. With the tool’s suggestion, a decrease of 8.5% of total number of outbound kits sales order lines was witnessed, which would considerably improve the delivery performance. The tool forecasted to make a saving impact of 8% total costs for both types of kitting in the first year. The research was limited to the definitions of inbound and outbound kitting in the company case as they are not universal terms.