Can kitting still cut costs?

arrivalAccording to general manager of Arrival Electronics, Stewart Darroch, the answer is undoubtedly ‘yes’, with benefits ranging from overhead savings to reduced inventory

Component purchasing is still challenging in today’s market and is not as straight forward as it may seem. There are so many variables involved that purchasing personnel often get swamped with the options available in sourcing an electronic component solution and managing the associated supply chain. Kitting companies add to the potential confusion, with many companies wondering whether employing someone else to buy components will add extra unnecessary cost.

The answer, according to Arrival Electronics, is quite clearly: no. Using the right service company to fulfil component needs can be extremely rewarding to the customer and add value within their supply chain. This is partly because value added services within the global distribution network are becoming more and more scarce in today’s climate, thereby promoting the need for service companies, such as kitting partners and contract electronic manufacturers.

Kitting creates savings

There are many benefits to using service companies like Arrival Electronics, all of which are demonstrable. These can range from simple overhead savings on processing within procurement, accounts, quality control and logistics, to realising the benefits of global purchasing power. Often customers whose spend level doesn’t attract support from manufacturers and distributors can access support, focus and improved pricing by combining their spend with other companies.

Using a component specialist such as Arrival Electronics offers further benefits by reducing the customer’s inventory holding, producing an instant, positive impact on their cash flow.

Of course there are still some kitting companies and contract electronic manufacturers in today’s market who only operate within their remit of restrictive procedures and processes, but for Arrival Electronics, the aim is to not only to meet customer needs, but to exceed them.

Outsource for flexibility

As much as we have our own processes in place, we also recognise the need to change and adapt those procedures to fit in with and fulfil customer demand and expectation. Working to ISO9001: 2008 is a minimal requirement and this year, Arrival is working towards AS9120 standard, to enhance our offering and service commitment to current and future customers.

On the whole, I strongly believe that we, as a service company, have a huge part to play within the electronics distribution industry and that we offer a great service and support structure to customers, distributors and manufacturers. Ultimately, in the quest to remove unnecessary acquisition costs from a business, you have nothing to lose by putting kitting companies to the test.