How do I plan inventory for kitted products?
Kitting—assembling multiple individual products into a bundle, gift set, or variety pack—creates unique inventory planning challenges. You're not just tracking finished goods; you're managing the relationship between components and kits, forecasting at both levels, and deciding when to assemble versus when to hold components.
Done well, kitting lets you create new SKUs and offerings without new manufacturing. Done poorly, it leads to component shortages, stranded inventory, and endless complexity. Here's how to plan for kitted products effectively.
Understanding kit structures
A kit is a finished product composed of other finished products. This is different from a bill of materials, where components are raw materials transformed in manufacturing.
Kit example: A "Snack Sampler Box" containing one bag each of three different chips flavors. Each chip flavor is a standalone finished product with its own manufacturing and inventory. The kit is assembled by putting three bags into a gift box.
BOM example: A bag of chips requires potatoes, oil, seasoning, and packaging film. These components don't exist as sellable products—they're transformed in manufacturing.
The planning implication: kit components compete for inventory. When you commit a bag of chips to a gift set, that bag can't fulfill standalone demand. BOMs don't have this competition—you don't sell raw potatoes to consumers.
Forecasting kits versus components
The first question in kit planning: where do you forecast?
Option 1: Forecast at the kit level and explode requirements down to components. This works when kits are your primary selling unit and component-only sales are minimal.
Option 2: Forecast at the component level and treat kits as another source of demand. This works when components sell in high volume independently and kits are a smaller portion of business.
Option 3: Forecast both independently and reconcile. This is most common for brands with significant volume in both kits and components. You forecast standalone chip demand and kit demand separately, then sum component requirements.
Planster supports all three approaches. You can define kit structures (which components make up each kit) and the system calculates total component demand from both kit and standalone forecasts.
Managing component allocation
When the same product appears in multiple kits and sells standalone, you need allocation rules.
First-come allocation: Components are committed to whatever demand appears first. Simple but can leave high-margin kits short if standalone orders come in first.
Priority-based allocation: Assign priority levels. Maybe kits for your biggest retailer get first claim, then standalone D2C, then other kits. This ensures your most important channels are protected.
Reserve allocation: Hold specific quantities for specific purposes. Reserve 1,000 units of your best-selling flavor for holiday gift sets, and those units aren't available for other demand until the reserve is released.
Document your allocation logic and review it quarterly. Allocation rules that made sense last year might not fit this year's channel mix.
Timing the assembly
A key decision in kitting: when do you assemble?
Pre-build strategy: Assemble kits in advance and hold finished kit inventory. This works when kit demand is predictable, kits have long shelf life, and assembly capacity is limited. You trade component flexibility for fulfillment speed.
Just-in-time assembly: Hold component inventory and assemble kits as orders come in. This maximizes flexibility—components can go to kits or standalone demand until the last moment. It requires fast assembly capability and works best for lower-volume or customized kits.
Hybrid approach: Pre-build a base quantity to cover expected demand and assemble additional kits on demand. This balances flexibility with fulfillment speed.
Your assembly location matters too. If kits assemble at your co-packer, you need to ship components there and coordinate assembly scheduling. If they assemble at your 3PL, assembly can happen closer to fulfillment.
Planning for seasonal kits
Gift sets and holiday bundles often have short, intense selling seasons. This amplifies planning challenges.
Forecast conservatively at first. If this is a new kit, start with a conservative forecast and be prepared to assemble more if demand exceeds expectations. It's easier to add kit inventory than to break down unsold kits.
Plan component availability. Your holiday kit needs components that might be in high demand for their standalone versions. Ensure you've allocated enough component inventory for kit builds before the season starts.
Consider kit-specific components. Custom packaging for seasonal kits (holiday boxes, special inserts) often has long lead times. Order packaging early even if you're still finalizing component quantities.
Have an exit plan. What happens to unsold kits after the season? Can you break them down and sell components? Will you discount heavily to clear? Plan this before you overbuild.
Common kitting planning mistakes
Treating kits as independent products. If you forecast and plan kits without considering component constraints, you'll commit to kit sales you can't fulfill because components ran out to standalone demand.
Over-building slow-moving kits. Kits that combine a popular product with a slow-mover often disappoint. The slow-moving component gets stranded in kits while you run out of the popular item for standalone sales.
Ignoring assembly capacity. Kitting takes time and space. If you need 10,000 kits assembled in a week and your team can do 1,000 per day, you have a problem. Plan assembly capacity like any other production constraint.
Not tracking kit-level metrics. You need to know kit sell-through rates, not just component inventory levels. A kit that's not selling might be hiding a component problem you'd catch earlier if you tracked kit movement.
Key takeaways
- Kits are finished products made from other finished products—components compete for inventory between kit and standalone demand
- Choose a forecasting approach: kit-level, component-level, or independent forecasting with reconciliation
- Establish component allocation rules to prioritize which demand gets inventory when components are constrained
- Decide on assembly timing: pre-build for predictable demand, just-in-time for flexibility, or a hybrid approach
- Plan seasonal kits early, especially for custom packaging with long lead times
Frequently asked questions
How do I decide which products to bundle together?
Successful bundles often pair complementary products (items used together), combine a bestseller with a slower-mover for trial, or create variety (sample different flavors). Avoid bundling products with very different velocities—the slow mover becomes a constraint and the fast mover gets stranded.
Should I track kit inventory separately from component inventory?
Yes. Once assembled, a kit is its own SKU with its own inventory record. You need visibility into both assembled kit inventory (what's ready to ship) and component inventory (what's available for assembly or standalone sales).
How do I handle returns of kits?
Define your return policy clearly. You can accept the kit back as a kit, break it down into components (if packaging allows), or treat it as unsaleable. Returned kits often can't be resold as kits due to packaging damage, so plan for some shrinkage.
What if kit demand exceeds my component supply?
You have three options: allocate available inventory to the highest-priority kit orders, substitute components (if your bundle allows flexibility), or communicate with customers about delays. Having allocation rules defined in advance makes this decision faster.
Can Planster handle kit planning?
Yes. Planster supports bill of materials for both manufacturing (raw materials to finished goods) and kitting (finished goods to bundles). You can define kit structures, see component requirements from kit demand, and track inventory at both levels. The system calculates total component need across all kit and standalone demand.