Kitting services have been around for many years and most OEM and EMS companies are familiar with the concept of receiving a complete bill of materials, ready to use on the factory floor.
The true value of kitting however, can only be appreciated by recognising that this type of service is not simply about grouping together all the components that make up a bill of materials – although this demands considerable effort and attention. Kitting also requires a coherent programme of logistical tasks that enable all the right parts to be delivered to the right place at the right time.
These tasks include managing obsolescence, handling lead-time issues and sourcing alternative parts, as well as aspects such as materials inspection and device preparation. Moreover, the service must be able to deliver consistently, reliably, and for the duration of production. Manufacturers that choose to deal with these challenges in-house can incur hidden costs between purchasing and production, which add as much as 20 per cent to the visible price of components.
At Paragon, the traditional vision of kitting is one element within a total component management programme. This comprehensive supply-chain solution enables OEMs to outsource their entire component acquisition to avoid the complexity and costs associated with handling the day-to-day complications of purchasing electronic components.
Having introduced a number of industry firsts such as the reel-box for SMT-based kits and assembly-ready kits, Paragon’s total component management service builds on a history of providing innovative kitting solutions for over 20 years. It provides a single, dependable source for all components used on one PCB or a suite of boards. All materials are labelled, prepared and delivered assembly ready, without the need for further inspection or preparation.
With complete, assembly ready kits arriving at production, OEMs are able to free up working capital previously tied up in component stock and part-finished PCB assemblies. In many cases, customers are able to ship finished products before paying for any components.
In recent times, the threat of electronic component counterfeiting has become a challenge to all component sourcing activities, including kitting.
Unlike the hidden costs of acquisition, which many companies do not realise they pay a high price for, the costs of counterfeit components can become apparent very quickly. Some counterfeit components have no circuitry inside the bogus package. This could actually be the best-case situation for manufacturers, since the problem will be easy to spot as soon as a completed assembly is tested.
A greater threat comes from non-genuine components that appear to perform as they should, allowing sub-standard products to escape from the factory. Once in the field, failures can incur inestimable costs in terms of warranty repairs, damage to brand image and, in extreme cases, the cost of litigation relating to the consequences of potential failure.
Component suppliers need to be equipped to protect their customers. To this end, Paragon has a specialist subsidiary company, Vigilant Components, with a dedicated component testing and counterfeit detection laboratory, Facilities include x-ray inspection, powerful microscopes and electrical test equipment, enabling Paragon to verify the provenance of customers’ components and therefore provide maximum protection against the costs of defective and counterfeit components entering the supply chains.
Counterfeit protection has quickly entered the kitting mix and will become a defining element of the best supply-chain and component management services in the coming months and years.