Kitting is combining several separate items into one thing you sell, store or ship as a unit. A gift basket. A starter kit. A repair kit with the gasket, the two bolts and the tube of sealant. Three products bundled for a promotion. The parts exist separately in your warehouse, and the kit is what the customer orders.
That is the whole definition. What it does to your inventory is the part worth reading about.
The counting problem
A kit exists twice. Before assembly it is six components on six shelves. After assembly it is one thing in one place. Both are true at different times, and your stock count has to survive the transition.
Get it wrong in one direction and you oversell components you already consumed into kits. Get it wrong in the other and you have 40 built kits that the system still believes are loose parts, so it cheerfully promises those parts to somebody else.
The usual workaround is to keep kits out of the system entirely and assemble them by hand when an order arrives. That works at low volume. It stops working the first time you promise a kit you cannot build, because someone used the last gasket on a repair.
Two ways to run kits
They have different failure modes, and most operations end up doing both.
Assembled ahead
You build 50 kits on Monday. The components come out of stock, the kits go in, and from then on the kit is a real thing with its own location and its own count. This suits predictable demand and fast shipping. The cost is committed inventory: those components are kits now, whether or not anyone wants kits this month.
Assembled on demand
The kit exists as a definition rather than as stock. When an order comes in the system checks that every component is available, and the kit is built at pick time. Nothing is committed early. The cost is that availability becomes a calculation across every component, and the scarcest one sets what you can promise.
Ahead for the sellers, on demand for the long tail, is where most people land. Whichever you pick, the thing that has to hold is that a component is counted once. It is either loose or it is in a kit, never quietly both.
Where it gets harder
Kits inherit every complication their components have.
If a component is lot tracked, the kit has to record which lot went into which kit, or the traceability chain stops dead at the assembly bench. Same for a serialized component: a kit containing a serialized controller board should be able to tell you which board.
Disassembly needs to work too. Returns come back as kits and often get broken down, and stock that cannot be un-kitted accumulates as a discrepancy nobody can explain six months later.
How Knowledge ERP handles it
Kits are part of the Inventory module. A kit is defined by its components, and assembling one consumes the specific units that went into it rather than decrementing a shared counter.
Because those components are individually tracked units, their lot and serial data travels into the kit instead of being lost at assembly. A recall on a component still resolves to the kits it ended up in, and to the customers those kits shipped to. Disassembly puts the units back. Barcodes are generated for the kit as well as its parts, so an assembled kit scans like anything else on the shelf.
When it is worth the complexity
Kitting earns its keep when you sell a combination often enough that hand assembly is a bottleneck, when the combination has to stay traceable, or when you keep promising bundles you cannot build.
If you sell four gift sets in December and nothing else all year, keep doing it by hand.
Find out whether you actually need kits
The 30-day trial is long enough to define your real kits and watch what a month of orders does to the component counts.