Cost Efficiency Without Compromise: The Value of Custom Seal Kits and Stocking Programs
How much is downtime costing your business? Spoiler: it’s likely more than you think. From unexpected production halts to last-minute overnight shipping fees, inefficiencies add up.
That is where solutions like custom seal kits and stocking programs come into play.
A seal kit includes everything you need to make a seal happen in one bag. These parts are individually packaged and labeled according to your instructions. Then, they are bundled together in one bag that is easy to grab and head into the field or onto the assembly line. A stocking program ensures you always have these in hand without over- or understocking.
So, how exactly can this impact your productivity and bottom line?
1. Reducing Overstock and Stockouts
When we talk about downtime and stocking issues, we often think of being out of stock. This is a problem, but overstocking can also become a financial drain. Over-ordering can lead to wasted resources and storage risks while increasing te risk of the parts becoming obsolete.
Your inventory carrying cost is the total cost of holding and managing unused inventory. As a general rule of thumb, your carrying cost usually is 20-30% of your inventory value.
If keeping your sealing parts inventory overstocked as a safety net isn’t the answer, what happens if you understock?
Stockouts could be more damaging and cost you even more. When you run out of essential sealing components, production grinds to a halt. And downtime isn’t cheap:
- Automotive manufacturers can lose over $2 million per hour due to unplanned downtime.
- Oil and gas facilities face an average downtime cost of $220,000 per hour, which amounts to $84 million per facility annually.
- In general, large manufacturing plants average a cost of $532,000 per hour when downtime strikes.
The cost of unplanned downtime has increased over the last two years. Between 2021 and 2023, Fortune 500 companies saw an 8% increase in costs associated with unplanned downtime.
How do kits help? According to your Bill of Materials (BOM), packaging kits ensure you have everything you need without running low on parts. Setting up a customized stocking program keeps the right amount of material on your shelves without going dramatically over or under.
2. Lowering Shipping and Handling Costs
One of the big benefits of custom kitting is the ability to combine multiple components into a single shipment. Instead of receiving several separate boxes for different parts, you get everything packaged together. This reduces shipping costs significantly because you’re not paying for multiple deliveries or dealing with the extra logistics of coordinating them.
Fewer shipments also mean fewer resources used in packaging and transportation, which helps lower your carbon footprint. The efficiency gained from consolidated shipments not only saves money but also supports sustainability goals by reducing the environmental impact of your supply chain.
Another major factor you should consider is reducing the cost of emergency orders. Overnight deliveries can be expensive, not to mention the cost of the downtime and adjusting your manufacturing schedules.
Custom seal kits and stocking programs prevent this by ensuring you always have the right parts, reducing or eliminating these costly shipping emergencies.
3. Cutting Down on Administrative Costs/Time
Do you know how much it costs for you to place a purchase order (PO), excluding the cost of the goods purchased?
On average, processing a single PO can range from $50 to $500. Businesses with automated systems typically experience costs around $50 to $150 per order on the lower end of that scale. On the other hand, manual or complex processes can push the cost toward $500 or more, especially in industries with stringent regulatory requirements, like oil and gas, where PO processing costs can even exceed $1,000.
You can significantly lower these processing costs by reducing the need for multiple POs through custom seal kits and a stocking program. Fewer orders mean fewer administrative tasks, less time spent on approvals, and overall cost savings.
By setting up automated reordering systems and a stocking program, you can ensure critical parts are always available without constant manual monitoring. When stock levels hit a predefined threshold, the system automatically triggers a replenishment order, eliminating the risk of running out of essential components. This not only reduces the risk of stockouts but also saves significant time and effort, allowing teams to focus on more value-added tasks rather than tracking inventory levels.
4. Reducing Productivity Waste
Custom seal kits can dramatically minimize productivity waste, especially for technicians in the field and on assembly lines. Instead of wasting time hunting for individual parts while included in the Bill of Materials (BOM), techs receive everything they need in one kit. This not only reduces the time spent searching for components but also ensures that no part is accidentally overlooked, which can happen when gathering items manually.
By reducing time spent on non-value-added tasks, custom seal kits enhance operational efficiency and ensure that production or maintenance processes run smoothly and without interruption.
5. Reducing Waste and Product Loss
The benefits of custom seal kits and stocking programs go beyond convenience. They also cut down on waste and loss.
By avoiding overstocking, you reduce the risk of parts becoming obsolete, a common issue when demand shifts or new versions of components are released. This translates into less wasted inventory and more efficient use of space and resources.
Moreover, stocking programs and seal kits ensure you get the exact amount of each part tailored to your specific BOM. This reduces excess, eliminates the need for extra inventory, and minimizes the likelihood of parts getting damaged or misplaced. When everything is pre-packaged and delivered in accurate quantities, you also cut down on the chaos of sorting through large stockpiles, which often leads to mishandling or product loss.
6. Long-Term Supplier Relationships = Long-Term Savings
One of the biggest perks of a custom kitting program is the ability to buy in bulk. By consolidating your parts and placing larger, more strategic orders, you can take advantage of volume discounts that save you money. Suppliers are more willing to offer better rates when you’re ordering higher quantities, and with a custom kitting solution, you’re bundling everything into one efficient package. That means fewer, larger orders — and bigger savings in the long run.
Aside from saving money on ordering, you can also predict the cost of these orders. With a customized stocking program, you gain more control over your costs. You’ll be able to forecast your expenses better and manage your budget, knowing that your inventory is being replenished regularly. Plus, custom programs can shield you from fluctuating supply chain prices. When you’ve locked in predictable orders, you’re less vulnerable to market volatility, helping you maintain financial stability and focus on growth.
Control over your supply chain is critical. A reliable stocking program helps you maintain that control. When you’ve got a dependable partner keeping your inventory stocked with the right parts, you reduce the risk of delays or stockouts. Fewer disruptions mean you avoid those last-minute, unplanned expenses that come from emergency shipments or production halts. It’s all about building a stable relationship that ensures your parts are there when you need them—no surprises.
By cultivating a long-term partnership with a reliable supplier through custom kitting, you’re not just getting parts — you’re securing long-term savings, operational stability, and cost predictability.
7. Maintaining Quality Without Extra Costs
There’s a common misconception that improving cost efficiency means sacrificing quality, but custom kitting turns that idea on its head.
With custom kitting, you don’t cut corners; you ensure that every component meets the highest standards.
By bundling parts together in one kit, custom kitting delivers consistency and high-quality components every time. Each part is pre-checked and packaged with your customer part number or barcode, depending on your needs, reducing the risk of errors or damaged materials.
Maintaining quality comes with its costs, which typically fall into three categories:
- Appraisal Costs: These are the costs associated with testing, inspections, and audits to ensure products meet quality standards.
- Prevention Costs: This includes investments in staff training, process improvements, and system upgrades to prevent defects from occurring in the first place.
- Failure Costs: These arise when things go wrong—defects, rework, customer complaints, or even recalls.
For many companies, the combined cost of quality control can account for 10% to 15% of their revenue.
Custom seal kitting helps you stay ahead of these costs by delivering accurate and complete kits that minimize the risk of errors or defects downstream. This proactive approach to quality control reduces the need for expensive rework or corrections.
Custom Seal Kits and Stocking Programs Improve Your Bottom Line and Efficiency
Custom kitting and stocking programs offer a cost-efficient way to streamline operations without sacrificing quality or performance. By bundling exactly what you need into one package, these programs help businesses reduce overstocking, minimize the risk of stockouts, and cut down on administrative costs. With fewer handling steps and pre-packaged components, operational efficiency improves while maintaining high-quality standards. This ensures parts are delivered in perfect condition and ready for immediate use, reducing downtime and waste.
Marco Rubber takes customization to the next level.
If it’s something we sell, we can include it in a custom kit, making the solution as flexible as your business requires. We even offer user experience (UX)-based options, such as custom labeling, to personalize kits and make them even more usable and efficient for your team.
Ready to streamline your processes and cut costs? Explore how Marco Rubber’s custom kitting and stocking programs can optimize your business operations. With incredibly customizable options and a focus on quality, we ensure everything you need is packaged and delivered exactly to your specifications.