When running the works order analysis from for BI items for a project I have a lot of sufficient stock but allocated elsewhere. This tells me unless I re-allocate stock then I have 20 components that I would be short of with the first item by 5.
The stock is allocated to something else meaning it could be released, but that would have to be done first.
The stock is kitted to the component itself, so it is essentially allocated to the component itself, but the analysis is still correct in saying that the stock is allocated elsewhere because kitting isn't a process which always take place. So, in theory, if the kit was released and the stock allocated elsewhere then you would still be short of 5 on that component.
If the stock has been issued then you can confirm the kit and that would update the components and the analysis report, but until that takes place, the stock is essentially put to one side until the kit is confirmed or cancelled.
As you kit everything and a bespoke manufacture of machinery, you will have to use the Works Order Component Report.