Stock Keeping Unit Determination
- A Stock Keeping Unit or SKU is a number that is assigned to a product for the purpose of inventory management and ease of tracking. In other words, a stock keeping unit is a unique identifier assigned to each product for easier and more efficient record-keeping.
- SKU codes are used for the identification and tracking of products.
- SKU are absolutely mission-critical in any warehouse, manufacturing or retail environment because they simplify the act of inventory management and analysis by ensuring that your people speak with a common language.
- SKU ensure that there can be no confusion over what make, model, brand or specification of a product a customer ordered, because there’s only one code for every permutation.
Stock Keeping Unit
- SKUs are alpha-numeric codes, that is, they use both numbers and letters.
- SKU are designed to be legible by humans at a glance (unlike a UPC) and offer important information.
- For example:
- A blue, cotton T-shirt, size medium: T-COT-MED-BL
- A 1kg jar of chocolate peanut butter: PB-1KG-CHOC
- An A/C condenser made by “Air Co.”, part number 3369, designed for a Toyota car: AICO-ACCON-3369-TOY
Importance of Stock Keeping Units
- SKUs are highly important and commonly used by retail stores, warehouses, and product fulfilment centres.
- Stock keeping units have many key uses, such as the following:
- Identifying a specific product
- Tracking inventory to know how many of a specific product is available
- Helping reconcile stock levels of products
- Identifying shrinkage in inventory
- Determining which products are the most profitable (through analysis)
- Helping identify reorder point for products
- Helping customers save time by enabling them to find products quickly