Stock Keeping Unit (SKU)
A Stock Keeping Unit (SKU) is a unique identifier used to track and manage individual products or product variants in inventory.
Definition and Purpose
An SKU is a unique alphanumeric code assigned to each product or product variant in a business’s inventory. SKUs help businesses track inventory, manage stock levels, and identify products quickly. Unlike barcodes, SKUs are typically created by the business and can include information such as product type, size, color, or location.
Importance in Inventory Management
SKUs are critical for efficient inventory management, enabling businesses to monitor stock levels, reorder products before they run out, and analyze sales patterns. Accurate SKU management helps prevent stockouts, reduce excess inventory, and improve overall supply chain efficiency.
Best Practices for SKU Creation
When creating SKUs, businesses should develop a consistent and logical naming convention that reflects important product attributes and is easy to understand. SKUs should be unique to avoid confusion and long enough to convey necessary information without being overly complex. Regularly reviewing and updating SKUs ensures they remain relevant as product lines evolve.