Learn Functions, How to Make, Time, and the Importance of a Stock Keeping Unit!

Posted on

Stock-Keeping-Unit

Stock Keeping Unit (SKU) is a unique code used to identify and track items in inventory. SKUs are frequently used in the retail, logistics, and e-commerce industries to manage inventory and monitor products.

Each SKU usually consists of a combination of numbers, letters or symbols specific to each product. SKU can include information such as brand, model, color, size, variant, and other attributes that differentiate one product from another. By using SKU, the inventory management system can easily identify, search, and track available stock items.

By using the Stock Keeping Unit, companies can improve operational efficiency, reduce errors in inventory management, and increase customer satisfaction by ensuring the availability of the desired product. Check out this TransTRACK article for more!

What is the function of the Stock Keeping Unit?

The main functions of the SKU (Stock Keeping Unit) are as follows:

Stock Keeping Unit Function: Product Identification

SKUs are used to identify and differentiate each product in inventory. By using the unique code contained in the Stock Keeping Unit, companies can easily recognize and track each product individually.

Stock Keeping Unit Function: Inventory Management

SKUs allow companies to monitor and manage inventory more efficiently. By associating SKUs with the amount of stock available, companies can track product inventory in real-time and know when it’s time to replenish or order new products.

Stock Keeping Unit Function: Sales Monitoring

The Stock Keeping Unit helps in monitoring product sales. By associating each sales transaction with the relevant SKU, companies can obtain data on the number of products sold, time of sale, location of sale, and other information useful for sales analysis.

Stock Keeping Unit Function: Reporting and Analysis

SKUs allow companies to generate more detailed reports and analysis on sales performance, product trends and customer demand. By analyzing data related to SKUs, companies can identify the best selling products, manage the product lifecycle, and make informed decisions.

Stock Keeping Unit Function: Product Grouping and Mapping

SKUs can also be used to group products based on certain attributes such as brand, size, color, variant or storage location. In this way, companies can better organize product categories and organize inventory.

Through these functions, SKU helps companies manage inventory more effectively, improve inventory control, optimize sales, and make data-driven decisions.

How to create Stock Keeping Unit

How to create an SKU may vary depending on your company or organization’s preferences and needs. Here are some general steps you can follow to create an SKU:

Identify important attributes

Determine the relevant attributes to clearly identify the product. These attributes can include brand, model, size, color, variant, product type, or other attributes that differentiate one product from another.

Arrange Stock Keeping Unit format

Determine the format or pattern that will be used to form the SKU. For example, you can use a combination of numbers, letters or symbols that describe product attributes. Make sure the format is consistent and easy to understand.

Set the attribute order

Define the order of the attributes to be used in the SKU. For example, if make and model are the most important attributes, you might decide to put brand before SKU, followed by model.

Create a unique code

Based on the attributes you’ve identified, generate a unique code for each combination of attributes. Make sure each SKU is unique and no one is the same.

Use an inventory management system

Use an appropriate inventory management system or software to track and monitor products using the SKUs you have created. This system will help you manage inventory more efficiently and optimize SKU usage.

Test and revise

After creating the SKU, test your inventory management system and make sure the SKU is working properly. If necessary, make revisions or improvements to the format or SKU code.

Remember that it’s important to consider the needs and scale of your business when creating an SKU. Make sure the SKUs you create are easy to understand, consistent, and sufficient to efficiently identify and track products.

When is the ideal time to create Stock Keeping Unit

The ideal time to create SKUs depends on the stage of your business or company processes. The following are some of the ideal times to create SKUs:

When starting a new business

If you are planning or starting a new business, the ideal time to create an SKU is before you start operations. By thinking about SKUs from the start, you can build an efficient inventory management structure and system from the start.

When adding a new product

Anytime you add a new product to your inventory, it’s the perfect time to create SKUs. Make sure you create a unique SKU for the product so that it can be easily identified and tracked.

When updating the inventory management system

If you’re upgrading or migrating to a new inventory management system, that’s a great time to create SKUs. In the process, you can build a SKU structure that fits the needs and requirements of the new system.

Before scaling up operations

If you are planning to scale your business operations, such as expanding to a new branch or expanding your product range, this is the right time to consider and create an SKU. With well-organized SKUs, you can manage your business growth more efficiently.

When facing difficulties in inventory management

If you are having trouble managing your inventory efficiently, creating SKUs can help in better monitoring and management. You can review existing SKUs, make adjustments or improvements, and assign a new SKU that better suits your needs.

Basically, the ideal time to create SKUs is when you are starting a business, adding new products, or dealing with needs or changes in inventory management. By starting early and establishing a sound inventory management system, you can optimize operational efficiency and inventory control.

The importance of Stock Keeping Unit in warehousing

SKU has a very important role in warehousing. Here are some reasons why SKU is important in warehouse management:

clear identification

SKU allows clear and unique identification for each product in the warehouse. By using SKU, warehouse staff can easily identify and differentiate each item or product, minimizing possible errors and confusion.

Accurate inventory monitoring

By associating SKUs with each product in the warehouse, companies can track inventory accurately. SKU allows real-time monitoring of the quantity of goods in stock, updating stock, and ensuring that the stock available in the warehouse matches the inventory records.

Efficient order fulfillment

SKU makes it easy to manage and fulfill orders. With an SKU associated with each product, warehouse staff can quickly identify and retrieve the items that match customer orders. This reduces errors and speeds up the order fulfillment process.

Efficient organization and placement

By using SKU, goods in the warehouse can be placed and managed more efficiently. SKUs help in grouping products based on the same attribute or category, enabling optimal loading and placement in warehouses. This increases operational efficiency, speeds up the search for goods, and minimizes errors in placement.

Accurate reporting and analysis

SKU provides the data needed for accurate reporting and analysis related to inventory and warehouse operations. By using SKUs in an inventory management system, companies can generate reports on sales, inventory, goods turnover, and product trends. This information can be used for sound decision making and operational improvement.

Through the effective use of SKUs, companies can improve efficiency, accuracy and visibility in warehouse management. SKUs play a critical role in optimizing inventory monitoring, order fulfillment, warehouse organization, and reporting and analysis related to warehousing operations.

In running an efficient warehousing operation, it is important to utilize the right tools and services. One solution that can strengthen your inventory management is using the Logistic Service Integrator from TransTRACK.

Logistic Service Integrator is a platform that combines various logistics services into one integrated system. By utilizing the Logistic Service Integrator from TransTRACK, you can strengthen your SKU management and increase the efficiency of your warehouse operations. By having better visibility into inventory, coordinated order fulfillment and in-depth analysis, you can optimize SKU usage and take your logistics business to new heights.

Use the Logistic Service Integrator from TransTRACK and experience the benefits for managing your SKUs and increasing your warehouse efficiency.

Topic

logistic port