The Power of SKUs: How to Make Inventory Management Work for You

Posted on Oct 23 2017 - 6:38pm by Expert-Zine

Grocery store owner doing an early morning inventory using his tabletOne of the most effective ways to optimize your inventory management efforts is to organize your products. You could do this by creating an alphanumeric SKU or stock keeping unit system. But what is an SKU system and how do you make it?

What Exactly is an SKU?

SKUs are basically codes for your products that your team could use for identifying and searching on-hand stocks from order forms, invoices, or lists. They’re a vital component of proper inventory management because you’ll be able to easily monitor your inventory in the most detailed way possible, right down to individual products specs such as size and color among others. They’re likewise specific and unique to different locations such that you won’t have to worry about stocking two of your warehouses with identical products because of their SKUs.

How Do You Set Up an SKU System?

First off, make your SKUs as simple as possible. Let’s say you sell clothing. Opt for letters and numbers to denote colors, sizes, seasons, and types. For example, let’s say you’re assigning an SKU for a medium size black dress for spring 2017; you could go with “SPR17DrMBlk”. When creating SKUs, arrange the characteristics in order of importance.

For example, by starting with the season and year, it’ll be easier for you to limit your searches to the proper collection, and then follow it up by broader characteristics such as the type of product, size, and color, suggests ReverseLogix, a top logistics provider.

In addition, do not use symbols, accents, spaces, or letters that could be mistaken for numbers to avoid confusion. For instance, refrain from using the letter O since it looks like the number 0.

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Wrapping It Up

By creating an SKU system, your team would have better control of your inventory and could effortlessly find the exact specific product they’re looking for, including where it is, whether it’s in warehouse number 1 or warehouse number 2. Also, when you employ an efficient SKU system, you could further optimize your inventory management because you’ll be able to calculate order quantities and individual reorders for each SKU.