Description: SKU, or Stock Keeping Unit, is a unique identifier assigned to each product or service that can be purchased. This alphanumeric code allows businesses to manage their inventory efficiently, facilitating the identification and tracking of products throughout their lifecycle. SKUs are fundamental in various inventory management systems, where each product may have unique characteristics that require detailed tracking. A SKU can include information about the type of product, its size, color, and other variants, helping retailers organize their inventory and customers find what they are looking for more easily. Additionally, the use of SKUs allows businesses to perform more accurate sales and product performance analysis, thus optimizing inventory management and improving strategic decision-making.
History: The concept of SKU began to gain popularity in the 1960s with the rise of retail and the need for more efficient inventory management. As businesses started using point-of-sale (POS) systems and barcode scanning technologies, the implementation of SKUs became essential for product tracking. With the advancement of technology and the digitization of commerce, the use of SKUs has expanded to various e-commerce platforms and inventory management systems, where they are used to manage complex product catalogs.
Uses: SKUs are primarily used in inventory management to accurately identify and track products. They allow businesses to monitor stock levels, manage orders, and optimize product replenishment. Additionally, SKUs are useful for sales analysis, as they facilitate the identification of best-selling products and those that are underperforming. In various inventory systems, SKUs are essential for organizing product catalogs and enhancing customer experience.
Examples: A practical example of a SKU would be a pair of sports shoes with a SKU like ‘Shoe-1234-RD-10’, where ‘Shoe’ indicates it is a shoe, ‘1234’ is the model number, ‘RD’ indicates it is red, and ’10’ is the size. This code allows retailers to quickly identify the product and its specific characteristics. Another example could be a book with a SKU like ‘Book-5678-FIC’, where ‘Book’ indicates it is a book, ‘5678’ is the book’s identification number, and ‘FIC’ indicates it is a work of fiction.
