The acronym SKU, Stock Keeping Unit, describes a clearly identifiable storage unit. A storage unit comprises all identical articles of a particular product variant. For identification purposes, a code is applied to the respective SKU, which clearly defines the stock-keeping product by means of a combination of numbers and, if necessary, additional letters.

The code, consisting of numbers and letters (see example), affixed to the Stock Keeping Unit, enables a clear assignment. In addition, it also opens up the possibility of clear stock management. The stock on the manufacturer’s side in the warehouse or directly at the point of sale can thus be monitored.

In the simplest case, a Stock Keeping Unit is assigned a code that consists of only a basic article number. This is the case, for example, if there are no additional variants of the product. However, a stockkeeping unit can exist in different variations. For example, a sweater may be available in several shades of colour or in different sizes. In this case, the SKU helps to find exactly the desired variant of the desired article.

Example of a Stock Keeping Unit

One sweater is entitled “adidas Classic Trefoil Sweatshirt” and is only produced in size S and in the colour red. The manufacturer can assign this item the SKU code 4711-S-R, for example. 4711 describes the unique title, S the size and R the colour red. If the same article is available in different sizes, the SKU code must also vary: 4711-M-R, 4711-L-R, 4711-XL-R. The code itself is usually implemented in the GTIN or EAN code. However, it can also be carried separately on a label.

Slow- and fast-moving items, warranty and the minimum durability

In times of mass production, as mentioned above, there are usually several variants of a product. It differs in size, colour or preparation (packaging, material, additional features).

In most cases, the so-called goods rotation is used as a measurable key figure for the optimal storage position. In addition, the sales speed of a product is recorded via the rotation of goods. For example, if an SKU is considered a fast-moving item, it is placed prominently at the picking stations. Slow-moving items, on the other hand, can be stored less prominently – the picking density increases or decreases accordingly.

Important: SKUs can also be related to intangible assets. These include values such as warranty and minimum durability. In addition, all conceivable SKU possibilities apply; the manufacturer determines the respective SKU.

You can find more information on this topic under ABC Analysis.

Image rights: License – CC BY-NC-ND 2.0, author – Pere Tubert Juhé

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