Stock Keeping Unit (SKU)

An SKU is a number or string of alpha and numeric character  that uniquely identify a product. For this reason, SKUs are often called as part numbers, product numbers  and product identifiers.
SKU allow inventory to be tracked  from point of distribution to point of sale. SKU is a type of data management system.  All SKU tracking varies from business to business and according to regions and corporate data systems. SKU also varies from other product tracking systems due to manufacturer regulations or even government regulations. Other examples of tracking methods are Universal Product Code (UPC), European Article Number (EAN), and Global Trade Item Number (GTIN).

SKU’s are typically printed as a barcode on a label somewhere on the product. This makes it easy and quick to find the products information by scanning it with a bar code reader.
The first part of a SKU may contain the code for that type of product while the second part of the code may represent the color or style.

Since the SKU represents the number of units in the item, you should read carefully to make sure you are ordering the desired quantity. In some cases, a quantity of 1 may mean one box full of a dozen separate products. The problem arises when you only need one product, not a dozen.

SKU can also be used to determine how many time the product flow  at each separate location or where the inventory is stored . SKU can be used to track products through the supply chain as well as to use for inspecting sales data.

Some SKU’s come embedded with an RFID tag. Updates or changes can be made to the item by using an RFID reader. High volume stock can be processed quickly this way because you don’t need to manually scan each individual item by hand. RFID system scans are done automatically. Since RFID scanners act similar to GPS trackers, you can use them to find products that might have been misplaced in large
warehouses.

Another benefit of using SKU is with seasonal products that need to be updated every year. Some SKU’s contain the year somewhere in the code. If product from the following year is going to be used in a new year, then the year in the code can be changed. This is useful for products that do not change from year to year.

When it comes to warehouse storage and distribution, assigning SKU codes to all the items in stock can be a monumental feat. Luckily for distributors, there have been advances in computer software and systems that make the task of giving a product an SKU much easier. This new technology has made the task easier and more convenient, not to mention more accurate because it is free from human error.