by Sam Balagtas
2 years ago

How to Create Effective Stock Keeping Units (SKUs)

2 years ago   •   3 min read   •   Inventory Management

 If you have ever been tasked with creating SKU-based inventory management systems for your business, you have probably wondered how to create effective stock keeping units as well.

What are Stock Keeping Units (SKUs)?

The number of variants in a particular product line can sometimes get out of hand, even with your best efforts. SKUs alongside the right equipment, whether an RFID scanner or barcode scanner, will help speed up the process in specific areas of your operations.

These are unique codes composed of letters and numbers assigned to your products, which can help you identify their attributes like color, size, material, manufacturer, etc.

It plays a significant role in good inventory management, storage process, and accurate order picking, as it contains invaluable information regarding your inventory and its movement.

Now that we’ve defined what they are and their importance, let’s dive into how to create them.

1. Short and Simple

First, stick with a simple approach and avoid creating lengthy SKUs to ensure they are easy to understand and memorize.

Assign codes for each attribute and combine them. Up to 8-12 alphanumeric codes should do the trick. Then prepare a table with their legend that can help guide your employees. It will help your inventory management team effortlessly read them, and identify products faster.

2. No Confusing Characters

If you want your crew to identify your product SKUs accurately, avoid putting together letters and numbers that look alike (ex. the letter “O” and number “0”), unique characters, and spaces to prevent confusion.

Remember, the point of assigning these unique codes is to organize and help you order pick the right items. Avoiding such codes can help you stay away from delivering the wrong products.

3. Think about the Attribute Sequence

Now that you’ve thought about the codes of each variant, you would need to note them down (size, type, color, etc.) and arrange them based on their importance.

It would bring significance to your efficiency in specifying your products, especially when you’re in a rush. For example, a customer needs you to deliver 5 boxes of 1 liter-bottled strawberry juices for their supermarket now–and you’ll have to search a lot of boxes in your inventory.

It would help if your SKUs described your product in such a sequence: TYPE (juices), FLAVOR (strawberry), PACKAGING (bottled), SIZE (1 liter), as opposed to flavor (strawberry), size (1 liter), packaging (bottled), and type (yogurt drink). You could’ve been led to the wrong boxes and wasted your time.

4. What works for you?

When your suppliers have their SKUs, it doesn’t mean you can’t change them once you receive your stocks. Because having your own SKUs will help categorize your products inside your warehouse accordingly.

Also, keep in mind that when establishing SKUs you must consider their scalability and choose whether you want to use letters, numbers, or a combination of both. Just make sure it works for your business, even in the long run.

5. Group similar SKUs

In addition to the tips above, keep products with the same SKUs together and organized. Keeping them disorganized, however, will give you a hard time tracking your items, leading to potential losses and disruption of your operations.

We hope these tips will help you to create effective stock keeping units for your products. Remember, the success of a business is not measured only by its ability to produce goods but by its ability to keep its operations structured and systematic. Strong SKUs can help track and pinpoint your products down to their specific variant efficiently, especially in companies that carry a lot of variations for each product. And with the help of Zayls, can also help you determine the availability of each SKU from all your warehouses, generate reports on transactions, and keep all your products well-managed.

Photo by Phil Hearing via Unsplash.