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

The code affixed to the Stock Keeping Unit enables the combination of numbers and letters (see example), in addition to clear assignment, the possibility of clear inventory management and thus inventory monitoring on the part of the manufacturer in the warehouse or directly at the point of sale.

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

Example of a stock keeping unit

A sweater has the title “adidas Classic Trefoil Sweatshirt” and is only produced in size S and in the color red. The manufacturer can assign the SKU code 4711-S-R to this item. 4711 describes the unique title, S the clothing size and R the color red. However, 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 listed separately on a label.

Slow- and fast-moving items, guarantee and minimum shelf life

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

In most cases, the so-called rotation of goods is used as a measurable key figure for the optimum stock position. The rotation of goods is also used to record the sales speed of a product. For example, if an SKU is considered a fast-moving item, it is placed prominently at the picking locations. 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 values. These include values such as the guarantee and the minimum shelf life. The same applies to all conceivable SKU options: The manufacturer determines the respective SKU.

Further information on this topic can also be found under ABC analysis.

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