What is the Full Form of SKU?

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sku full form

The full form of SKU is Stock Keeping Unit. It is a unique identifier allocated to a product to track inventory and manage stock levels efficiently. SKUs are often alphanumeric codes or barcodes that help businesses keep track of individual items in their inventory. Furthermore, each product variant, color, size, or version typically has its own SKU to differentiate it from others. SKUs are necessary for inventory and retail management systems to simplify operations and boost the correct tracking of products.

Also Read: Material Management

How does SKU Work?

There are some standards as per the industry need to be followed:

  • Be Specific with SKUs: Each product or service needs to have its unique code (SKU) to avoid confusion. Every SKU should be unique further making it easier to track and manage inventory.
  • Keep SKUs Short and Simple: Long codes can be tricky to read, especially in inventory control, and may lead to mistakes. Short and simple SKUs are more efficient.
  • Avoid Spaces and Special Characters: When creating SKUs do not use spaces or special characters. These can be confusing and make it harder for people to work with the codes. Stick to alphanumeric codes. 
  • Prevent Confusion with Letters: Avoid using letters that can be easily mistaken for 0 and 1, such as O and I. This helps prevent errors and ensures accurate tracking of products.

Also Read: What is the Full Form of MTO?

What is the Significance of SKU?

The significance of SKUs is as follows:

  • Product Identification
  • Monitoring Inventory Levels
  • Managing Brand Stock Levels
  • Detecting Inventory Shrinkage
  • Analyzing Profitable Goods
  • Setting Reorder Points
  • Enhancing Consumer Efficiency

Also Read: BCom Finance

What is an Example of an SKU?

For example, a size 6 pair of white Onitsuka sneakers.

For this product, we can create an SKU like WHT-SIZE6-O456-ONITSUKA

Here is how you will interpret it:

  • WHT: Denotes the product color, which is White.
  • SIZE6: Represents the size of the product, which is 6.
  • O456: Refers to the model number assigned by the producer.
  • ONITSUKA: Indicates the brand of the product.

This SKU structure with dashes (-) is employed to distinctly convey specific details about the product thus making it easier to manage and track inventory. 

Also Read: MBA in Logistics Management 

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