Stock keeping unit (SKU): what it is and how to use it — Katana

What is a SKU number?

SKU number is a unique alphanumeric code used to identify every inventory item in the stockroom. SKUs need to be set up in a way so that anyone in your manufacturing business can understand them.

Take a look at this example SKU in manufacturing:

TBL-M-WH

Do you know what it means?

How about this:

COA-14-BK

No?

Well, there is nothing to worry about because there’s no way you can know what this jumble of numbers and letters means. Yet. This seemingly random assortment of characters is an example of SKU codes that can be read by machines or workers.

SKU codes should help you identify the exact product variant you are looking for. Therefore, you should incorporate information such as color, type, size, and other similar attributes into the SKU.

This saves you time decoding the SKU during everyday operations. For example, if your product list includes a pink sleeveless shirt for women, then the following would be a good SKU example code:

This is a relatively simplistic code, but you can make your SKUs more complex. For example, if you have products that move between locations, then maybe having area codes of the original location is necessary.

Reading these codes might seem like a lot of effort at the beginning. But the reality is that they will be used daily, so eventually, reading them will become second nature.

When setting up your SKUs, remember that this is ultimately to make communication easier and help grow your business, taking into account what is important for your business so that you can tailor the SKUs to what you want.