What is the SKU Code in Logistics?

In the field of logistics, the precise and efficient identification of products is essential to ensure a proper inventory flow and optimize operations. This is where the SKU (Stock Keeping Unit) code comes into play, an essential tool for inventory management. This article breaks down what an SKU is, its purpose, characteristics, how to create them, their benefits, and the differences from other product identification codes like UPC and EAN.

What is an SKU?

An SKU, acronym for Stock Keeping Unit, is a unique code assigned to each product in an inventory to facilitate its identification and tracking.

This code is typically alphanumeric and is created by the seller or the company’s inventory management system. Unlike other standard codes like UPC or EAN, the SKU does not follow a specific global standard, providing greater flexibility to adapt to the specific needs of each business.

What is the SKU Code Used For?

The SKU code is primarily used for internal inventory management. It allows companies to track each item in detail, quickly identify specific products, and efficiently manage replenishment.

Additionally, it facilitates sales analysis, stock control, order planning, and warehouse organization. With a well-implemented SKU code system, operational efficiency is improved, and errors in inventory handling are reduced.

Characteristics of SKU Codes

SKU codes have certain characteristics that make them ideal for inventory management:

• Uniqueness: Each SKU is unique within the company’s inventory system.
• Alphanumeric: SKUs can contain both letters and numbers, allowing greater flexibility in their design.
• Significant: SKUs often include relevant information about the product, such as its category, model, size, or color.
• Variable length: There is no fixed length for SKUs, although it is recommended they be short enough to be manageable but long enough to contain all necessary information.

How to Create SKU Codes

Creating effective SKU codes requires a systematic approach. Here are some key steps to develop an efficient SKU system:

• Define a structure: Decide how you will organize the information within the SKU. For example, you could start with a letter for the product category, followed by numbers indicating the model and color.
• Maintain consistency: Ensure all SKUs follow the same format to avoid confusion.
• Avoid ambiguities: Use clear characters and avoid those that can be easily confused, like ‘0’ and ‘O’ or ‘1’ and ‘I’.
• Document the system: Create a document that explains the logic behind the SKUs and ensure all relevant employees understand it.

Benefits of Using SKU Codes

Implementing SKU codes in inventory management offers multiple benefits:

• Improves inventory accuracy: Reduces human errors in tracking and accounting for products.
• Optimizes stock control: Facilitates the identification of products and management of inventory levels.
• Speeds up replenishment process: Allows for more efficient and faster replenishment of out-of-stock products.
• Facilitates sales analysis: Provides detailed data on the performance of each item, aiding decision-making.
• Improves warehouse organization: Helps organize storage space more effectively.

Differences Between SKU, UPC, and EAN

SKU, UPC (Universal Product Code), and EAN (European Article Number) codes are essential for product identification, but they differ in several important aspects. Below is a comparative table detailing these differences:

The use of SKU codes in logistics offers a practical and efficient solution for inventory management. Their ability to provide a unique and detailed identification of each product significantly improves accuracy and organization within the warehouse. Additionally, SKUs facilitate stock replenishment, sales analysis, and space optimization in storage. Although they differ from other standard codes like UPC and EAN, SKUs are an indispensable tool for any company seeking to maintain rigorous and efficient inventory control.