What is SKU?

Complete guide (I)
SKU codes are everywhere: embedded into sales and inventory management platforms, and broken down line by line in all kinds of inventory reports.

What is SKU?

SKU or Stock Keeping Unit, although an acronym, you'll often hear it as if it were a word, pronounced "skew."

A SKU is a unique code assigned to an individual product. SKUs are the basic component of inventory management. They help inventory managers determine stock levels, turnover, profitability, etc.

Is SKU the same as UPC?

While some people use SKU and UPC interchangeably, they are quite different and have different functions.

SKUs are assigned to individual products so that inventory management can more easily track their stock in the management software.

A SKU is generated internally within a company. If two companies had the same product, those products would have two different SKUs.

A UPC or Universal Product Code (Universal Product Code) is a constant, no matter what company buys or sells the product. It is the well-known Barcode, the machine-readable version of the UPC.

UPCs are 12-digit numbers managed by the global GS1 organization and remain with the product for its entire useful life no matter where in the world it is bought or sold.

Thus, a product will have a UPC, but could have any SKU number.

What are SKU codes used for?

SKU codes are used for product identification and tracking. They are an absolute must-have in any warehouse, manufacturing, or retail environment because they simplify inventory management and analysis by ensuring that your entire team speaks a common language. There can be no confusion about which brand, model, or specification of a product a customer ordered, because there is only one code for each permutation.

SKU Examples

SKUs are alphanumeric codes, that is, they use both numbers and letters. They are designed to be human-readable at a glance (unlike a UPC) and offer important information. For example:

  • Green pants size 38 Scout model: PANT-SCO-38-VER
  • A 500 gram jar of hazelnut cream: BOT-500-AVELL

In summary

Can two products have the same SKU code? If two products are different in any way, then no. They must have different SKU codes.

SKUs represent accuracy, consistency, and simplicity: three vital components of effective inventory management.

By using SKU codes, you can produce more accurate reports on sales and inventory data, make profitability decisions, and better serve customers.

Soon we will expand the information with:
- Uses of SKU codes
​- What is SKU rationalization?
- How is a SKU generated?

- SKU in inventory management software
- Other useful SKU metrics
Is logistics the same as supply chain management?
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