SKU codes are everywhere: integrated into inventory and sales management platforms, and broken down line by line in all types of inventory reports.
What is SKU?
SKU or Stock Keeping Unit, Although it is an acronym, you will 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 the levels of existence, rotation, 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 stocks 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 SKU codes.
A UPC or Universal Product Code is constant, no matter which 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 organization GS1 and remain with the product throughout its useful life no matter where in the world it is bought or sold.
Therefore, a product will have a UPC, but it could have any SKU number.
What are SKU codes used for?
SKU codes are used for product identification and tracking. They are absolutely essential in any warehouse, manufacturing or retail environment because they simplify inventory management and analysis by ensuring that all your equipment speaks a common language. There can be no confusion about what make, 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 legible by people at a glance (unlike a UPC) and offer important information. For example:
A green pants size 38 Scout model: PANT-SCO-38-VER
A 500 gram bottle of hazelnut cream: BOT-500-AVELL
In summary
Can two products have the same SKU code? If two products are different in some way, then no. They must have different SKU codes.
SKUs represent precision, 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 provide better service to customers.
Soon we will expand the information with:
Uses of SKU codes
What is SKU rationalisation?
How do you generate a SKU?
SKU in the inventory management software
Other useful SKU metrics