Smart Warehousing Resource Library

How to Create SKU Numbers

Written by Smart Warehousing | Mar 30, 2023 3:22:12 PM

When your company opened its doors, you probably followed a relatively straightforward process for getting your products to your customers on time. Yet, if you’re like most companies, one day you realized that the old ways of doing things couldn’t sustain your growth. 

Scaling and expansion of your business calls for scaling and expansion of your processes and systems. After all, managing your supply chain requires several moving parts, from product replenishment and customer fulfillment to navigating shipments and returns. You need a better way to stay efficient and organized as you reach more customers.

Is your company wrestling with keeping track of your inventory and managing your supply chain smoothly while your business scales? Thankfully, a tried-and-tested solution can lay a good foundation as you continue to grow: creating SKU numbers. Let’s explore what SKU numbers are, how to create SKU numbers, and how they can help as your company expands.

 

What’s a SKU Number?

You may be thinking, what is a SKU number? First, let’s talk about what a SKU number is not. SKU numbers are sometimes confused with the UPC barcode you’ll find on products in retail stores. In contrast to UPC codes, SKU stands for a stock keeping unit, or SKU number as it’s commonly called. This is a unique combination of letters and numbers attributed to a specific product in your inventory. Creating a SKU number for each product allows you and your team to identify, track, and differentiate items in your inventory smoothly. 

Unlike UPCs, your team creates SKU numbers internally, so these are not universal. This means your competitor might create a SKU number that is different from yours, even though it’s for the same product. Typically, a specific SKU number will combine different descriptors for the associated product, such as model, supplier, color, or size: whatever you deem as essential to identify. 

 

Benefits of Creating SKU Numbers

Debating whether to create SKU numbers for your inventory management system? SKUs can bring vital benefits to help your business operate with greater efficiency.

Creating SKU numbers can improve your warehouse processing efficiency and accuracy. When you categorize your products via SKUs, for example, it’s easy to locate and track specific products when orders arise. You’re also able to confidently know what products you have on hand and can make adjustments for items low in stock, which helps with your strategic planning and inventory systems.

In addition, SKUs are the industry standard for retail and ecommerce businesses. They help legitimize your operations and allow important product information to be communicated quickly and consistently, keeping your team on the same page.

 

Follow These Steps to Create Your Own SKU numbers

Since creating SKU numbers is an internal process, each organization may approach things slightly differently. With that said, here are some general steps and best practices to follow to create your SKU numbers and incorporate them into your operations:

 

Create a Coding System for Your Identifiers

SKUs involve abbreviating specific attributes associated with your products, so you first need to decide what attributes you want to identify in your SKUs. These could be the product name, model, manufacturing year, color, size/shape, or whatever you choose. Once you have these in mind, create assigned codes or abbreviations for each identifier, which will help streamline your team’s ability to interpret each SKU. 

 

Set up a Standard Order for Your Identifiers

Once you have codes assigned to the attributes you want to identify, determine a standard order you want to follow for creating each SKU number and apply it to every product. For example, this order could be supplier, department, product name, part number, size, color. 

With your coding system and order applied, your SKU number could look something like this:

PTL-SH-RS-03-M-BL

 

Keep the coding and order consistent for all your SKUs, and make sure not to duplicate numbers. Each product must have a unique SKU in order to properly track your inventory. 

 

Add your SKUs to Your Inventory Management System

As you grow and continue adding new products into your inventory, uploading your created SKU numbers into your inventory management system is key. You don’t want to waste your team members’ valuable time tracking all your SKUs manually. With your SKUs added, your team will be able to quickly determine which products are selling (and which are not!) and easily see inventory quantities.

 

Create SKU Number Barcodes

Lastly, you want to create barcodes for each SKU you’ve added to your inventory management system. Once created, add the SKU barcode to the accompanying product label. As barcodes are scanned when products are ordered, you can easily track your product levels in real-time.

 

Navigate your inventory and logistics with a 3PL

Creating SKU Numbers is a great place to start in inventory management, but this is only one part of the process of meeting your customer demands. At Smart Warehousing, we can help with all your supply chain needs as a 3PL, from order fulfillment and logistics to product packaging and replenishment. Contact us today to get the peace of mind and confidence you need to grow your business.