SKU proliferation and why you should stay organized 

The Stock Keeping Unit (SKU) is a code that helps to control inventory in a warehouse. It is a unique reference number that registers the product on the company's software that it is using.

It is composed of letters and numbers based on the product's characteristics. This code allows the recognition of the article at each scan. The product can then be followed throughout its journey in the warehouse, thanks to the WMS software, which will remember : 

• The location of the product, 
• Its characteristics, 
• Its position within the supply chain. 

SKU code is not to be confused with the EAN code, it has a variable length and does not follow any rules: the company chooses how to compose it depending on the product, unlike the EAN code which may have to comply with certain regulations. Also, it is used internally for recognition in the warehouse and is composed of real characteristics on the product rather than random numbers. 

Dangers of such a huge proliferation  

Because companies have more and more SKUs to add to their catalog, the number of SKUs in the warehouse is constantly increasing. Behind this increase there are several factors like the rise in demand, the company's desire to meet all of the customer's wishes, and the fact that they want to follow trends. 

It is obvious that the increase in the number of SKUs in the company is correlated with its growth. It meets the customer's expectations and strengthens its competitiveness. The SKU problem can arise when it becomes too complicated to manage so many codes, when the company can no longer keep up with the entry of new products into its business, or conversely, when it is unable to release them due to poorly performing SKUs. 

Dangers that SKU proliferation can bring :  

• Decreased customer satisfaction,
• Decreased efficiency in the warehouse,
• Increased storage costs, 
• Complex inventory management, 
• Difficult order management as orders are more and more customized, 
• Etc.

It is therefore advisable to use warehouse management system to gather and classify information. An efficient WMS can be used to control the flow of incoming SKUs by tracking their movement through the supply chain for accurate product counts.