What does "stock keeping unit" (SKU) relate to in inventory management?

The term "stock keeping unit" (SKU) is crucial in inventory management as it serves as a unique identifier for distinct products within a company's inventory. Each SKU helps businesses track specific items, allowing them to manage inventory levels, sales, and reordering processes effectively. By assigning a unique SKU to each product variant, including size, color, or style, companies can easily monitor and analyze sales data, aid in forecasting demand, and streamline order fulfillment.

The correct association of SKUs with unique product identification facilitates better organization and efficiency in managing inventories. This identification system allows for quick retrieval and tracking of items, which is essential for maintaining accurate stock counts and improving overall supply chain management. It enhances inventory accuracy and reduces the likelihood of errors in stock management and reporting.

Understanding the role of SKUs is fundamental for professionals in supply chain management, as it is an integral part of effective inventory control strategies.