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SKUs are unique numbers used to identify items in a company’s inventory, allowing for effective management through computerized systems. They can be assigned to physical items and intangible entities like warranties, and are typically printed in barcode format. SKUs can also be embedded in RFID tags for automatic scanning and inventory updates.
A stocking unit (SKU) is a unique number used to identify a billable item in a company’s inventory. Using these numbers, businesses can track the quantities they have in inventory and can manage inventory effectively with the use of computerized systems, rather than having to track everything by hand. SKUs are usually unique to the companies they are used in, which means that an identical product can have different numbers if it is maintained and sold by different companies.
A business can assign a SKU number to a physical item, such as a box of dishes for sale. These numbers can also be used to identify services and more intangible entities, such as warranties, creating a system that can be used for tracking and billing. In the case of something like a warranty, using SKUs allows a business to keep track of how many warranties are being sold in various locations and how many warranty contracts it has in place for its products in total.
When a storage unit is assigned, the number reflects the smallest possible unit a store stores. In a warehouse, this is typically a box that contains multiples of the same item, whereas individual stores would assign a number to each individual item. This can be confusing for consumers because boxes and individual items will often have the name number assigned. While the difference between a box of something and a single item is usually apparent in the store, it can be more complicated when ordering products online or over the phone.
In some cases, a SKU includes part of the product number or manufacturer-assigned Universal Product Number (UPC), but this is not always the case. In the case of items that are available in several styles, the first part of the number identifies the item, such as 1234 for a pair of trousers, and the second part indicates the style, such as B12 for ‘black, size 12’. SKUs are typically printed in barcode format on product labels so they can be read by a barcode reader, making it easier to track and manage inventory.
A SKU can also be embedded in an RFID tag, so inventory updates can be made when a product passes an RFID reader. This can be extremely useful when products are moved in large volumes, as there will be no need to scan individual products and boxes by hand, as the RFID system scans automatically. These systems can also be used to help people locate products in a warehouse, with employees using handheld readers to locate specific tags.
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