SKU is an abbreviation for Stock Keeping Unit which functions as a unique code to specifically identify each product in your store. Labamu is the best stock application that is highly recommended to help MSMEs manage thousands of product codes automatically and neatly. Using the right numbering system will make it easier for you to track inventory and speed up the daily transaction process at the cashier’s desk.
Before moving on to the technical guide, understand the following important facts about product identity management in business operations:
- Businesses that use SKUs consistently can reduce shipping errors by up to forty percent compared to traditional manual systems.
- The implementation of the Stock Keeping Unit helped online shop owners significantly save up to five hours of stock taking time per week this year.
- Neat inventory management has been proven to be able to increase supply chain efficiency and maintain the availability of popular product variants in the eyes of loyal customers.
To support item data accuracy, you can take advantage of the Order Management feature which is integrated with direct stock reports. The use of appropriate digital tools ensures that every mutation of goods is recorded neatly so that no stock is missed or lost without a trace. You can monitor thousands of unique codes just via your smartphone screen with the help of an intuitive POS Cashier system.
Main Functions of SKUs in Inventory Management
Applying a unique code to each item makes it easier for warehouse staff to differentiate product variants that have very high physical similarities. You can see the sales performance of each item in detail to determine stock procurement strategies for the next operational period. The following are some important uses of implementing this unique code for your business growth:
- Speed up the process of searching for goods on warehouse storage shelves based on product categories that have been previously determined by the operational team.
- Makes it easy to track remaining available stock in real time to avoid running out of goods when customer demand is increasing sharply.
- Avoid data input errors during transactions at the cashier’s desk because each unique code only refers to one particular type of product variant.
- Helps analyze which products sell best on the market through detailed sales reports based on identity data for each item.
- Simplifies the monthly financial reporting process for business owners because all merchandise asset values have been recorded very neatly and accurately.
Automation through this unique code will be very helpful if you plan to expand your business by opening many new branches in different locations. You no longer need to memorize thousands of product names because the system will recognize each item only through a short series of alphanumeric characters. Make sure each staff understands the logic behind determining the code so that work coordination in the warehouse becomes more harmonious and productive.
Characteristics of a Good Stock Keeping Unit
Each unique code must be designed to be easily read by humans without the need to use special scanning devices as with regular barcode systems. You should arrange a combination of letters and numbers that reflects the product’s identity, from the brand to the sizes or colors available. The following are the main characteristics that must be present in your company’s current identification numbering system for goods:
- Consists of a combination of alphanumeric characters which is unique for each variation of goods without any duplicate codes in the system.
- Have consistent character lengths for all product types to look professional when printed on price tags or sales receipts.
- Use abbreviations that are logical and easy for field staff to remember to minimize communication errors during the process of picking up goods at the warehouse.
- Includes specific information regarding product variants being sold, such as color and size, to quickly differentiate one item from another.
Consistent characteristics will make it easier for you to search for data on the computer system when carrying out sudden stock audits in stores. Avoid using confusing characters such as the number zero which is similar to the letter O to maintain accurate reading of the code by the human eye. Focus on simplicity of format so that anyone working in your shop can immediately understand the meaning of the unique item code.
How to Create Effective Product SKUs
The first step is to determine the main category of goods and then assign an abbreviation code that represents the product group in a clear and structured manner. You should make sure that the character order starts from the most general information down to the most specific variant details on the back. The following is a format template that you can use to create a very professional item identification numbering system:
SKU Code Template:
[BRAND]-[CATEGORY]-[COLOR]-[SIZE]Use separators such as hyphens to improve code readability so staff don’t get confused when looking at thousands of item listings in the daily checkout system. An example is LBM-TSHIRT-RED-XL which automatically notifies your team that the item is a red Labamu brand t-shirt in size XL. Consistency in applying this format is the main key so that your inventory management runs smoothly without any significant technical obstacles.
Differences between Barcodes vs SKUs for MSMEs
Barcode is a universal code issued by the manufacturer, while the Stock Keeping Unit is internal and freely determined by your shop owner. You still need both if you want to run a professional inventory management system and have a very high level of data accuracy. Barcodes help in the quick scanning process at the checkout while internal unique codes help in organizing stock based on your own business tastes.
The internal unique code system allows you to add information that is not in the manufacturer’s barcode such as warehouse shelf location or specific distributor codes. This provides high flexibility for you to organize the warehouse according to the area and types of goods that come in and out most often. Make sure your digital system is able to accommodate these two types of codes so that the item identification process becomes more layered and safe from the risk of errors.
Example of Numbering Store Product Variants
Let’s look at real applications in several types of businesses so that you have a clearer picture in compiling product codes in stores. Smart numbering will help you group similar products so that the process of analyzing best-selling items becomes much easier later. Here are some format inspirations that you can adapt for various popular business categories today:
- Clothing Business: BJU-PRIA-HTM-L (Men’s Black Shirt size L) to make it easier for staff to find the right size for your loyal customers.
- Food Business: SNK-KRIPIK-PEDAS-S (Small Size Spicy Flavored Snack Chips) to differentiate the packaged portions available in your shop window now.
- Electronic Business: HP-SMSG-S24-256 (Samsung S24 Cellphone with 256GB Memory) to ensure there are no errors in picking up units of this high value luxury item.
Through the example above, you can see that each character provides important information that can be immediately understood without needing to open a special guidebook. Apply the same logic to your entire collection of goods so that the warehouse system becomes more organized and efficient in serving customers. Immediately start making a list of your item identities now to build a stronger business foundation and be ready for big growth.
Start the Digital Transformation of Your Business Now by switching to a more modern and automatically integrated recording system every day. Disciplined implementation of a unique code is a smart first step to protect your valuable assets from the risk of loss due to messy management. Use the digital ecosystem to simplify daily operations so you can focus on broader and more profitable market expansion strategies.
For those of you who manage a clothing business, the product variant management feature will help you manage thousands of color and size combinations easily. Immediately optimize the warehouse system in your pharmacy business to ensure that each medicine is recorded with a unique code to simplify the routine stock taking process. With the help of technology from Labamu, you can increase team work efficiency and ensure that every item in your shop is always under safe supervision.
