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"I have been consistently impressed by their ability to handle our complex needs and willingness to say yes to any challenge. Most importantly, I believe in the character and work ethic of the team."
Mike, Co-Founder & CEO
If running your business involves managing inventory, you need to have an organized system in place to keep track of each item in stock. One of the key components of an organized inventory management system is SKU tracking. If you manage large product lines stored across multiple warehouses, understanding how to use SKUs effectively will help you keep your fulfillment operations running smoothly. In this article, we will explain what SKU tracking is, why it matters, and how it can impact your business’s performance.
A Stock Keeping Unit (SKU) is a unique identifier assigned to each distinct product in your inventory. SKU tracking means using these identifiers to monitor the movement of products across your supply chain. This includes everything from receiving and storing inventory to fulfilling orders and restocking returned items. By tracking SKUs, you gain visibility into what products you have, where they are, and how they’re performing.
SKU tracking gives you a deeper understanding of how your inventory behaves and can help you make decisions that reduce waste and increase profitability. Let’s take a closer look at why this process plays such an essential role in successful business operations:
SKU tracking enables you to know exactly what’s in your warehouse at any given time. Instead of guessing or relying on manual counts, you can easily access real-time data to make wise inventory management decisions. This enhanced visibility can help you avoid overstocking and understocking, both of which are costly errors. With a well-organized SKU tracking system, order pickers will be able to locate products faster and keep your warehouse more efficient.
When your inventory is well-managed, your customers benefit directly. SKU tracking ensures that the right products are available when a customer places an order. You can reduce order delays, avoid stockouts, and prevent errors with SKU tracking. The result is a smoother buying experience that builds trust and encourages repeat purchases.
SKU tracking gives you access to valuable data about product performance. You will be able to see which items sell quickly, which ones sit on the shelf, and how demand changes over time. This information can help you make smarter decisions about what to restock, discontinue, or promote.
With an organized SKU tracking system in place, your team can pick and pack orders with confidence. Each product is clearly labeled and easy to identify. This lowers the chances of errors and returns, saving you time and money.
Overstocking ties up your capital and requires more storage space, while understocking can lead to missed sales. SKU tracking helps you strike the right balance by giving you insight into what’s needed in your inventory. The better your inventory management is, the more you will save in the long run.
Here are several practical ways to make your SKU tracking more efficient:
Start by creating a logical SKU naming convention. Your SKU codes should be easy to understand at a glance. Include identifiers like product category, color, and size so your team can quickly recognize what the item is.
Automating your SKU tracking through inventory management software saves you hours of manual work. These tools can update stock levels in real time, send alerts when stock runs low, and generate detailed reports. Automation reduces errors and keeps your data consistent across all platforms.
Make sure your SKU tracking system integrates with your sales channels, warehouse management tools, and shipping carriers. When everything works together, you get full visibility of your inventory. This makes it easier to manage stock across multiple locations.
No system is perfect, which is why periodic audits are critical. Set aside time to check your physical inventory against your digital records. This can help you catch discrepancies early on and avoid bigger problems down the road.
A strategic warehouse layout goes hand-in-hand with efficient SKU tracking. Group similar items together, label storage areas clearly, and keep popular products in easy-to-reach spots. An efficient storage strategy can reduce picking times and increase overall efficiency.
Like any business process, SKU tracking comes with its own set of challenges. Let’s take a look at some common issues businesses face when implementing SKU tracking and learn how to overcome them.
With hundreds or even thousands of SKUs, finding a specific product in your database can prove challenging. The solution lies in implementing logical filters that facilitate search. You can do this by categorizing products based on their physical attributes and functions.
Manual data entry is prone to mistakes. Automation and barcode scanning reduce the risk of inaccurate tracking. Training your team and maintaining standard operating procedures also helps keep your records accurate.
The software you use to manage sales may not be compatible with your SKU tracking system. For this reason, it’s important to choose systems that are built for integration. Many platforms also offer APIs that can connect to your SKU tracking system.
Duplicate SKUs can cause a great deal of confusion. To prevent this from happening, review your SKU list regularly and merge or update any duplicates you find.
If you are in need of a partner to help you optimize SKU tracking and streamline your inventory management, Encore Fulfillment is here to help. We offer reliable logistics solutions to businesses of all sizes across multiple industries. Speak with a member of our team today to learn how we can help you manage your inventory for faster order fulfillment.
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