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Inventory Management 101: 5 Best Practices in Managing Your SKUs

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5.1 Inventory Management

As a business owner, you know that having an efficient inventory management system will help streamline your operations. However, implementing one for your company is a challenging task. Because of the uniqueness of your brand, you need a system that caters to your products, as well as your consumers’ demands. Fortunately, you can get a head start in creating your inventory management process if your SKUs are in order.

An SKU (Stock Keeping Unit) is a code used to search and identify merchandise that is in stock. It helps business owners track their inventory, record their profits, and indicate when they need to replenish a certain product. Nevertheless, SKUs also need to be properly managed to keep the business flowing and prevent any delays.

To ensure that your SKU system runs efficiently, let these 5 best SKU management practices be your guide:

  1. Hire a Reliable 3PL Service

Hiring a 3PL service provides many benefits for your business. Since 3PL companies are updated with the latest order fulfillment procedures and technologies, they have the resources to make the stressful process of managing your inventory easy. They also utilize an effective warehouse picking process that allows them to find SKUs in record time. Plus, they offer real-time visibility, so their clients can easily view and track their inventory via web portals.

  • Create SKU Codes That are Easy to Understand

SKU codes with unconventional characters are difficult to search and decipher, so it’s best to keep things simple. Avoid starting each item with a 0 because some data storing software will interpret it as literally nothing. Using letters that can be confused with numbers (e.g. O, I, and L) should also be avoided. What’s more, it’s ideal to generate SKUs that are 4 to 8 characters long, so they won’t be mistaken for other numbers like the quantity of items you have in your inventory.

  • Keep an Eye on the Seasonality of Your Products

Being able to predict the increased demand for certain SKUs will give you more than enough time to replenish your inventory and fulfill your customers’ expectations. It’ll also help give your business a competitive edge during the offseason.

  • Arrange Your Wares According to  Their Popularity

Organizing your SKUs according to their popularity will make it easier to locate in-demand items. Placing top-selling merchandise near the shipping area will also enable your workers to pick, pack, and deliver them in a minimal amount of time.

  • Train Your Workers

Before you fully implement an inventory management process, you have to make sure your workers are aware of the changes. You’ll also need to train them on how to use the new system’s equipment, so they can track your products’ various SKUs without fail. Helping your employees understand the ins and outs of the inventory management system will give you a better chance of optimizing your business’s operations.

Managing your products’ SKUs is just one of the many responsibilities you have as a business owner. However, when it’s given enough attention and done properly, it’ll become a valuable asset that can help boost your business’s flow.

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