When you devise an inventory system, one of the most important things you must do first is come up with a clever numbering system that’s relevant and easy to remember. Here’s how to do that, and use software to manage it for you.
Getting Good Software
The first thing you need is a good inventory management software program – one that simplifies the task of organizing by providing automation tools, a solid UI, and is maintained by a third party (unless you want to be in the software development business too).
Good software should help you keep a record of incoming and outgoing inventory easily, it should help you manage shipments and integrate with sales and marketing, making it easier to track inventory turnover.
Creating SKU Numbers
Create SKU numbers, or tracking numbers, that are easy to remember and understand. Don’t start with zero. This is a newbie mistake, and one that some companies realize too late. Zero item numbers don’t allow for any wiggle room, and they make overhauling product lines a complicated affair.
Avoid using letters that can be confused with numbers, or make it clear that your item numbers don’t contain any letters. The usual suspects are “O,” “I,” and “l.” But, on some computer systems, “S” can also be a problem, as can
Keep Numbers Short
Don’t make numbers any longer than they have to be. A good rule of thumb is to start in the 1,000s or 10,000s. But, you could also start in the 100s if you think it works for your company. There’s no need to have a 14-digit SKU unless you really do have thousands of products and hundreds of thousands of variations. A 4 to 8 character SKU is perfect.
Don’t Describe The Product
Don’t try to describe your product in the SKU. This is something that some businesses have tried to do. It’s clever, but ultimately confusing if that product is ever replaced by another one, and it can make the SKU longer than necessary, and add unneeded complexity.
Instead, use the item description to describe the product. That’s what it’s there for. And, by avoiding describing the product in the SKU, you also add clarity to the SKU and the management system, instead of creating a hash of secret codes that need to be deciphered by new employees that join the organization later on.
Sometimes, letters can make sense, but only if you’re avoiding letters that can be confused with numbers, and only if it adds clarity to the tracking. For example, if you have products separated by zone or location, you might use “A” or “B” to designate the location and then the SKU.
Keep Information To A Minimum
Keep information to a minimum in your SKU. Save the expiration date, manufacturer name, the vendor name, the country of origin, and any other similar information for the item description. Sometimes, things like commas can confuse the system and make it look like a price within the SKU, so avoid special characters as well.
Max Gardiner is the assistant stockroom manager for a large warehouse. He loves sharing his experiences online. You can read his articles on a variety of management and business websites.