Stock Keeping Unit
A Stock Keeping Unit (SKU) is a unique identifier assigned to a specific product variant in inventory management. Each SKU represents a distinct combination of product, size, flavour, colour, or packaging format.
FMCG businesses typically manage hundreds or thousands of active SKUs across their portfolio. SKU rationalisation (reducing the number of SKUs) is a common cost-saving initiative, while NPD (new product development) adds new SKUs. Managing SKU complexity is a key challenge in demand planning, supply chain, and retail ranging.
Understanding SKU management is essential for roles in supply chain, category management, demand planning, and brand management. Job descriptions in FMCG frequently reference 'managing a portfolio of X SKUs' as a key responsibility.
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