Warehouses of all sizes can improve their sales and profitability while keeping their facilities organized by simply following a few best practices for stock-keeping unit (SKU) management. SKU management systems help warehouse owners identify, track, and manage their inventory through a continuously updated alphanumeric tool that lets them know where their goods are at all times.
So, what is SKU inventory management? Many warehouses use SKU tracking systems because they’re among the most effective ways to keep tabs on your inventory as it progresses through the supply chain. SKU codes consist of numbers and letters that tell you important information about a given product such as its color, size, type, and location. A well-designed SKU inventory management solution is vital for any business that needs accurate, real-time data on the status of their goods.
Disorganized warehouses suffer from unnecessary productivity losses and other issues, like misplaced inventory and product theft. SKU tracking and management allow warehouse owners to immediately locate the items they need to compile valuable real-time process information. In turn, they use this data to make educated business decisions. SKU systems ultimately simplify revenue forecasting while increasing sales volumes by reducing inventory management requirements and tracking complexities.
Warehouses that forego SKU management or aren’t leveraging their current systems often struggle to reign their warehouses under control. In this article, we highlight a few best practices for inventory management before discussing how SKU systems improve warehouse productivity and increase merchandise sales.
How do SKU inventory systems work?
SKU tracking is among the most user-friendly management systems. These solutions typically form the foundation of a successful and well-organized distribution center. SKU technologies integrate with warehouse management systems (WMS) and other order and transportation management software to give you a more agile and reliable tool for precisely tracking your valuable inventory. SKU tracking systems draw from artificial intelligence to optimize management and visibility across an increasingly unpredictable supply chain.
SKU inventory management and automated WMS solutions from trusted 3PL suppliers like WiSys provide warehouse owners with a transparent picture of the relationships between their relevant process and distribution data. The increased visibility allows them to make faster, more reliable decisions on the fly. SKU systems help to reduce or eliminate mistakes associated with manual picking and packing procedures by automating the scanning and tracking process.
Companies that are overly reliant on clipboards containing handwritten or typed tracking information expose themselves to ongoing issues with misplaced inventory and disorganized distribution centers. SKUs and RFID scanners present the opportunity to move away from these antiquated paper-based processes that invite data entry errors and other inventory management mistakes.
Standardizing your picking procedures with SKUs and WMS software
The warehouse picking process can go any number of ways, depending on how you arrange your facility. But, regardless of how you approach your warehouse picking and packing procedures, SKU inventory management systems help to standardize them so that they’re easier to follow. Warehouse management systems and SKUs streamline picking, allowing your operators to gather items in batches instead of prepping them for distribution as the individual orders come in.
The best approach for maximizing picking efficiency is to reference your WMS-supplied data to analyze order creation trends and allocate the necessary resources to areas where the demand is highest. Access to accurate live-time data will help you eliminate the extra physical touchpoints and any unnecessary process steps to ensure timely fulfillment.
Improving transparency and information sharing
While many warehouses used to support one system for each of their locations, with almost all of them differing across their various warehouses and distribution centers, automated WMS solutions have helped to centralize operations under a more unified interface to improve cross-organizational communications in the following ways:
- Increased operational visibility
- More accurate inventory tracking
- Better streamlined order fulfillment procedures
- Easy accounting and ERP systems integration
- A single records-keeping system
Enhancements to each of these areas combined can go a long way in reducing your overall operating costs. SKUs and automated industrial warehouse software let you increase delivery speeds while improving communication across every department.
Tracking important warehouse KPIs
Successful warehouses closely track their fulfillment and inventory KPIs. SKUs supply warehouse owners and their operations managers with a real-world picture showing how their processes function in live time. They routinely monitor their operations to search for areas where they can improve efficiency. Some of your procedures may need to be tracked more closely than others. SKU tracking integrated with the right WMS software allows businesses to hone in on the valuable data necessary to implement improvements in several key areas.
SKU management and automation improve warehouse safety
Disorganized and perpetually unsafe warehouses can quickly lead to disaster. Optimizing safety at your warehouse not only protects your operators but also safeguards your own bottom line. Businesses that stress safe working environments through automation are more efficient without cutting corners to reduce costs.
When you know where your inventory is at all times, your operators will never have to start moving heavy objects and machinery around, manually searching for missing items. Because you’ve assumed a proactive approach, you won’t have to worry about employees unnecessarily injuring themselves or losing productivity. The upshot to this is lower insurance costs, fewer worker compensation payouts, and a safer, more efficient workplace.
Higher revenue earnings
If you follow just a few of these best practices and suggestions for strong SKU management listed above, you’ll almost assuredly increase warehouse revenue and realize better gross profit margins. SKUs allow you to stock your most popular products in precise quantities that will never leave you out of stock. Today’s consumers demand fast shipping, yet the margins on this commitment will always be low if you run a disorganized and inefficient warehouse steeped in manual procedures.
Avoid backorders and stockouts with SKU systems from WiSys
Our WMS software and SKU inventory tracking systems help companies avoid lost revenue attributable to human error and disorganized warehouse environments. Get a free quote and find out how SKU management solutions from WiSys can optimize your warehouse operations today by completing our online request for contact form or calling us now at 770-955-3550.