Stock keeping units

Depending on the requirements of the operation, this system may also include breakdown or aggregation of inventory received into smaller or larger stock keeping units (SKUs) for onward distribution. It may also include interfaces to purchase order systems, labeling applications, automated materials handling systems such as sortation systems, stock location systems, automated storage and retrieval systems. Radio Data Terminals (RDTs), Radio Frequency Identihcation units... 

Type C deficiency results from customers making compromises between their real requirements and existing SKUs (stock keeping units), that is, what is available on the shelf or in the catalogue. Although these compromises are usually not explicit and are difficult to capture, they lead to customer dissatisfaction, reduce wiUingness to make future purchases, and erode the competitiveness of a company. 

Retail supply chains are different than other industry models. Many of the components of the supply chain are the same product sourcing, inbound transportation, processing, location and storage of inventory, outbound transportation, company operations, and information. However, retailers are at the end of the chain, just before the products touch the consumer. As a result, the retailer is at the end of the cumulative efficiencies and deficiencies of aU the chain partners. It may be that retail supply chains are just a bit more complex. Imagine the thousands of vendors, each with their own ideas and operations, aU moving with a thousand different retailers set of unique requirements and multiply this by the 90,000-t different stock keeping units (SKUs) in the typical large discount store. 

SKU stock-keeping unit, the type identification of a product for purposes of distribution for example, Coca-Cola Classic may be sold in 2-liter bottles packed 6 to a carton, 1-liter bottles packed 12 to a carton, 12-ounce cans packed 24 to a carton, 12-ounce cans arranged as 4 6-can inner packs in a carton, and 12-ounce cans packed 24 to a flat these would aU be different SKUs. 

SKU (stock-keeping unit), 2087 Slackness, complementruy, 2554 Slat conveyor, 1515, 1517 SLDs (second-level domains), 243 Sleeping, day, 1367 SLIM-MAUD, 2192... 

Key decisions at this stage involve the level of detail to include, e.g., a cross-product analysis rather than a focused analysis of an individual stock-keeping unit (SKU), the granularity of the data that will be considered (annual vs. monthly vs. daily flows), use of a finished goods inventory or work-in-process inventory, or whether the raw material and its sources will be included. These critical choices impact the Four C analysis. 

Computer skills, since demand forecasts are often need to be done at the Stock Keeping Unit (SKU) level for multiple periods of time, which usually generate tens or hundreds of thousands of entities. 

Forecasting level refers to the focal point in the corporate hierarchy where the new product forecast applies. Common levels include the stock keeping unit (SKU) level, stock keeping unit per location (SKUL), product line, strategic business unit (SBU) level, company level, and industry level. 

In order to construct our framework for inventory management in the supply chain, we first consider the inventory management problem at the consumption points i.e., at the locations where customer demands are realized. We call these locations the front-end points of the supply chain, or simply the end points. An end point will usually refer to a combination of place (geographic) and product type (stock-keeping unit). Initially, we shall assume that the end point does not face any supply delays for products it orders from its supplier. 

Stock-Keeping Unit (SKU) Annual Sales (Units) Annual Sales ( ) Cumulative % of SKUs Cumulative % of Sales... 

The basic logic of DRP is to compute the time-phased schedule of replenishments for each stock-keeping unit (SKU) in the distribution system that keeps the inventory level of that SKU at or above a specified safety stock level (which, of course, could be set to zero). Let the DRP horizon span planning periods t = and assume that the safety stock SS, the order lot size Q, and the... 

Mini-case study You are the new operations manager for the Northeast regional distribution center (RDC) of office supply retailer StapleMax. The distribution center (DC) you mange is located in Carlisle, PA. You have been asked by your new boss, the VP of Logistics, to evaluate inventory replenishment options for a set of stock-keeping units (SKUs)... 

Guess how many different models of an automotive brand are introduced per year Will that be a couple of two- and four-door sedan models, a few cross-over models, a few SUV models, a few convertible models, and a couple of sports models with a few colors Now compare this with an apparel brand, which produces many product lines each with many styles in multiple colors/prints, in multiple sizes, for a number of seasons per year. In most situations the brand may also have different product lines for different markets with different price points. The number of stock-keeping units (SKUs) produced by an apparel brand per year cannot be meaningfiiUy compared to the SKUs developed by an automotive brand. Now if you think of the product-development (PD) efforts for these two industries, it is quite clear that the PD for an apparel brand is quite complex. The PD gets further complicated with the time pressure to meet market demand for fashion items. Therefore, it is important and beneficial to understand the apparel PD process for anyone interested in careers in the apparel industry. 

Variety Greater variety results in a larger number of stock keeping units because the volume is split between alternatives. 

Its product range increased, between 1983 and 1996, from 5000 to 40,000 stock keeping units (SKUs) but at the same time lead time to stores came down from 7-14 days to 2 days, stock cover from 4.4 weeks to 2.4 weeks. This improvement was achieved by traditional initiatives of supply chain management such as centralized distribution, centralized ordering, POS scanning and Electronic Data Interchange (EDI) with its main suppliers. 

What we should be concerned to do at this stage in the analysis is to identify the contribution to profit that each product (at the individual stock keeping unit (SKU) level) makes. By contribution we mean the difference between total revenue accruing and the directly attributable costs that attach as the product moves through the logistics system. 

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