What is a SKU?
Sometimes we hear and then use industry jargon without having a clear definition of what they are. I think all of us are guilty of this from time to time. This post clarifies what a SKU is, and discusses how SKUs are used in the supply chain, and in EDI.
Definition: SKU stands for “Stock keeping Unit” initially used for identifying items that a company keeps in stock so that they can track how many they have and such. Now also used for services, and for contracts or warranties.
Usage:
The SKU is assigned to each thing. And it is unique to the company that issues it. You might think this is the Vendor Catalog Number, but this is not always the case. The SKU does not just refer to the type of item, say a plate, but also how it is packaged. So a plate, and a box of plates would have different SKU numbers. This is one reason that the VCN will not always be the same. If you order a case, but the vendor is out of cases, but has the same unit quantity of boxes, they may respond and ship the 10 boxes that comprise a case.
Sometimes this is not a great solution. I had a customer once that ordered a case of tape refills. The vendor was out of cases, but had the individual refills. So they shipped 500 tape refills. The customer then had to inventory and stock the individuals, they were not having a good day.
Sometimes the SKU contains some of the UPC number. But again these numbers are not the same. The UPC is about identifying the Unique item type, the SKU is about identifying the stocking unit.
Looking in my handy EDI Standards Reference, I see that on 4010 PO1 line items, the SKU number is qualified by the “SK” qualifier. If you are using a number you think is a SKU when you order, but you are qualifying it with a “VC” then you are really using the Vendor Catalog Number.
EDI Example:
PO1*AAA849*100*DP*100.00**SK*123ABC******************~
As you can see, the PO1_06 is “SK”. This indicates that the PO1_07 is the SKU number.
cXML Example:
<ProductRequest itemNumber=”1”>
<SupplierPartNumber>123ABC</SupplierPartNumber>
<UnitOfMeasure quantity=”1″ unit=”DP”/>
<Quantity>100</Quantity>
</ProductRequest>
In cXML it is less specific. The SKU number is found in the contents of the “SupplierPartNumber” tag. This may not always be used for a SKU Number. However, I don’t know that <stockKeepingUnit> or <SKU> are valid tags in cXML form.
And thus we see why the confusion comes in as to what a SKU is. Some standards like cXML are loose in their definition of these item identifying numbers and some materials systems as well. And then others want to know what the SKU is so that they know if a pallet or a envelop are being confirmed on the ship notice.
Rationalizing these systems becomes an important task. And paying attention to when the type of part number changes can help a supply chain integration alert people in advance of 500 individual tape refills showing up on your table.
Question?
What terms or peices of jargon have you heard people missusing? Or have you done this yourself? Let me know in the comments and I may post about some of them as well.
Subscribe to "The Integration Engineer" by Email
Find out about the tools and services available at The Integration Engineer's Consulting site.
