Stock Keeping Unit (SKU) is the lifeblood of modern commerce and B2B sales. The quality, effectiveness and speed with which SKUs can be introduced and changes managed are major determinants of success of the SKU. Managing the lifecycle of an SKU is inherently a cross-functional process that requires product management, sales, supply chain, merchandizing, finance, quality and many other teams working together.
The lifecycle of an SKU mimics launch of a New Product and can involve a number of phases as shown below
Many organizations small and large face great difficulty effectively managing workflows that support SKU lifecycle. The consequences are all progressively bad, including
- Confusion for sales teams and customers
- Lack of supplier readiness
- Logistics, fulfillment issues and more
- Poor e-commerce support
ZFlow, due to its roots in new product introduction and supply chain development provides exceptional support for SKU lifecycle management. It provides capabilities to manage lifecycle of the SKUs, related information, and effective activity based workflows for cross-functional collaboration needed for decision-making, systems integration and end-to-end visibility.
Depending upon the industry and corporate strategy the SKU Lifecycle Management phases and activities during each phase may vary.
Retail SKU Lifecycle
Most retail companies primarily source products that they believe they can sell and make profit and source the SKUs directly from appropriate suppliers. In addition, retailers also have established relationship with brand owners (CPG, apparel..) and act as a pass through distribution channel for brand owners.
SKU Lifecycle in Apparel/Fast Fashion
The Apparel and Fast Fashion SKU lifecycles are even more condensed and look something like the picture below
SKU Lifecycle in Consumer Packaged Goods Industry
The lifecycle of consumer packaged goods is generally move involved with a longer time period and more phases.
Durable goods often have a more comprehensive lifecycle and many include additional phases as well as much longer post launch phases.
SKU Lifecycle and Related Information Management
In many scenarios and systems SKU is often associated with, or even represented as an item/part/material. SKU has 2 sides in terms of business processes and information needs. Our focus in this post is mostly on SKU Lifecycle Management as it relates to customer/consumer facing processes.
Launching an SKU
The launch phase of an SKU is the most critical phase of the SKU lifecycle. This phase is truly cross-functional and requires a coordinated approach to complete many activities in a timely and synchronized manner.