SKU method: a unique code for each inventory item

The SKU method is an inventory management strategy that has gained some prominence in recent years and can also be applied to vehicle fleets.

Its main function is to organize spare parts, also including lubricants, oils and other items that may be needed to keep vehicles in good condition and maintain them.

Learn more below:

• What the SKU method is
• How it works
• How to use it for fleet inventory management
• Benefits for the fleet
• How to implement it in your operation

What is the SKU method?

“Stock Keeping Unit”, or SKU, is a unique identification code for items, made up of letters and numbers.

This combination describes the product and creates a type of record that makes searching and accessing its history easier, showing whether it is still in inventory or has been sold, delivered, replaced, etc.

Is an SKU like a barcode?

Both are product identification codes, but a barcode can only be read by a system. Meanwhile, an SKU is created by the company itself following a logical sequence, and anyone can read it.

In addition, while a barcode is standardized and identical for all items of the same type, an SKU can be customized to include specific information relevant to the company, such as inventory location, supplier, product category and other specific characteristics.

How does the SKU method work?

An SKU code is created from product characteristics and generally consists of:

• Manufacturer
• Material
• Size or dimensions
• Item description
• Color
• Packaging
• Warranty

When a truck carries 50 boxes of red wine, 50 boxes of white wine and 50 boxes of rosé wine, it is carrying 3 different SKU types, one for each wine type.

For example: VIN-700-TIN-PORT

• VIN: Stands for wine
• 700: 700 ml
• TIN: Red
• PORT: Portugal

We have the SKU for a 700 ml red wine of Portuguese origin.

It is important to remember that more details can be included for each product, especially to describe the small variations in each inventory item.

The more descriptive it is, the faster it can be located.

How do you use the SKU method for fleet inventory management?

To start, identify and catalog all fleet items that will be part of inventory, such as spare parts and tools.

After that, each item receives a unique SKU code based on its characteristics, such as manufacturer, material type, size and other relevant specifications.

This code should then be recorded in an inventory management system, where all incoming and outgoing items will be monitored.

In addition, keeping SKUs up to date is essential to improve inventory accuracy.

Integrating the inventory management system with other fleet management systems can also be important to keep every department — from maintenance to finance — aligned.

Benefits of the SKU method for the fleet

Using the SKU method brings several benefits to fleet inventory management, contributing to efficient, organized vehicle maintenance.

Among the main benefits, we can highlight:

Inventory organization

Implementing the SKU method makes identifying and locating inventory items easier. Each part or tool has a unique code, avoiding confusion and allowing more precise inventory control.

Faster restocking of inventory items

With SKU codes and an inventory management system, it is possible to monitor the available quantity of each item in real time.

This allows more precise restocking, avoiding shortages and ensuring the fleet always has the parts it needs.

Fewer errors and losses

SKU standardization reduces human errors when recording and moving inventory items. Moreover, it helps identify problems quickly and take corrective action.

For example, items that expire or may be damaged over time can end up wasted without efficient inventory management. With the SKU method, the code can identify an item's entry date so it is used as a priority.

Easier management of multiple locations

For companies with multiple garages or maintenance centers, SKUs standardize inventory control across all locations. This simplifies management and provides a consolidated view of all available items, facilitating transfers and adjustments.

Efficient cost control

With more detailed inventory control, it is possible to optimize purchases and reduce unnecessary costs. Using SKUs also helps identify slow-moving items and plan acquisitions better.

How do you implement the SKU method in your operation?

Start by planning which items will be categorized, how they will be categorized, which system will be used, among other details.

The steps for implementing the SKU method in fleet inventory management include:

1 – Take a complete inventory

The first step is to take a complete inventory of all fleet inventory items, such as spare parts, tools and supplies. This will make it possible to identify and catalog all items that need coding.

2 – Define the coding structure

Establish an SKU coding structure that is logical and easy to understand. It should include categories and subcategories representing item characteristics, such as manufacturer, material type, size and other relevant information.

For example, an SKU code for a tire could be something like “PNE-23-PIR-OFF”, where each part represents a specific item characteristic, such as “tire, rim 23, Pirelli, off road”.

3 – Purchase the system to manage your inventory

This makes recording, searching and updating codes easier, while providing detailed reports on item movement.

A fleet maintenance management system may have this feature and speed up your operations, as it already brings together and centralizes data on maintenance services and parts used in one place.

4 – Train the team

Ensure the entire team responsible for inventory management is properly trained in what the SKU method is, how to create and interpret codes and how to use the purchased management system to record and monitor items.

5 – Assess and adjust

Periodically assess the SKU method's effectiveness in inventory management and make necessary adjustments. Gathering team feedback and analyzing performance data help identify areas for improvement and ensure the system continues to deliver the expected benefits.
To understand even better how to optimize your fleet's inventory management, get our inventory management kit (in Portuguese).