SKU (Stock Keeping Unit) is the essential unique alphanumeric identifier assigned to each specific product variation managed within a company’s inventory.
An SKU is critical for precise inventory management, allowing businesses to track stock levels, monitor sales velocity for different sizes or colors, and accurately forecast demand. It differs fundamentally from external codes like the UPC, as the SKU is an internal code optimized for warehousing, resource planning, and identifying product profitability. In manufacturing, SKUs must be effectively managed by ERP systems to ensure that production matches actual market demand at the product level.