Inventory planning
SKU (Stock Keeping Unit)
By the Supply Chain Manager team · Updated October 16, 2026
A SKU (stock keeping unit) is your internal code for one distinct item you stock, unique down to size, color, pack size or any variant you track separately.
A SKU is yours; a manufacturer part number or a barcode (GTIN/UPC/EAN) belongs to the product. One product can have several SKUs, for example a single unit and a case of 12, and two suppliers' identical products can map to one SKU if you treat them as interchangeable.
Every inventory number, from on-hand stock to forecasts, is kept per SKU, usually per SKU per warehouse. Clean, consistent SKU codes are what make that data usable.
SKU example
Illustrative: a distributor might use HRD-5005-10 for a 10-pack of a hinge and HRD-5005-01 for a single hinge, both pointing to the same manufacturer part number but planned, priced and stocked separately.
Why SKU matters for distributors
Duplicate or inconsistent SKUs split one item's demand across codes, so each looks slower than it is and both get under-ordered. Data imports, forecasting and reporting all depend on a clean SKU list.
Common SKU mistakes
- Reusing an old SKU code for a different product.
- Creating a new SKU per supplier for the same interchangeable item.
- Encoding so much meaning into codes that they break when the range changes.
Examples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.