What are the different stages in the SKU lifecycle?
The SKU lifecycle consists of several stages that a specific product goes through from its introduction into inventory to its eventual removal. These stages include procurement, storage, sales, and discontinuation or replacement. During the procurement stage, the product is sourced or manufactured and added to the inventory. In the storage stage, the product is kept in a warehouse or storage facility until it is ready to be sold. The sales stage involves promoting and selling the product to customers. Finally, the product may reach its end-of-life stage, where it is either discontinued due to low demand or replaced by a newer version.
How does tracking the SKU lifecycle benefit businesses?
Tracking the SKU lifecycle provides several benefits to businesses. Firstly, it aids in stock management by allowing businesses to track inventory levels and make informed decisions about restocking or replenishment. By monitoring sales data and customer demand, businesses can optimize their inventory levels to avoid stockouts or overstocking. Secondly, tracking the SKU lifecycle helps businesses in pricing strategies. By analyzing sales performance at different stages of the lifecycle, businesses can adjust pricing to maximize profitability. Lastly, tracking the SKU lifecycle assists in demand forecasting. By understanding the product's lifecycle, businesses can anticipate demand fluctuations and plan production or procurement accordingly, minimizing the risk of excess inventory or lost sales.
What factors should be considered when managing the SKU lifecycle?
When managing the SKU lifecycle, businesses should consider several factors. Firstly, they need to analyze market trends and customer preferences to ensure that the SKU aligns with current demand. Understanding the product's life cycle can help in deciding when to introduce new versions or discontinue old ones. Secondly, businesses should keep track of sales data and inventory levels to optimize stock management. Balancing supply and demand is crucial to avoid stockouts or excessive carrying costs. Additionally, businesses need to consider pricing strategies throughout the SKU lifecycle. Different pricing strategies may be applied at different stages to maximize profitability. Lastly, businesses should regularly review and analyze the SKU lifecycle to identify opportunities for improvement and adapt their strategies accordingly.