In the world of enterprise resource planning (ERP), SKUs (Stock Keeping Units) are a critical element for managing inventory. These unique identifiers help businesses track products for inventory purposes and make informed decisions. However, not all SKUs are created equal. Some represent your ‘core’ products, the items that are central to your business and consistently sell well. Others are ‘non-core’ items that may be seasonal, niche, or less popular. In this blog post, we’ll delve into the nuances of managing both core and non-core SKUs in your ERP system.

Core SKUs are the bread and butter of your business. They are the products that consistently sell and generate a significant portion of your revenue. These are the items that your customers know you for and expect to find in your inventory. Managing these SKUs effectively in your ERP system is crucial to maintaining a steady cash flow and ensuring customer satisfaction.

Non-core SKUs, on the other hand, might not contribute as much to your overall revenue, but they’re still important. These products add variety to your offerings and cater to specific customer needs or desires. They might be seasonal items, products related to your core offerings, or niche products that only a subset of your customers are interested in. Managing these items effectively in your ERP system is crucial for maximizing profitability and keeping your inventory fresh and interesting.

Managing core SKUs effectively in your ERP system involves a focus on demand forecasting, stock replenishment, and pricing. It’s important to have accurate sales forecasts for these items so you can ensure you always have enough stock on hand. You also need to have effective pricing strategies in place to maximize profitability. This might involve dynamic pricing based on demand, competition, and other market factors.

Non-core SKUs require a different management approach. Given their unpredictable nature, forecasting demand for these items can be challenging. Therefore, it’s vital to have flexible stock replenishment strategies in place. For example, you might choose to order these items in smaller quantities and more frequently to avoid overstocking. Pricing strategies for these items might also be more dynamic, taking into account factors like seasonality and customer demand.

ERP systems play a pivotal role in managing both core and non-core SKUs. These systems provide real-time inventory data, aiding in effective stock management. They also offer insights into sales trends, helping you forecast demand accurately. Moreover, ERP systems can help automate various tasks related to SKU management, reducing manual effort and potential errors.

SKU rationalization is a process that involves analyzing your SKUs to determine which ones are truly profitable and which ones might be a drain on your resources. This process can help you identify your core and non-core SKUs and develop strategies for managing them more effectively. Implementing SKU rationalization through your ERP system can lead to improved profitability, streamlined operations, and better inventory control.

SKU segmentation is the process of dividing your SKUs into different groups or segments, usually based on characteristics like sales volume, profitability, or demand variability. This segmentation can help you identify which SKUs require more attention and resources. When implementing SKU segmentation in your ERP system, it’s important to consider factors like the accuracy of your sales data, the flexibility of your supply chain, and the needs and preferences of your customers.

As technology evolves, so do the strategies for managing SKUs in ERP systems. New trends like AI and machine learning are making it possible to predict demand more accurately and manage inventory more effectively. Additionally, the increasing use of cloud-based ERP systems is making SKU management more accessible and flexible. Staying abreast of these trends can help you manage your SKUs more effectively and maintain a competitive edge in your market.

In conclusion, managing core and non-core SKUs effectively in your ERP system is a delicate balancing act. It involves careful demand forecasting, strategic stock replenishment, and dynamic pricing. While core SKUs require a steady and consistent approach, non-core SKUs require more flexibility and adaptability. By implementing strategies like SKU rationalization and SKU segmentation, and by leveraging the power of your