The Role of SKU Management in SKU Rationalisation Projects

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

Abstract

The increased demand for product variety implies that many manufacturing companies are struggling with the negative effects of stock keeping unit (SKU) proliferation in product portfolios. This implies that many companies implement SKU rationalisation programmes to deal with product and process complexity. However, many industry companies report that they do not gain the financial benefits that they expected from optimizing their portfolios. To improve the understanding of this phenomenon, this paper studies an unsuccessful SKU rationalisation project at a hearing healthcare company. The case study revealed that what appeared to be a great potential for reducing inventories through SKU rationalisation turned out to be more of an SKU management problem. Specifically, analyses showed that 19% of the hearing devices' product portfolios had multiple SKUs for the same product variant, and that SKU rationalisation would only produce minimal inventory-related benefits. The case study therefore demonstrates the importance of proper SKU management in identifying fruitful SKU rationalisation projects.

Original languageEnglish
Title of host publicationProceedings of 2021 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM)
Number of pages5
Publication date2021
Pages259-263
DOIs
Publication statusPublished - 2021
Event2021 IEEE International Conference on Industrial Engineering and Engineering Management - Virtual event, Singapore, Singapore
Duration: 13 Dec 202116 Dec 2021
https://ieeexplore.ieee.org/xpl/conhome/9672597/proceeding

Conference

Conference2021 IEEE International Conference on Industrial Engineering and Engineering Management
LocationVirtual event
Country/TerritorySingapore
CitySingapore
Period13/12/202116/12/2021
Internet address

Bibliographical note

Publisher Copyright:
© 2021 IEEE.

Keywords

  • Customer decoupling point
  • Inventory costs
  • SKU management
  • SKU proliferation
  • SKU reduction

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