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SKU rationalisation - will it stick?

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Ed Lawson

There's been an imperative to reduce SKUs and call a halt to SKU proliferation in order to prevent empty shelves. So the license to simplify has been created - but will it stick? What are the factors at play?

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Dirk Lembregts

As we will likely see overall complexity of SC designs go up, it will be increasingly important to reduce unwarranted complexity(=complexity not adding value). Managing SKU range is  one possible lever and this option is now more actionable as last months changed the ‘realm of the possible’ on how much and how fast can adjust SKU range. 

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  • 3 weeks later...
Louisa Hosegood

Businesses have out of necessity reduced their sku range to manage through the recent covid peaks, whether to cope with surges in overall demand or because their operations and people available were restricted.  

You could argue the sku range and choice available to customers was already starting to get out of hand pre-covid - how many versions of black trousers do you really need? every shape size material - that's not really personalisation, you could suggest that was buyers not having confidence in their selections or not knowing their customers well enough?

Dirk's post above about reducing complexity is right - supply chains are already complex and for future efficiency and profitability we need to be looking at all levers.  High sku range has implications across the board - buying admin, minimum order quantities, container fill, separate warehouse storage and pick slots, risk of obsolescence, not to mention any sustainability considerations for constant sku churn - the list is endless. 

Consumer habits and expectations have softened and changed during lockdown, this might be one of those opportunities for businesses to influence making it stick, for their own sake?

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