How (and why) to create a unified naming scheme for your products

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As entrepreneurs, we often start small – a home office, maybe a garage.

But as your business grows, moving into a larger space like a warehouse, the need for organization becomes paramount. One critical aspect of this organizational journey is implementing a unified naming scheme for your products.

This can make a huge difference to your operation, from efficiency through to profitability.

Consistency is the magic word

Let's talk benefits. When it comes to a unified naming scheme, the one that stands out is...

1. Error reduction

A unified system ensures that everyone in the company, from purchasing to inventory management, is on the same page. This clarity in communication minimizes confusion and accelerates problem-solving, making your operations more efficient. But it's not just about error reduction...

2. Simplify to scale

As your business scales up, the complexity of managing a growing inventory also increases. A unified naming scheme can greatly simplify this process, ensuring that new products are integrated seamlessly. This approach not only speeds up the process of stocking and selling but also significantly reduces the potential for errors.

3. Clean Data Analysis

Data is king. And if you've got hundreds of orders coming in each day, you need to move fast. But how can that happen if you're naming conventions are all over the place?

A unified naming scheme ensures that data is consistently categorized, making it much easier to track trends, forecast demand, and make informed decisions.

4. Better Customer Experience

This one often goes unnoticed. But there's a huge impact on customer experience. Think about it.

When inventory is managed with a clear and consistent naming convention, it translates into faster order processing, accurate order fulfillment, and easier product discovery for both staff and customers.

Win-win, right?

In today's market, where consumers hold higher expectations for service and quality, the importance of operational efficiency and accuracy cannot be overstated. A unified naming scheme plays a pivotal role in meeting these demands by streamlining inventory management and order processing.

Implementing the SCORE methodology

Want to take that next step? By following a simple methodology (yes, it's kind of quippy), you can transform your SKU design (and your business along with it) in no time at all.

Step 1: Simplicity

An efficient naming scheme is essential for ensuring clarity both within your organization and with external partners like suppliers. Avoiding confusion is crucial, especially in scenarios where purchase orders involve your internal SKU codes instead of supplier part numbers. Integrating both identifiers can streamline communication and transaction processes, making operations smoother for everyone involved.

For instance, a simple and effective SKU for a water bottle could be structured as "WTLB" for water bottle, followed by a dash and the manufacturer's model number. This approach ensures the SKU is straightforward and universally understandable, from manufacturing to customer purchase, facilitating easy product identification and minimizing potential confusion across the supply chain.

Step 2: Compatibility

Next up? Compatability. You want to make sure your SKUs are compatible across your business's entire suite of software. This not only involves aligning with regulatory standards, such as the specific formats required for GS1 barcodes but also being mindful of the technical constraints of your software systems.

You don't want overly long or excessively short SKUs, and you want to steer clear of using special characters, like ampersands or colons, which some systems might not recognize or could misinterpret.

A practical approach? Opt for universally accepted characters, such as hyphens or dashes, which are generally safe to use across different platforms. This helps maintain the integrity and functionality of your inventory management system, ensuring seamless operation and compliance.

Step 3: Obscurity

What do I mean by this?

Not being overly ambiguous with your SKUs. Make them simple enough to understand at a glance.

BUT...at the same time, you don't want them so simplistic that they're easily confused with other products. This will bring friction into your operation and slow things down. It's a breeding ground for mistakes.

The goal is to design a system where each SKU is sufficiently distinct to avoid duplication and confusion, yet remains intuitive enough for easy recall and recognition.

Step 4: Relevance

Next, let's address the importance of relevancy in your SKU structure. This means incorporating key data about the item directly into the SKU.

Take the apparel industry as an example: if you're dealing with a specific model or design, that model number becomes a part of the SKU.

For instance, if "ABC" represents the design, you can add "-RD" to denote the color red, followed by "-XL" for the size.

This method provides a straightforward way to categorize your products. As you expand your inventory to include a full size run of that red shirt, the SKUs would evolve accordingly: "ABC-RD-S" for small, "ABC-RD-M" for medium, and so on, ensuring that each product variation is clearly identified and easily traceable.

Step 5: Ease of Use

Running a business demands a significant amount of energy, both in terms of physical effort and mental focus. Much of this energy goes into solving problems and streamlining processes to make operations as efficient as possible.

Simplifying any aspect of your business operations, including SKU design, can save valuable time and reduce the likelihood of errors.

Ease of use involves considering all parties that interact with the SKU—from employees within your organization to customers and suppliers in your supply chain. It's crucial that the SKU is not only simple but also practical for various uses, such as barcoding, visual identification, and machine reading.

This focus on usability ensures that everyone who comes into contact with your SKUs can easily understand and use them as intended, thereby enhancing the overall efficiency and effectiveness of your inventory management system.

Next Steps for Implementing a Unified Naming Scheme?

Adopting a unified naming scheme for your inventory is not just an operational necessity; it’s a strategic move that enhances clarity, efficiency, and scalability within your business.

When paired with a comprehensive inventory management system like Linnworks, this approach becomes even more powerful. Linnworks complements a well-structured naming convention by automating and streamlining inventory management processes, making it easier to track products, fulfill orders, and analyze sales data.

Want to take a look around?

Book a demo or contact us today to explore how our system can transform your operations, making your business more efficient and responsive to your customers' needs.

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