A stock keeping unit (SKU) is a unique alphanumeric code assigned to a specific product variant to track it through a warehouse and supply chain. Each distinct combination of product attributes that a business buys, stores and sells as a separate unit gets its own SKU. For example, the same t-shirt in blue medium and blue large would have different SKUs even though they share a product family. In Microsoft Dynamics 365 Business Central, SKUs correspond to item numbers and can be further refined using item variants and SKU cards for location-specific configuration.
How SKUs work in Business Central
Business Central assigns each item a unique item number that functions as its internal SKU. Where a product comes in multiple variants (size, colour, configuration), Business Central's item variants feature allows those to be tracked under a single item number with variant codes differentiating them. SKU cards extend this further by allowing each item-location combination to carry its own planning parameters, replenishment method and default vendor, so a warehouse in Manchester and a warehouse in Birmingham can replenish the same SKU using different rules without maintaining separate item records.
SKUs in practice
- A UK wholesaler with 12,000 active lines uses Business Central item numbers as internal SKUs and maps them to supplier reference codes and customer part numbers through item cross-references, so orders from any source can be matched automatically.
- A clothing distributor uses item variants to track size and colour combinations under a single parent item, reducing the item catalogue from 40,000 lines to 8,000 parent items without losing variant-level stock visibility.
- An operations manager uses SKU cards to configure separate reorder points for the same product at two warehouse locations, reflecting the different demand rates at each site.
- A purchasing team runs the planning worksheet in Business Central, which evaluates open demand and current stock by SKU across all locations to suggest consolidated purchase orders to each supplier.
How Advantage structures SKUs in Business Central
Advantage designs item and SKU structures in Business Central during implementation, covering item numbering conventions, variant configuration, cross-reference mapping and SKU card setup for multi-location businesses. Getting the SKU structure right at the start avoids the common problem of item proliferation that makes reporting and planning difficult as the business grows.
Find out how Business Central manages your product catalogue →
Frequently Asked Questions
Common questions about SKUs and item management in Business Central.
