SKU Proliferation

SKU Proliferation: Is It Reducing Your Storage Efficiency and Increasing Your Costs?

In a competitive market, offering a wide variety of products feels like a must-do to meet diverse customer demands. However, there’s a hidden challenge many businesses face: SKU proliferation and its impact on storage efficiency.

What is SKU Proliferation?

SKU proliferation is the rapid expansion of product offerings—new sizes, colours, packaging, or features—all designed to capture market share. While this strategy can boost sales, it often introduces inefficiencies that quietly affect operations:

• More Space Needed: Every new SKU requires storage, increasing warehousing costs.
• Reduced Efficiency: Low-turnover SKUs occupy valuable space, hindering the storage and management of high-demand products.
• Operational Complexity: Picking, packing, and organizing become more challenging with greater SKU variety.
• Higher Costs: Inventory holding and warehouse management expenses can significantly cut into your margins.

 Strategies to Manage SKU Proliferation Effectively

• Rationalise Your Inventory: Identify and consolidate underperforming SKUs.
• Leverage Technology: Implement tools like Warehouse Management Systems (WMS) and demand forecasting for smoother operations.
• Optimise Storage Space: Use vertical storage solutions to maximise warehouse capacity.
• Focus on Profitability: Continuously assess which SKUs add value and which drain resources.

Key Takeaway

It is critical to balance variety and efficiency. While SKU proliferation can boost customer satisfaction, unchecked growth may lead to operational bottlenecks and increased costs. Regularly evaluating your product mix ensures you meet customer needs without sacrificing efficiency.

If you’re looking for strategies to effectively manage your inventory, feel free to reach out!

Meet Our New Robots

One of the benefits of our robotics technology is the ability for rapid deployment. It took just two weeks for Paul Howie and the Körber Supply Chain team to set up two individual Libiao Robotics sort tables.

This speed, combined with the flexibility and scalability to adapt as our business evolves, made this solution the clear choice for us. As a 3PL, we often face unpredictable variables – but with a flexible and scalable solution, we can ensure continued success both now and in the future.

Curious about how this technology can benefit your business? Reach out to us at aaron@dsl.co.nz. Let’s transform your operations together!

Click on the image below for a time-lapse of the two-week installation.

Fun with Robots

TikTok movie of the team having some fun with our new state-of-the-art robot sorters.

Naomi Pua placed her phone on top of a pair of shoes on a robot and followed it to the drop into a carton addressed to its destination. Her little movie went viral on TikTok.

Movie Director: Naomi Pua

Manawa Bay

Auckland's newest shopping mall, Manawa Bay, opened in September 2024. At DSL Logistics we store, pick and deliver stock for 15 of the fashion retailers in that mall.

 

Our teams were busy in the weeks leading up to the opening, coordinating initial stock orders, various ancillary activities, and even shop-fittings, helping all of our customers to achieve a successful launch at the new mall.