SKU Proliferation – Can You Handle It?
If the ever-growing number of SKUs has you wondering how you’re going to keep up with demand, don’t worry. Help is on the way.
If you’ve been in the tire industry for a decade or more, you’ve no doubt noticed that SKUs seem to be multiplying like proverbial bunnies. A recent market survey shows just how quickly their numbers are growing.
In 2002, 464 sizes were available on the market. By 2010 that number rose to 649 – a 40% increase. In 2002, the top 10 sizes, by popularity, covered 43% of the fitments on the market. By 2010 the top ten sizes only covered 38%.
Consider also that in 2002, 15% of the vehicles produced in the USA and Canada were fitted with OE tires in the 17-inch or greater size range. By 2010, that number rose to 57%.
Size vs. SKU
But wait, there’s more! The numbers mentioned above tell us about the growth in the number of sizes. But that doesn’t give us the whole picture because each size can have multiple SKUs – P205/55R16 89S, P205/55R16 89H, 205/55R16 91H, etc. And if that weren’t enough, this can be further fragmented by summer or all-season treads and by OE homologations. As a result, some tire sizes can encompass 10 or more different SKUs.
What is driving this SKU proliferation? The main reason we’re seeing so many SKUs has to do with automobile manufacturers and their OE requirements. Manufacturers choose certain tires for their vehicles for a number of reasons – both technical and aesthetic.
Just a tire?
A tire is no longer just a tire. On today’s automobiles, the tire plays a wider technical role than it did 20 years ago. Today, the tire is a very important part of a vehicle’s suspension and braking system. The 17-inch low profile tire on a subcompact car makes a significant contribution to that vehicle’s stability, steering response and braking distances.