When a business grows large enough to keep an inventory, management needs to learn how to identify other parts within their order fulfillment center, manufacturing center, stockroom, or warehouse. This code is created with a string of letters and numbers that is called either an item number, product code, or stock keeping unit. The shorthand for this is the acronym SKU – which is pronounced “skew.” It’s the fundamental element of accurately tracking inventory. It provides a unique identification code for each item being held in stock, allowing different departments to count and monitor the flow of the item through a warehouse or manufacturing process. As an additional benefit, creating SKUs and implementing live inventory can act as an effective part of a stop-loss program. The Balance enumerates some ways that an otherwise healthy inventory can wither. Reasons for inventory shrinkage include employee theft, paperwork errors, and vendor error or fraud.