Who Should Lead SKU Rationalization: Key Roles & Stakeholders

SKU Rationalization is not a one-person task; it’s a coordinated program that touches many parts of an organization. Identifying who should lead and participate is the first practical step to reducing SKU complexity while protecting revenue and service levels. Below is a beginner-friendly guide to the typical roles, responsibilities, and governance structures that produce successful SKU rationalization.

Core leadership and stakeholders

• Category or Product Managers: Often the natural owners of SKU portfolios. They understand customer needs, assortment strategy, pricing, and promotional plans. Their role is to recommend which SKUs align with strategy and which underperform relative to category goals.
• Supply Chain / Logistics Managers: Bring operational insight—warehousing, picking complexity, packaging, lead times, and distribution impacts. They quantify the cost side of keeping or removing a SKU.
• Finance: Provides margin analysis, carrying cost models, and ROI calculations. Finance validates the economic case for rationalizing SKUs and helps model inventory write-offs or savings.
• Sales & Account Managers: Represent customer-facing concerns. They raise real-world demand nuances, key account dependencies, and potential commercial impacts of discontinuing items.
• Operations / Warehouse Managers: Highlight physical constraints—space, slotting, picking accuracy, and labor implications of SKU proliferation.
• Marketing & Merchandising: Provide insights on brand architecture, packaging, campaigns, and seasonal promotions. They help ensure assortment changes won’t conflict with marketing plans.
• Procurement & Suppliers: Inform lead times, minimum order quantities (MOQs), packaging options, and supplier consolidation possibilities. Involving suppliers early can uncover alternatives like SKU harmonization across regions.
• Data & IT (WMS/ERP Specialists): Responsible for extracting, cleansing, and analyzing SKU-level data such as velocity, margin, demand variability, and inventory days of supply. They also implement master data updates after decisions are made.
• Legal / Compliance: In regulated industries (pharma, food, hazardous materials), legal ensures discontinuations meet labeling and regulatory requirements.
• External Consultants: Optional, but helpful when internal bandwidth or impartial analysis is needed. Consultants can supply frameworks, benchmarks, and change management support.

Typical team structure and governance

Successful SKU rationalization programs typically form a cross-functional steering committee and a working team. A recommended model:

1. Steering Committee: Senior leaders from Product, Supply Chain, Finance, and Sales. Approve criteria, thresholds, and final decisions for contested SKUs.
2. Project Lead / Program Manager: Coordinates analysis, timelines, communications, and follow-through. Keeps the project on schedule and manages stakeholder alignment.
3. Working Team: Data analysts, category leads, sourcing, and operations specialists who run the scoring, pilot tests, and implementation tasks.

Decision rights and escalation

Define in advance who can approve—remove, merge, or replace—a SKU. Use a RACI (Responsible, Accountable, Consulted, Informed) matrix so every SKU change has a clear owner for each step: analysis, commercial sign-off, financial approval, and operational execution. For example, the category manager might be responsible for recommendations, finance accountable for the financial sign-off, and the steering committee empowered to make final decisions for high-value or contentious SKUs.

Practical examples

• In a mid-size e-commerce retailer: The head of merchandising leads with support from operations and finance. Data analysts prepare SKU velocity and return-rate dashboards for weekly reviews.
• In a consumer packaged goods (CPG) company: Category managers work with procurement and R&D to assess consolidation of pack sizes; supply chain models the downstream warehousing savings.

Best practices for who to involve

• Start with a small, empowered core team to avoid paralysis by committee.
• Include commercial and operational viewpoints early to balance revenue protection and cost savings.
• Bring in data/IT at the outset to secure clean, consistent SKU data—decisions are only as good as the data.
• Assign a program manager to track outcomes and ensure deactivated SKUs are removed from systems and downstream processes.

Common mistakes to avoid

• Excluding sales or key account managers and then losing customers because a SKU was discontinued without warning.
• Relying on incomplete or inconsistent data, leading to wrong conclusions about SKU performance.
• Not defining decision authority, which results in stalled or reversed changes.

Ultimately, SKU rationalization is a collaborative effort. Clear leadership, cross-functional involvement, and defined decision rules make the “who” question straightforward and increase the chance of measurable, lasting results.