SKU rationalization

Each addition is individually justified. A new color for a customer segment, a new size for coverage, a variant for a channel. None of them is wrong on its own, and the cumulative effect is an assortment with more options than demand, more setup costs, more allocation complexity and more ways to be wrong about a size curve.

Inventory complexity compounds: options multiply by sizes, and every combination needs stock somewhere to be available.

Naive rationalization ranks SKUs by sales and removes the tail. That destroys value when the tail SKUs are the ones that bring customers who then buy the head. Better analyses look at incremental contribution, whether a customer who bought the tail SKU would have bought anything else, and at the cost each SKU imposes on setup, allocation and markdown.

Categories where minimums are high are worth cutting first, because each surviving option carries a larger forced commitment, as in minimum order quantities.

Fewer options means deeper buys on the survivors, which lowers unit cost and improves in-stock rates on the sizes that matter. It also reduces the residual that ends up in clearance, which is the quiet benefit: a narrower assortment generates a cleaner leftover.