What Is Lot Tracking and Why is it Important?

Lot tracking is an important part of warehouse management. It requires you to assign lot numbers to each batch of certain types of inventory items that come to your warehouse. Lot tracking is essential for food and beverage items, as well as for other goods that have a limited shelf life. It also makes compliance with FDA regulations more manageable, prevents waste, and protects your company from legal liability in the event of a safety recall. With an efficient lot tracking system, you can manage recalls easily and avoid having to throw away products that are past their expiration date without adding too much to the amount of warehouse space you require.

What is Lot Tracking?

With lot tracking, you assign a batch number to every shipment of perishable goods that arrives at your warehouse from the suppliers. This way, even if you keep the inventory at several different warehouses managed by different distributors, everyone will know which batch is which because of the SKUs. Lot management is important in many sectors, including the aviation, electronics, and pharmaceutical industries. If your warehouse stores food, drinks, medicines, or cosmetics, then lot control is necessary for regulatory compliance. The Food and Drug Administration (FDA) requires you to track the movements of these goods so that, in case of contamination, you can stop the affected products from being shipped to a retailer.

How Does Lot Tracking Work?

Lot tracking involves affixing the same barcodes to all the boxes of the same product that arrived in the same shipment. You can use it for raw materials as well as for food items that are ready to go to the retail supermarket or be delivered to customers. For example, all of the bags of flour that arrived from Kansas on April 1 get the same lot number, but a different lot number goes on all the boxes of frozen french fries that arrived from Idaho on April 2. This way, people will know that all of the items with the same lot number are like each other and unlike merchandise with a different lot number.

Why Is Lot Tracking Important to Inventory Management?

The biggest reason lot tracking is important is quality control. If there are defects or issues with contamination, you will know to discard all the items with the same lot number, or at least, to inspect them more closely. You will also know that the things with different lot numbers are not affected. You can notify the vendor of the issue that arose with the stock that you bought from them. This way, the vendor can find a solution, notify other distributors, and find the root cause of the problem. You can protect not only your own professional reputation but also customer satisfaction and safety.

Benefits of Lot Tracking

Lot tracking can offer insights into sales trends, demands, procurement, and transportation logistics. It can also help your employees find the raw materials they need to use in the manufacturing process. The visibility of lot numbers makes the production process go more quickly and reduces landing costs. Finally, if some units in a certain batch of items were contaminated, you can know to look for other contaminated items among boxes with the same lot number, although you should also test other batches to ensure that the contamination has not spread.

Eliminate Human Error

Using inventory management software for lot reporting has great business benefits. Your employees can rely on the lot reports generated by the software and use them as a guide. They can also communicate online with each other, with you, the warehouse manager, and with the manufacturer, if they notice any defects or contamination in the raw materials or merchandise. This error-proof system is essential when you are selling food ingredients or chemical cleaning supplies, but it is also helpful with other items, such as T-shirt sets or paper goods.

Have a Full Supply Chain Overview

Lot tracking enables companies to see the big picture. There are so many requirements and moving parts in supply chain logistics that it is easy for defective parts to end up in retail products all over the country or the world before the manufacturers can mount a response. If you know which group of items was affected, you can quickly notify everyone involved in the supply chain and address the problem before it causes more issues and before multiple companies suffer heavy financial losses.

Get Specific Data of Product Lots

Defects and safety recalls are only one reason that lot management is useful. Lot tracking lets you know how well certain materials and items are performing. You can find out how quickly certain items sell out. This can let you know how often to reorder so that you don’t have to deal with products expiring and can also help you avoid delays resulting from your warehouse running out of the item.

Which Products Need Lot Tracking?

All products regulated by the FDA need lot tracking. This includes foods, beverages, cosmetics and personal care products, pharmaceutical drugs, and household cleaners. Some electronics also require lot tracking, especially if some of their components have an expiration date.

Lot Tracking Best Practices

No matter how you approach lot tracking, the fact that you are doing it at all has noticeable business benefits. Relying on automation in your lot tracking process can help you save time and reduce the risk of human error.

Use Barcode Scanning

You should use barcode scanning when determining the lot number of an item. It is much faster than entering the lot number manually. You also reduce the risk that employees will type the number incorrectly.

Lot Adhering

Using lot adhering will make the lot tracking process go much more quickly. It will also help your warehouse use its space more efficiently, thereby helping you save money.

Store Your Lots Wisely

ERP or inventory management software can help you make decisions about which lots to store where. Implementing lot management, by nature, takes up space, but you can come up with solutions to use your warehouse space efficiently. Employees can use a map or table to keep track of which lots are where.

Fulfillment by Lot

Lot tracking makes the fulfillment process much faster and more accurate. When assigning which orders to fulfill when and which employees should fulfill them, the lot numbers provide useful guidelines.

Use Lot Tracking Software

Lot tracking software facilitates communication among employees in the same warehouse. It also enables managers of different warehouses to communicate with each other about supply chain issues and defects associated with certain lots.

Have a Strategy for Short-Dated Items

Implementing a lot tracking system in your warehouse takes time and work. It may not be practical to do it for your entire inventory. You should prioritize the items with the shortest shelf life.

Key Takeaways

Lot tracking is important for FDA compliance as well as for reducing waste and generally operating your warehouse more efficiently. Warehouses should use lot tracking on perishable food items and other products subject to FDA regulation.

Lot Tracking FAQs

These are some common questions that warehouse managers ask about lot tracking.

What Is Lot Tracking in Manufacturing?

Lot tracking is when you assign a code, called the lot number, to each batch of a particular item that was produced on a certain date. This way, you can keep track of where it is in case of defects or recalls and prioritize shipping it before it expires.

What Are the Benefits of Lot Traceability in Manufacturing?

Lot traceability enables you to comply with safety recalls, thereby avoiding product liability lawsuits. It also enables you to know which products will expire the soonest, so you can ship them to consumers in time.

What Is the Purpose of Lot Number?

The lot number lets you know what kind of item the product is, when and where it was produced, and when it will expire.

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