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Managing supply chains is not without logistical complexities. Problems like lost packages, delayed timeframes, and issues with last-mile delivery crop up more frequently than you would like them to. As a result, there is a need for both predictability and flexibility in your supply chain.
You need information about the supply chain to be able to plan ahead. You need information about the timeline for delivery and where your product is at in the supply chain so that you can act accordingly. This is often accomplished through lot tracking and lot control.
Lot tracking not only helps with the logistical information but also ensures that you always know who is responsible for which shipment and the timeline for when it will reach its recipient.
This detailed guide on lot tracking will cover:
- What is lot tracking?
- What is lot control?
- Which items are typically assigned lot numbers?
- Lot tracking vs. Serial tracking: what’s the difference?
- Lot numbers vs. Stock keeping units (SKUs): what’s the difference?
- What are the two types of lot tracking?
- Which products require lot tracking?
- What are the benefits of lot tracking?
- What are the best practices in lot tracking?
- How does lot tracking work?
- What to look for in an inventory management platform?
Let’s dive into it.
What is lot tracking?
This retail sector uses lots to control inventory. A lot is a group of products with a shared lot number that is managed independently in inventory. All items in a lot share a manufacture date, production variation, expiration date and other information. This allows for easy management and control over the items within the lot, as well as easy tracking of their location. The most common type of lot tracking is based on manual tracking based on serial numbers, but some advanced systems use barcodes or RFID tags.
Lot tracking keeps track of goods from purchase to its sale or returns using lot numbers. These lot numbers are usually located in the top right-hand corner of any product’s packaging, and it helps you keep track of packages during shipping.
A few things worth noting about lot tracking:
- It’s an approximate process based on the timeframe for delivery and how many orders have been fulfilled so far in relation to total orders received.
- Lots get assigned numbers before they leave the warehouse and are tracked during transit to the customer.
- The number of lots assigned to an order is based on numerous factors; these include how many items are in the order when the order was placed, and the current time.
What is lot control?
Lot control is a process of managing the shipping inventory from the time it’s shipped until it’s delivered and covers all aspects of physical handling and recording of goods in transit.
It is a vital part of logistics management and ensures that goods are moved from one place to another in a safe and efficient manner. Lot control can include any or all of the following:
- Inspecting goods for damage, quality, and condition before loading.
- Recording the weight and dimensions of each shipment with a scale.
- Tracking shipments by using barcodes or RFID tags.
- Checking for compliance with government regulations.
- Inspecting shipments at customs.
Which items are typically assigned lot numbers?
Lot numbers are typically assigned to items that have been made in large quantities. This way, you can be sure that if you are receiving an item from a specific lot, it was produced by a specific manufacturer at or before the given date.
The lot numbers are used for quality control purposes as well as for tracking inventory. They also help with identifying counterfeit items so that they can be removed from circulation and replaced with original ones.
Lot numbers are also used in the distribution of products with expiration dates. For example, medical supplies or vitamins and supplements. These lot numbers signify a specific unit or batch and can then be used to determine whether any items have been sold or not and in what quantity.
Lot tracking vs. Serial tracking: what’s the difference?
Lot tracking and serial tracking have different purposes in inventory management.
- Lot numbers, or batch numbers, are used to identify a particular batch, while serial numbers identify individual items inside that batch.
- Lot tracking is a process that tracks the movement of large batches of goods, while serial tracking is an approach to inventory management that involves keeping track of individual units.
- Lot trackers are used for managing items that are in stock, while serial trackers are used for managing items that need to be tracked as they move through the supply chain from raw materials to finished goods.
- Lot tracking can be more cost-effective than serial tracking, as it has lower overhead costs and is less labour-intensive.
Lot numbers vs. Stock keeping units (SKUs): what’s the difference?
Lot numbers are not the only identifiers used for tracking and traceability purposes — there are stock-keeping units, too. While they perform similar functions, they are not the same. Lot numbers are different from stock keeping units (SKUs), and here is how:
- Lot numbers are used for products in manufacturing, while SKUs are used for retail items.
- A lot number is a number assigned to a batch of goods that has been manufactured by the same manufacturer. An SKU is a unique identifier given to an individual item in inventory.
- Lot numbers are used to track the production of each batch and identify any problems with the goods. While SKUs are typically assigned by the store when it’s put on the shelves, and it may include information such as size, color, style, or brand name.
What are the two types of lot tracking?
- Manual tracking
This type of lot tracking is done manually by the company’s employees or a third-party company that they hire to keep track of their inventory on a daily basis. In this type, all data such as production and shipping dates, cost, etc., is taken care of by them.
- Automatic Tracking
This type of lot tracking uses sensors that can sense movement and location to automatically update the system about where the merchandise is located at any given time.
Lot tracking further comes in two forms:
- Tracking forward: Look ahead and follow the inbound ingredients through the manufacturing process to the finished product.
- Tracking backward: You can trace back from the lot number of a finished product to discover the specific ingredients, quantities, and lot numbers that went into making that product.
Which products require lot tracking?
Identifying batches of products is important in industries that mass produce goods. The shelf life for a product is determined by where it is stored, the units that make up the batch, and the condition of the item upon delivery. Lot codes help determine which products belong to a specific group, and their conditions are considered at risk if they are stored improperly.
Having a lot code can help you streamline your inventory and storage. You can easily assign the same number to a group of related products and store them together for easy identification. Retailers also often use lot tracking, as do manufacturers and distributors, to identify products that are part of a particular order or shipment.
The FDA and similar regulatory bodies require some retailers to track their lots for various reasons.
- Quality assurance
Quality assurance is a critical part of manufacturing and shipping. As a result, companies typically must ensure that each batch of products meets their standards by tracking how many of the items have been delivered to the customer. If a lot is not delivered or goes missing, then it can be traced back to the error and rectify it.
- Legal regulations
There are two types of lot tracking standards: local and state. Local standards may apply to any industry, but state-level standards are more typically found in the construction industry. It is important for a company to be aware of these varying lot tracking regulations to keep on track and avoid any potential fines or legal penalties.
Recalls can be difficult to manage, especially when you have a large number of products that are sold in different stores. If you use lot numbers, you can easily identify which products were affected by the recall and remove them from your shelves.
These requirements vary depending on the type of product and the risk level associated with it. Lot tracking and inventory management are crucial for companies selling:
Medical supply companies need to keep track of the inventory they have on hand. This inventory is essential for medical distribution and customer service. Keeping a record of where those supplies are in your warehouse will help you make sure that you have everything you need. Lot tracking also helps track of expiration dates.
Food and beverages
In order to maintain food safety and prevent waste, companies are mandated to use lot tracking system to track their inventory. This system keeps track of which products are on the shelves and how many there are. It can also help reduce errors in the supply chain.
With the use of chemicals in manufacturing, there is a need for companies to track how much raw material is left over. Lot tracking allows them to know when it’s time to reorder and prevent shortages. This process also helps retailers avoid receiving too much stock or having inventory that won’t sell.
Fireworks are arguably the most dangerous consumer product on the market. They are often responsible for a significant number of injuries and fatalities. Fireworks manufacturers are required to maintain diligent records not only during shipping but also during manufacturing to be able to detect who has what and to keep your firework safety zones clear of waste materials.
Most companies know that damaging goods during shipping can be very costly. If a device is dropped, it could lead to broken screens, bent frames, and other critical damage. Lot tracking and lot control reduce the chances of this occurring.
In the cosmetics industry, it is important to track every step of the production process from beginning to end. The use of lot tracking can help ensure that all products are made in a sterile and controlled environment, which reduces the chance of contamination. Lot control during transit further ensures that they are secured packaged and are safe from hazards.
Part 2: What are the benefits of lot tracking?
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