What to Know About Lot Tracking for Inventory Management

Lot tracking is what allows each item to be tracked as it moves from point A to point B. In this article, we will dive into lot tracking and traceability for manufacturing and inventory.

By:
Rob Tillman
eCommerce Strategy
Outsourcing
eCommerce Fulfillment
inventory management software - Rakuten Super Logistics

The eCommerce supply chain has many moving pieces. From manufacturing products to shipping them to the warehouse and finally into the hands of the customer, there are a lot of moving parts. A proper inventory management system helps keep track of all of the items, but sometimes going one step further can help improve your business operations and the end-user experience. Whether you are a B2B company or a B2C retailer, having a good handle on your inventory by overseeing stock-keeping units is critical.

A term that many business owners may have heard but do not fully understand is “lot tracking.” This term helps to ensure a smooth process through the warehouse. Lot tracking allows each item to be tracked as it moves from point A to point B. In this article, we will go a little deeper into lot tracking and traceability for manufacturing and inventory so that you can understand what it means for your business.

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What is a Lot in Inventory?

It may seem like a simple concept, but the idea of lot control in inventory can actually be complex. A lot is simply a specific batch of an item received and is currently being stored or shipped from a warehouse. Lots may include raw materials, intermediates, or finished goods where batch tracking is used to track product lots properly.

Depending on the item, what a lot actually is can vary, and the number of items in a lot can be different too. For example, if you sell granola bars, a lot may be the bars or boxes of those bars that expire on a specific day. If you sell yarn or thread, the lot will probably be based on the groups of a certain color that were dyed together.

Specialized lot tracking software and logistics expertise help to make lot tracking easier. This inventory management software allows companies to keep track of their items, which customers received which batch, and when they were received by both the company and the customer. Essentially, it gives you the full view of your products’ lifespan, when and where they were created, and where they went from your warehouse. This type of information is not something thought about every day for many businesses. Having an expert in lot tracking can make the whole process easier and more accessible for businesses that need the service.

What is Lot Tracking in Manufacturing?

In manufacturing, lot tracking refers to tracing a group of products back to a specific manufacturer or supplier. In inventory, the lot tracking process is used to organize inventory by expiration dates, the production date, or another specification.

Most products and businesses can benefit from lot tracking in some capacity. However, each lot needs to be stored separately so it can be tracked more easily. For some products, though, lot tracking is essential. Any FDA-approved product is required to use a lot tracking system, which does not just include medications. Some additional products that are FDA-regulated that must be lot tracked include:

  • Food and beverage
  • Household cleaners
  • Certain electronic devices
  • Vitamins and supplements
  • Medical and pharmaceutical products
  • Cosmetics

What is Lot Tracking and Traceability?

Lot tracking is a best practice used in many warehouses to organize and store eCommerce inventory. Lot tracking ensures quality control, traceability, and efficient, successful fulfillment. It makes it easier for warehouses and businesses to keep track of products that may be approaching an expiration date. It also helps make it easy to use the first in first out (FIFO) method, which reduces the chance that products go bad before they reach the customer.

Lot tracking and traceability allow businesses or manufacturers to assign identification labels to products, giving the business and the warehouse the ability to track the lot throughout the supply chain. This label allows the warehouse to scan and store product information, including the location in the warehouse and when it was received so that all of the necessary information is at their fingertips.

Lot tracking allows for the ability to track items from the beginning of the supply chain all the way to the end. It often starts with the supplier who sends raw materials, through the manufacturing process and all the way to distribution and shipment.

Why is Lot Tracking Important?

Recalls

Lot tracking allows manufacturers, retailers, and warehouses to track, fulfill by expiration, and recall product lots when needed. Because the federal government in the U.S. orders more than 1,000 product recalls each year, accurately tracking lots is critical. Lot tracking helps improve the health and sustainability of businesses to keep producing products even with the chance of a product recall, knowing they will be able to correct any issues.

When products are manufactured and entered into a lot tracking system, their unique lot numbers are used by warehouses and tracked even after the product is out the door to the customer. In the event of a recall issued from any government agency, product lots are easily tracked to customers, who can be notified of the recall.

Product Data

Aside from recalls, lot tracking helps to improve inventory management. It allows businesses and warehouses to know exactly where items are and how many of each batch are left. This way, items can be sold and packaged in the order of expiration date, so nothing goes bad on the warehouse shelves.

It can also help when getting a large number of returns from the same lot. You will be able to pull up the data on the products in that lot and investigate any potential issues that customers may be experiencing.

Order Accuracy

Human error is inevitable. However, with lot tracking, you can improve your order accuracy. It removes the need for manual inventory management, reducing errors that often happen during picking where an expired item gets sent out. You will be able to move inventory easily and more quickly by reducing the number of expired items on the shelves.

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Rakuten Uses Lot Tracking to Improve Inventory Management

If you are ready to take your inventory management to the next level, Rakuten Super Logistics can help. We offer lot tracking services so that you can get the full picture of your products' supply chain. From beginning to end, lot tracking helps you know where your products are and when they may need to be pulled from the shelves. By partnering with Rakuten Super Logistics for your logistics needs, you can gain higher-order accuracy, happier customers, and more time to focus on your business. Contact us today to get a quote and learn more about how lot tracking can work for you.

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Rakuten Super Logistics is a leading eCommerce order fulfillment company that provides the scalability, flexibility, and cost savings retailers demand.

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