What Are Lot Numbers and How to Use Them?

Lot numbers are unique identifiers assigned to specific batches of products, allowing for traceability and quality control throughout the supply chain. Understanding lot numbers is essential for businesses to ensure product safety, regulatory compliance, efficient inventory management, and effective recall processes.

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Key takeaways

• Lot numbers are unique identifiers used to track specific batches of materials or products. They help manufacturers trace where a batch came from, how it was produced, where it is stored, and where it was shipped.
• Lot numbers, serial numbers, and SKUs serve different purposes. Lot numbers identify batches, serial numbers identify individual units, and SKUs identify product types or variations within an inventory system.
• A useful lot record contains more than just the lot number. It can include supplier batch numbers, production or receipt dates, quantities, expiry dates, storage locations, inspection status, material history, certificates, and shipment records.
• Effective lot tracking depends on consistently recording inventory transactions. Manufacturers should assign lots at receiving or production, record movements and consumption, manage expiry dates, capture quality checks, and record which lots are shipped to customers.
• Lot tracking enables both backward and forward traceability. Backward traceability connects finished products to manufacturing orders, materials, and suppliers, while forward traceability shows which finished products and customers were affected by a particular material or supplier lot.
• Manufacturing software can automate and connect lot tracking across purchasing, production, inventory, quality control, and sales. Features such as FIFO and FEFO allocation, barcode scanning, lot reservations, expiry tracking, labels, and traceability reports make lot control more reliable and efficient.
• Lot numbers support quality control, recalls, inventory management, and regulatory compliance, but software alone does not guarantee them. Physical lots must remain identifiable and employees must consistently record receipts, movements, inspections, production consumption, and shipments.

What are lot numbers?

Lot numbers, also known as lot codes, are unique identifiers assigned to batches of inventory during the manufacturing process or as goods are received in a warehouse. They serve to track and trace products throughout the supply chain and are typically attached as labels to the packaging or containers of the products.

Lot numbers provide valuable information about a specific group of products, including details such as the production date, raw materials used, quality control data, and expiration date. They serve as an identification number for a particular batch, allowing for easy referencing and retrieval of information related to the production and distribution of those products.

The use of lot numbers helps businesses maintain quality control, enable product recalls when necessary, track inventory accurately, and ensure regulatory compliance. They are especially important in industries where traceability and accountability are critical, such as pharmaceuticals, food products, and other sectors where product safety and quality assurance are paramount.

Lot numbers differentiate one batch of products from another, allowing for targeted management of inventory, quality control measures, and efficient tracking of product movements throughout the supply chain. By associating specific information with lot numbers, businesses can quickly identify and address any issues, minimize waste, optimize stock rotation, and ultimately increase customer satisfaction by providing products of consistent quality.

Lot numbers vs. serial numbers vs. SKUs

Lot numbers, serial numbers, and SKUs (Stock Keeping Units) are distinct identifiers used in different contexts within inventory management and product tracking. Here’s a breakdown of their differences:

• Lot numbers. Lot numbers are unique identifiers assigned to a specific batch of products during the manufacturing process. Lot numbers are used to track and trace products throughout the supply chain. They provide information such as the production date, raw materials used, quality control data, and expiration date associated with a particular group of products. Lot numbers are typically utilized for traceability, quality control, and targeted management of inventory within a specific batch.
• Serial numbers. Serial numbers are unique identification numbers assigned to individual units of a product. Each item has its own distinct serial number, enabling precise tracking and differentiation between units within a batch or product line. Serial numbers are often used to trace the history, origin, and warranty status of a specific product unit. They facilitate accurate record-keeping, after-sales service, and identification of individual items in case of issues or recalls.
• SKUs (Stock Keeping Units). SKUs are unique alphanumeric codes or numbers assigned to a specific product within an inventory management system. It serves as an identifier that distinguishes individual products, allowing businesses to track and manage different variations or configurations of the same item. SKUs enable accurate inventory control, streamlined ordering processes, and support pricing strategies by providing a centralized reference point for product identification and management. They facilitate efficient stock management, precise categorization, and data analysis, empowering businesses to make informed decisions regarding inventory restocking, demand forecasting, and product assortment strategies.

In summary, while lot numbers focus on identifying and managing specific product batches, serial numbers identify individual units, and SKUs serve as broader identifiers for product variations in inventory management systems. Each identifier plays a distinct role in tracking, traceability, and inventory control, serving specific purposes within the overall supply chain and product management processes.

What information should be recorded for each lot?

A lot record should contain enough information to identify the goods, determine their current status, and reconstruct their history.

Companies should define which fields are mandatory and who is responsible for recording them. A unique lot number is of little value if movements, consumption, inspection results, or shipments are not recorded consistently.

How to use lot numbers for inventory tracking?

Here is a practical guide to using lot numbers for effective inventory tracking. By following these steps and utilizing lot numbers effectively, you can streamline your inventory management processes, ensure product quality, and maintain traceability throughout your supply chain.

1. Define your lot numbering system

A good lot number must be unique, readable, and suitable for labels, forms, and barcode scanning. Common formats include:

• Sequential: LOT-000184
• Date and production run: 20260915-02
• Product, date, and run: RM42-260915-B
• Automatically generated system identifier: SL-104852

Encoding a production date or plant code in the identifier can help employees recognize a lot. However, the number should not contain information that may change, such as its storage location, inspection status, or remaining quantity. These attributes should be maintained as separate fields in the inventory system.

2. Assign lot numbers during production or when receiving goods

Assign lot numbers to each batch of products during the production process or when receiving goods into stock. This can be done by printing or attaching labels with the lot numbers to the containers or packaging of the products. Incorporate barcode technology for efficient scanning and data capture.

3. Record essential information

Associate important information with each lot number. This may include the production date, expiration date, raw materials used, quality control data, and any other relevant details specific to your industry or product requirements. Maintain a central database or an inventory management software system to store and manage this information.

4. Implement barcode scanning

Utilize barcode scanners to capture lot numbers and track inventory movements accurately. Barcode scanning eliminates manual data entry errors and provides real-time visibility into stock levels, locations, and specific batch details.

5. Track inventory by lot numbers

When receiving new inventory, scan and record the lot numbers along with the quantity received. This allows you to track the specific batches of products in your warehouse. Similarly, when fulfilling orders, scan the lot numbers of the items being shipped to maintain accurate records of outgoing batches.

6. Enable lot number traceability

Leverage lot numbers for end-to-end traceability in your supply chain. Associate lot numbers with the corresponding raw materials used, production dates, quality control checkpoints, and distribution information. This traceability helps identify any issues or recalls and facilitates targeted quality assurance measures.

7. Manage expiration dates and shelf life

For perishable goods, closely monitor expiration dates associated with each lot number. Implement inventory rotation strategies, such as First-In-First-Out (FIFO) or First-Expired-First-Out (FEFO), to ensure that products with shorter shelf lives are used or sold first. This minimizes waste and ensures the delivery of fresh products to customers.

8. Conduct regular quality control checks

Use lot numbers to perform quality control checks on specific batches. Establish quality control checkpoints during the production process, and associate the results with the corresponding lot numbers. Regularly review and analyze quality data to identify any patterns or recurring issues that need to be addressed.

9. Implement lot number-based recalls

In the event of a product recall or quality issue, lot numbers are invaluable for isolating and removing affected batches quickly. With the ability to track specific product batches, you can prevent further distribution of potentially problematic products and protect consumer safety.

10. Leverage software

Consider using advanced inventory management software or an MRP system with lot number tracking capabilities. Such software can automate lot number assignments, provide real-time visibility into stock levels, facilitate seamless integration with barcode scanners, and generate detailed reports for efficient inventory management.

How lot numbers work in manufacturing software

Manufacturing software connects physical lots with purchasing, production, inventory, quality, and sales records. This creates a continuous transaction history rather than a collection of separate spreadsheets.

In MRPeasy, a new internal stock lot is normally created whenever materials are received through a purchase order or products are completed through a manufacturing order. Separate deliveries from the same supplier batch may therefore create separate internal stock lots. The supplier’s original batch number can be included in the stock lot number or stored in a custom field.

Each stock lot can contain its cost, expiry date, storage location, notes, files, and certificates. If Quality Control is enabled, received goods can remain on hold until they are inspected. Approved quantities can be released while rejected quantities remain unavailable.

When materials are required for production, MRPeasy can propose specific stock lots according to FIFO or FEFO. A booking reserves quantities from those lots for a manufacturing order and prevents the same inventory from being allocated elsewhere. Workers can then see the required lot numbers, quantities, and storage locations when picking materials.

Completing the manufacturing order creates a finished goods stock lot connected to the material lots consumed during production. When products are booked and shipped to a customer, the system records which finished stock lots were supplied.

This enables two-way traceability:

• Backward traceability: Finished lot → manufacturing order → consumed material lots → purchase orders and suppliers.
• Forward traceability: Supplier or material lot → manufacturing orders → finished lots → shipments and customers.

Stock lot labels can be printed for a whole lot or for the quantity stored at a particular location. When the Barcode System is enabled, labels can include a unique barcode for faster identification and transaction reporting.

Manufacturing software supports compliance by maintaining accessible and consistent records. It does not guarantee compliance on its own: the system must be configured correctly, physical lots must remain identifiable, and employees must record receipts, movements, consumption, inspections, and shipments consistently.

Frequently asked questions

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