What is Lot Control?

Why Lot Numbers are Important to Fulfillment Operations

The growth of ecommerce and global supply chains has made managing diverse inventory and modern fulfillment logistics more complex than ever for businesses. When it comes to good inventory management, warehouse operations are expected to be able to handle it all – including lot control.

But what is lot control, and why is it so important to successful inventory management? To answer that question, it’s important to understand what a lot number is, the reason why certain types of products require lot batch numbers and how warehouses use them to improve inventory accuracy and traceability.

In this article, we’ll discuss lot numbers and the importance of lot tracking, as well as how warehouse management systems (WMS) and smart inventory management can be used to optimize lot control.

Key Takeaways

• In the context of warehousing, a “lot” refers to a group or batch of products that are handled, stored and managed together as a single unit.
• By organizing products by lots, warehouses can track and manage stock more effectively, as well as retrieve items for distribution, perform quality control checks and remove recalled items with greater ease.
• Lot control requires the use of robust inventory management systems, smart putaway and picking strategies, and investing in technology solutions such as barcode or RFID systems.
• Using smart automation rules and connected ecommerce features, a WMS can ensure that lot-related processes are all conducted for optimum efficiency.
• Meticulous lot management optimizes warehouse operations, reduces operational costs, and enhances customer satisfaction by ensuring timely and accurate deliveries of safe products.

What is Lot Referring to in Warehousing?

In the context of warehousing, a “lot” refers to a group or batch of products that are treated as a single unit. Products in a lot present the same manufacturing date and batch number, and are subsequently handled, stored and managed together.

Regardless of whether lot items are components for another product or finished products themselves, they share the same type, model, class, size, composition and functionality. Since lot items are grown or produced under the same conditions, they have uniform characteristics and qualities as the other items in their lot. This means that if there is an issue with any item in a lot, the same problem is likely to arise with all the other items within that lot.

What is a lot number?

Lot items bear the same lot number to make it easy to identify items from the same group and manage them accordingly. Also referred to as “lot codes” or “batch numbers,” these supply chain identifiers are typically found on packaging of products as a combination of letters and numbers or a barcode.

Some common items frequently associated with lot numbers, include:

• Foods (including fresh produce and packaged foods)
• Medical supplies, as well as medications, vitamins, supplements and health-related remedies
• Hygiene products (e.g. toothpaste, shampoo, lotions, etc.)
• Chemicals (e.g.  household cleaning products, detergents, aerosol sprays, insecticides, pest control products, etc.)
• Electronics (e.g. smartphones, computers, etc.)
• Vehicle and machinery parts
• Batteries
• Fire extinguishers
• Toys and baby products
• Building materials, fabrics, paints, and dyes
• Fireworks

Tracking lot numbers has become crucial to modern warehousing because it enables efficient inventory management and traceability for regulatory compliance. Tracking these types of items matters more than other types of stock because they carry specific lifecycles, risks and stricter regulation requirements than other forms of inventory.

For insight on the differences between lot numbers, SKUs, and serial numbers, check out Logiwa’s blog, “What is a Lot Number?”

What is a Lot Number Used for?

The importance of lots and lot tracking is multifaceted. First and foremost, it facilitates accurate inventory control and visibility. Lot numbers not only allow products with similar attributes to be stored together and retrieved for distribution – they also provide a way of tracking stock levels, which can aid demand forecasting, replenishment planning, and the prevention of stockouts or overstock.

Additionally, lots play a pivotal role in quality control and compliance, especially in industries like pharmaceuticals and food. In these types of industries, products must adhere to specific regulations. If a product recall arises, having well-defined lots can expedite the identification and removal of affected items, minimizing potential risks to consumers and protecting the reputations of both brands and warehouse operations.

Furthermore, lots contribute to efficient order fulfillment. When customers place orders for specific products, warehouses can easily locate and pick items using lot numbers as part of their inventory management system, reducing the time and effort required for picking and packing. This level of organization also enhances accuracy in order fulfillment, minimizing the chances of shipping incorrect or expired products.

What is Lot Number Control?

Lot control is a vital aspect of warehouse management that involves monitoring and maintaining the inventory based on distinct lots. This is vital for warehouses overseeing products with specific expiration dates, batch numbers, or production dates. Lot control ensures these items are grouped together and managed as distinct units, allowing items to be appropriately stored and efficiently tracked, traced and managed throughout the supply chain.

Lot control enhances quality control, minimizes the risk of expired or defective products reaching customers, and facilitates compliance with industry regulations.

Lot Control Strategies

Warehouse operators can employ several strategies to enhance lot control and optimize warehouse operations. Firstly, it is essential to implement a robust inventory management system. A top-tier inventory management system is capable of recording and tracking all relevant information associated with individual lots, including production date, batch number, and expiration date. Leveraging this type of solution allows for real-time updates on inventory levels, movements, and status changes. It also supports accurate decision-making.

Another key strategy in improving lot control is employing smart putaway and picking approaches. Using a first-in, first-out (FIFO) or first-expired, first-out (FEFO) approach ensures that products with the closest expiration dates or production dates are selected and dispatched first. This minimizes the risk of products becoming obsolete or expiring while sitting in the warehouse. Additionally, organizing the physical layout of the warehouse to facilitate easy access and separation of different lots can streamline picking processes and reduce the likelihood of errors.

Lastly, investing in technology solutions such as barcode or RFID systems can greatly enhance lot control. These technologies enable quick and accurate identification of products and lots during inbound and outbound warehouse processes, from receiving to shipping. Barcode scanning or RFID tagging can eliminate manual data entry errors and expedite the tracking process. Integrating these technologies with the inventory management system can provide real-time visibility into lot information, enabling warehouse operators to make informed decisions about inventory replenishment, storage allocation, and order fulfillment. 

Using Warehouse Management Systems (WMS) to Aid Lot Control

Lot control is imperative for maintaining product quality, complying with regulations, and optimizing operational efficiency. By implementing advanced inventory systems, employing efficient picking strategies, and harnessing technology solutions, warehouses can enhance their lot control. Warehouse management systems (WMS) makes it even easier.

WMS solutions enhance lot control by offering heightened levels of configurability around inventory and warehouse process management. For example, a WMS can be used to conduct cyclical inventory counting, which continuously tracks stock level, while monitoring incoming ecommerce orders. This offers a significant advantage for items with sell-by dates because it improves inventory accuracy and ensures inbound and outbound operations prioritize items with a shorter shelf-life first.

Meticulous lot management optimizes warehouse operations, reduces operational costs, and enhances customer satisfaction by ensuring timely and accurate deliveries of safe products. Using smart automation rules and connected ecommerce features, a WMS can ensure that lot-related processes are all conducted for optimum efficiency.

Discover how Logiwa’s WMS can help your fulfillment operations get the most from lot control—schedule your free demo today.

FAQs Related to “What is a lot number?”

What is lot number in warehouse operations?

A lot number is an identifier made up of letters and numbers (sometimes in the form of a barcode) found on products to show it is part of a specific manufacturing batch within a supply chain. Items sharing a lot number are manufactured under the same circumstances, and can therefore be handled as a single group.

Why are lot numbers important?

Tracking lot numbers has become crucial to modern warehousing because it enables efficient inventory management and traceability for regulatory compliance. For example, if a lot number is going to expire soon, all items with that lot number can be sold before a batch with a later expiration date. As another example, if a lot is recalled due to a malfunction or identifiable risk, all items from the same lot can be removed from inventory.

How do warehouse management systems (WMS) solutions track lot numbers?

WMS solutions track lot numbers using integrated technologies and smart inventory management. Using barcode scanners, RFID technology and other tracking tools, warehouses can optimize inventory allocation, manage inventory levels, and monitor lots with high levels of visibility and accuracy.

What is the difference between lot numbers and SKUs?

Both are used for item identification, tracking, and traceability. However, SKUs identify a distinct type of item and include attributes that distinguish it from others of its kind. That might include the manufacturer, description, material, size, options, version, color, packaging, and warranty terms. Lot numbers focus on tracking inventory batches that have identical makeups, and are often treated as a single product – as opposed to being counted as individual items.

What’s the difference between lot numbers and serial numbers?

Lot batch numbers and serial numbers are both used to identify inventory items and track products throughout a supply chain. However, many items can share the same lot number, while each serial number is unique to a single product. Lot numbers mark batches of items that were manufactured at the same time, while serial numbers distinguish single items from all others (even those of the same type).