Traceability and why it's important for your business

5/11/2020

If you don’t have a clear idea on what Batch Tracking is and how it can help your business then this article is for you. We’ll explain the basics of Batch Tracking, what it is, and why it is crucial for your business. We’ll also cover Serial Numbers and how they are different from Batch Numbers. Finally, we’ll show you how you can improve the way you track goods within your distribution or wholesale company.

Batch traceability 101

Serial number 101

Last tips to broaden your understanding

How automation is key to traceability

BATCH TRACEABILITY 101

Batch tracking is a smart way to quickly identify and trace the batches of goods that you manufacture, distribute and sell.

It’s a simple way to optimize the management of your supply chain and keep on top of quality control.

If your business deals in the production, distribution or the sale of manufactured goods or prepared foods, you need to have a batch tracking system in place. Batch tracking enables you to quickly identify and locate goods in storage, during shipment, in stores or in the possession of consumers.

WHAT IS BATCH TRACKING

When goods are manufactured or assembled, they are produced in batches (or lots) at a specific assembly plant, on a specific date, with the same materials and an expiry date for perishable goods.

Batch tracking enables you to easily track and access information about a batch of products, from the supply chain right through to the point of sale.

5 Reasons For Product Tracing

Batch and serial numbers play a key role in the quality control process and enable you to respond swiftly and efficiently in the following situations:

1. Improved quality control

  • Tracing defective batches of goods
  • Triangulating defective raw materials and parts within your supply chain
  • Issuing product recalls to customers and consumers for specific batches of goods sold
  • Ensuring products are strategically shipped or sold according to expiry dates to avoid spoilage and waste

2. Improved regulatory compliance

  • A robust batch tracking system may be required by law depending on what and where you are marketing your product

3. Enhanced Security

  • Serial numbers are indispensable when dealing with warranty claims, and stolen or forged goods

4. Improved Customer Relations

  • Linking Warranty information to Serial Numbers helps protect your business, your customers and consumers in the event of the need to replace or repair products

5. Faster and more accurate product and batch tracking

  • Automated tracking systems speed up the product tracing process and are more accurate than manual methods which can lead to costly errors

WHAT WE MEAN WHEN WE USE THE WORD ‘PRODUCT’ IN THIS ARTICLE

The word ‘product’ can mean many things. In this article, when you see the word ‘product,’ we mean single unit, not a product line or batch of units.

Understanding Batch Numbers

Batch numbers are issued when a group of products are manufactured at the same time. If, at a later date, there is a problem with the quality of the product, the batch number can be used to track down the source of the issue and you can correct the problem. Other products manufactured on the same day, with the same raw materials can be easily traced and recalled.

Lot numbers illustration

INDUSTRIES WHICH RELY ON BATCH TRACKING

Batch tracking is especially important in the event of product recalls and the efficient management of expiry dates.

It is not just dairy products that go bad over time. All products derived from organic materials (including rubber, plastics and paints) will degrade over time and their expiry dates must be carefully monitored using Batch tracking to ensure the quality of the product and the safety of consumers.

EXAMPLES OF PRODUCTS MADE FROM ORGANIC MATERIALS

HOME & DECOR
•     Paints and stains
•     Filters for respiratory masks
•     Fire extinguishers
•     Mattresses and furnishings made from plant-based foam

HEALTH AND WELLNESS
•     Prescription medicine
•     Supplements
•     Lotions
•     Personal Protective Equipment (PPE)

FOOD
•     Baked goods
•     Chocolates and sweets
•     Canned meats and vegetables
•     Condiments
•     Dairy products (Butter and Cheese)
•     Fresh fruit and vegetables,
•     Frozen food

BEVERAGES
•     Bottled water, sodas, fruit juice and milk
•     Coffee and teas
•     Beer, wine and hard liquor

ALL OF THE ABOVE PRODUCT TYPES REQUIRE  BATCH TRACKING FOR THE EFFICIENT MONITORING AND MANAGEMENT OF EXPIRY DATES

Products with lot numbers

Manufacturers, wholesalers and distributors rely on batch tracking when they need to quickly trace and recall goods they wish to remove from the market. No business wants to pull a product from the market, but it is one of the realities of doing business.

Situations where batch tracking is indispensable

Here are some common, real-world reasons for removing a product batch from the market:

Contaminated
  • Defective machine or electronic parts, including:

•    Brakes, steering wheels, wipers or headlights
•    Batteries for devices that overheat and catch fire

  • Expired or contaminated food, due to:

•    Aging, unsold stock
•    Improper storage while in transit or in warehouses
•    Salmonella, Botulism or E. Coli
•    Product tampering

  • Expired or contaminated medicine/health and wellness products:

•    Aging, unsold stock
•    Improper storage while in transit or in warehouses
•    Supply chain issues or production errors
•    Newly discovered side effects
•    Product tampering  

  • Expired chemicals and organic-based materials sold to the public (e.g., Paints and PPEs)
  • Shifting regulatory environment

•    New bans on certain chemicals and plastics used in the production and packaging of food, furniture and clothing

As you can see, product recalls and expiry date issues are common in many industries. Good quality control is all about proactively monitoring expiry dates and for defective goods. Such products must be swiftly removed from your distribution network, otherwise spoilage and defective goods can result in:

•    Lost sales
•    Lost customers
•    Damage to the reputation of a brand
•    Lawsuits

Thankfully, automated batch tracking can make all the difference by helping you efficiently manage the above potentially dire scenarios. Batch tracking is good for customer relations, and it’s also good for the reputation of your brand. Batch tracking tools are often included in online inventory management solutions.

HOW DOES BATCH TRACKING WORK?

Batch tracking is used during the manufacturing process to capture essential information about products assembled together (batches or lots) at the same time. Depending on the goods being manufactured, batch tracking records may include these and other production details:

  • Batch (Lot) number, serial number
  • Manufacturing date and time
  • Itemized list of supply line details
  • Facility name and location
  • Quantity of goods produced
  • Weight of active ingredients
  • Best Before Date
  • Provenance of raw materials

Download our Batch Manufacturing Record Template for Free

For each lot of goods produced, a batch number is issued. This number can be used to review, down the road, the entire production history of goods made together. The batch number can be used to track products with a common defect or with the same expiry date and determine the location of the products in question.

A batch number is a powerful tool that can help you track down goods that are about to expire or need to be recalled.

It is important to be able to quickly locate defective products and goods about to expire within your distribution network, which could be at:  

  • Warehouse locations
  • Logistical locations
  • Point of Sale locations
Supply chain

AUTOMATED BATCH RECORD MANAGEMENT = GOOD QUALITY CONTROL

Detailed Batch Records are essential for efficient quality control and can be used as legal evidence in court cases when a company is sued.

SERIAL NUMBERS 101

We’ve looked at the batch (lot) numbers of products and how we use them to track groups of goods manufactured at the same time. Now let’s dive into how we trace individual units using serial numbers. Batch records are only half of the equation.

embossed serial number

WHAT IS A SERIAL NUMBER?

A serial number is a unique identifier for a single unit within a product line. Serial numbers can be formed using a sequential or incremental chain of numbers and/or letters and/or symbols.

Serial numbers are relied on by many industries and have a wide range of uses which we will come to shortly.

Goods with serial numbers

3 Common uses of serial numbers

Serial Numbers are indispensable for the efficient management of:

  1. Product Returns
  2. Warranties of individual goods
  3. Rapid identification and reporting of stolen or counterfeit goods

HOW IS A SERIAL NUMBER DIFFERENT FROM A BATCH NUMBER?

A batch (or lot number) enables us to identify a group of goods produced with the same materials, at the same plant, at the same time; whereas, a serial number is used to identify a single unit using a serial or incremental, alpha-numeric numbering system. Serial numbers help marketers distinguish between identical products and forged products throughout the distribution chain and especially at the point of sale. Detailed serial number record management is essential for the effective management of warranties, returns and maintaining good customer relations.

lot number vs serial number

LAST TIPS TO BROADEN YOUR UNDERSTANDING

WHERE DO BATCH NUMBERS GO ON MY PRODUCT?

Important product information, including everything from serial numbers, to batch (lot) numbers, to expiry dates, often appear next to barcodes.
Serial numbers are often embossed into the metal and plastic structure of the product to protect against the sale of stolen goods.

Be careful, serial or batch numbers can also appear as a barcode to facilitate the product scanning.

Example of product traceability

BATCH AND SERIAL NUMBERS VERSUS BARCODES AND SKU

And now to prevent you from being confused with all the different types of numbers you can find or use in inventory and sales management, let’s try to understand 2 more notions that you need to be familiar with: barcodes and SKUs.

Barcodes are machine-readable and consist of parallel vertical lines of varying widths. They can be used to graphically represent any list of numbers and letters and used to retrieve data about an item.

To confuse matters, UPCs (Universal Product Code) are often also referred to as barcodes. They are administered and sold by GS1 US.

WHAT IS A UPC?

UPCs are numeric codes with 12 digits. UPCs are administered and sold by GS1 US. A UPC code is assigned to a unique product and remains constant throughout the product’s shelf life. The UPC code always stays the same among all retail outlets and are for external use.

But barcodes can also be used to graphically represent SKUs, that you define internally to classify and define your own products.

WHAT IS A SKU NUMBER?

SKU stands for Stock Keeping Unit. It is an internal product inventory coding that identifies all your product features (colour, size, etc.). These codes are unique to your company and allow you to keep track of your inventory easily. They provide many information relative to your products or business: type, color, brand, size…

Product identification numbers summary

To learn more about barcode best practices for distributors and wholesalers, please click here.

HOW AUTOMATION IS KEY TO TRACEABILITY

SPEED AND EFFICIENCY ARE ESSENTIAL WHEN MANAGING AND TRACKING INDIVIDUAL UNITS AND BATCHES OF PRODUCTS IN TODAY’S 24/7 GLOBAL ECONOMY

THE BENEFITS OF AUTOMATING PRODUCT AND BATCH INFORMATION

Using software to create batch and serial numbers is a smart and efficient way for wholesale and distribution businesses to reduce spoilage and manage recalls. Maintaining robust, batch records is also part of the due diligence companies must undertake to comply with regulations and industry standards legal requirements..

5 Reasons automated batch and serial number tracking is superior to the conventional, manual method:

  1. Quicker and easier management of product warranties, recalls, theft and forged goods
  2. Reduced spoilage through automated monitoring of expiry dates
  3. Reduced costs and the risk of litigation through improved safety and quality control
  4. Improved supplier and customer relations by proactively removing expired and defective goods from your distribution network
  5. More accurate monitoring for spoilage and defective goods and reduced risk of human error

Relying on an automated batch and serial number tracking system can even increase revenue: Being compliant with strict batch and serial bumber tracking and quality control requirements allows you to sell your products to larger clients.

Software-based batch record management is not just good for your peace-of-mind, it’s also good for your business.

Two common batch record and serial number workflow

You are probably wondering at what stage you should start generating batch records, serial numbers, so let’s look at two common workflows for wholesalers and distributors. Which batch tracking scenario best applies to your needs?

  1. You purchase and resell goods and need to track and manage pre-existing batch records or serial numbers, or
  2. You manufacture/assemble goods and distribute them to your B2B customers and/or end consumers

You purchase goods with existing batch or serial numbers

To maintain product traceability through the entire supply chain till the end customers, you must record batch or serial numbers from your suppliers into your inventory and order management system.

1. Incoming goods from suppliers

  • [Lot number] For each lot, record into your system the exact quantity of units that you receive
  • [Serial number] Assign serial numbers for each arrived item into your system.
  • If there is an expiry date, make sure to also store it along with each lot.

2. Outbound delivery to customers

  • Select the specific units to send to your client depending on their lot or serial number
  • Assign the specific lot or serial number in your sales document (Sales order and shipping order)
  • Make sure your warehouse send the correct units to your customers

You manufacture your goods

Not every item needs to be tracked with lot or serial numbers. It is quite a heavy work to manage product traceability so make sure to be very organised and to plan ahead.

1. [For lot only] Define your lot size : choose when and how to split each lot. Here are a few rules :

  • Items from a similar lot must have been made with the same machine and team, at the same period, using the same source of raw materials.
  • Larger lots are less expensive and easier to track than multiple smaller lots. However, in case of a recall, a bigger part of the production is impacted.

2. Choose a format for your batch or serial number and stick to it

  • Make sure each batch and serial number is unique
  • It can be a combination of both letters and numbers
  • We recommend to include the date and the initials of the product type so it is easier to identify and to search in your record.

3. Log all details of each lot into a batch tracking record document

4. Label each product with its batch or serial number

  • Choose the appropriate way to label items : print or sticker for less expensive products and embossed numbers for higher value goods
  • You may want to create a barcode for your serial number to facilitate product scanning and reduce errors throughout the supply chain

5. Input stock into your inventory system by assigning quantities to each batch.
 

How can I get started creating and managing serial and batch numbers for the products I sell?

Automated Inventory Management Systems often include features that can help you to manage and trace important product and Batch ID information, throughout the Supply Chain and Sales Order Process. To learn More about the Sales Order Process, please click here.

Consumers, distributors, wholesalers, logistics firms and merchants all rely on automated Inventory Management Systems to quickly find product identification, batch and serial numbers which can be found on most packaging and products.

INVENTORY MANAGEMENT SYSTEMS TO TRACK PRODUCTS

INVENTORY MANAGEMENT SOFTWARE ALLOWS YOU TO CONVENIENTLY TRACK INDIVIDUAL OR BATCHES OF PRODUCTS ACROSS YOUR SUPPLY CHAIN USING SMARTPHONES, TABLETS, SCANNERS OR COMPUTERS

WHAT IS AN INVENTORY MANAGEMENT SYSTEM?

Inventory management used to be done manually and there was a lot of human error involved. Today’s Inventory Management Software enables SMEs to automate and integrate their Sales Order Process.

You can read more about Sales Order Management here.

You may be wondering now, how to store, manage and track this wealth of product information (Batch record information, expiry dates and serial numbers).  

That’s where Inventory Management System software comes into play.

Inventory Management Software comes with advanced product information tracking features that allow SMEs to create batch records, barcode labels and to automatically trace a single product or an entire batch of goods across the globe.

Batch screenshot

Automation is a simple way to speed up and simplify quality control and the tracking of products across your company

Automating your batch and product identification process isn’t as daunting as it sounds. Today’s software solutions are affordable and user-friendly. They make it easy to set up automated tracking.

Automating your product tracking system provides improved integration, troubleshooting, compliance and customer relations.

Everyone within your organization is now able to instantly trace and verify batch numbers, serial numbers, expiry dates and warranty information during customer interactions.  

Automating the product information process also enables you to quickly and efficiently troubleshoot. Imagine being able to instantly track and pull expired or recalled products from the market – thanks to automated, end-to-end tracking of batch records right through to the point of sale (POS).

Automation can even help you sleep better at night. Why? Because improved accuracy and regulatory compliance may reduce the risk of litigation. Nobody wants their brand tarnished by court case.

Improved compliance can even lead to sales growth. By meeting the stringent regulatory compliance requirements of larger corporations, your company will potentially have access to new, highly lucrative markets.

Inventory Management systems, like Erplain, are a smart solution for your business, regardless of whether your business purchases ready-made goods (with existing batch numbers), or you manufacture goods and need to create your own batch numbers for the products you distribute and sell.

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