Lot tracking and traceability is a key best practice in inventory management. In fact, enabling lot control is one of the first things we recommend to new users of the Datacor enterprise resource planning (ERP) system.
In this guide, you’ll learn about lot tracking and traceability and why it’s so important to chemical and process manufacturers. You’ll also learn how Datacor ERP can help you maximize the benefits of this functionality to gain greater insight into, and control over, your inventory.
Here’s what we’ll cover:
- What is lot tracking and traceability?
- Lot tracking and traceability in inventory management
- Key considerations for chemical and process manufacturers
- Benefits of lot tracking and traceability software
What is lot tracking and traceability?
Lot tracking and traceability allows users to assign identification labels to production runs called “lots,” which can be tracked throughout the supply chain. These may include raw materials, intermediates or finished goods.
The ID labels allow companies to scan and store information about the material, including its location in the warehouse, when it was received, who the supplier is and when it was purchased.
The term “cradle-to-grave” traceability refers to the ability to track lots from the beginning to end of the supply chain: starting with the supplier who sends the raw materials, moving through the manufacturing process, and all the way to distribution and sale, when the finished product reaches end customers.
Lot tracking and traceability in inventory management
Effective warehouse management starts with lot tracking and traceability, and it begins the moment materials are received. When used in conjunction with wireless barcoding, this functionality enables strategic decision-making, providing full, real-time visibility into your inventory.
Datacor ERP supports these capabilities in one integrated system, giving you full control down to the lot number. It offers the specialized tools chemical and process manufacturers need to handle their unique chemical inventory management requirements.
Bin location functionality allows you to label and barcode every spot in your warehouse according to a common naming convention (for example, “Aisle 1, Level 1” on a pallet rack). Using wireless barcoding, you can scan each spot for a 360-degree view of your inventory.
Lot control is critical when storing finished products, too, allowing you to take advantage of Datacor’s integrated quality management module. It allows you to track which tests need to be run on which products, as well as whether the results meet specifications for the given lot.
Most lot numbers have dates embedded within the code, sometimes using characters or letters to represent different months. This allows manufacturers to determine manufacturing date simply by looking at the lot number, so they can easily track shelf life. Datacor ERP allows you to manually enter a lot number, use a sequential number or automatically generate one with a variety of Julian Date algorithms.
Location control vastly improves efficiency when counting inventory, whether it’s daily cycles or quarterly or annual counts. If you already know the location of each item and what you expect to find in each bin, you can quickly and easily scan barcodes, track variances and update accordingly.
Key considerations for chemical and process manufacturers
ERP software that supports lot tracking and traceability for the chemical and process manufacturing industry allows you to track safety and quality documents along with your raw materials, such as certificates of analysis (COAs). Datacor ERP allows you to track those documents at the lot level.
Lot control for raw materials also enables first in, first out (FIFO) and FEFO (first expired, first out) inventory tracking:
- FIFO tracking means the oldest lot is used first, so you’re cycling your inventory. This also helps age your inventory to track products you’ve had for a long time, which can indicate overbuying (and help you adjust future ordering).
- FEFO tracking means the first lot to expire is used first. It’s possible that some of the material you receive later may have a nearer expiration date, whether due to a shorter shelf life or an out-of-order shipment.
Datacor ERP has functionality to automatically select the first lots to expire as well as the oldest inventory to ensure maximum utilization and prevent waste.
Lot tracking and traceability functionality is especially important for manufacturers that produce food, consumable and personal care products. Both the ingredients and finished products have shelf life and expiration concerns, which make lot tracking and traceability crucial.
Most importantly, these products also contain ingredients that need to be traced down to the lot number in the event of a recall or other safety issue. The U.S. Food and Drug Administration (FDA) requires cradle-to-grave lot traceability for any product that goes into the food supply chain, as well as nutraceuticals and personal care products, such as shampoo or soap.
In an FDA audit, manufacturers will be forced to do a mock recall. In a mock recall, the FDA representative will choose a random lot number and give you a short window of time, normally two hours, to provide all the information you can about the material and notify every customer that received the lot that their product needs to be recalled.
You probably won’t make your deadline if you’re digging through a file cabinet or wandering around your warehouse trying to track the information down. But with specialized software such as Datacor ERP, you can simply type in the lot number and get a full list of customers, even if it’s a raw material that was used in 100 different production runs and sold to 1,000 different customers.
It even handles nested lots: In other words, if “RM Lot A” is used in three different products — producing FG1, FG2 and FG3 — the lot-tracing capability will identify every customer that purchased any of the finished goods that contained “RM Lot A.” In minutes, you can create a lot-recall letter and instantly send it to everyone, ensuring customer safety and compliance with FDA regulations.
Benefits of lot tracking and traceability
Lot tracking and traceability helps you more accurately track what’s going on in your business and unlock the full potential of your ERP software. Some of the key benefits include:
- Increased efficiency: No more lost time wandering through warehouses wondering where you put an item or ingredient. Lot tracking gives you a snapshot of your entire inventory, updated in real time. This helps with manufacturing as well as inventory counts.
- Reduced waste: FIFO and FEFO tracking ensure you sell your oldest and closest to expiring products first, so you don’t have products that expire or sit in your warehouse too long.
- Enhanced health and safety: Attaching important documentation such as COAs to raw materials helps ensure safety in manufacturing and distribution, while enabling rapid response to product and ingredient recalls.
- Inbound and outbound quality testing: Datacor ERP allows you to attach COAs and quality documents at the lowest level,, so you can run quality tests on inbound raw materials and address shelf life or expiration concerns. This also allows you to easily track the tests and results of finished products.
- FDA compliance: No need to fear the FDA inspector’s visit; Datacor ERP allows you to instantly pull customer information for every material and generate lot-recall letters in minutes, helping you avoid costly compliance fees while keeping customers safe.
- Better business decisions: Streamlining key operations functions and enhancing visibility and communication enables better business decisions, which in turn helps increase profitability. That’s what Datacor ERP was designed to do.
- Specialized functionality: Our software was built with chemical and process manufacturers in mind, and it offers functionality as unique as your needs, informed by our three decades of experience in the industry and ensuring you stay up to date.
Want to see how Datacor ERP can enhance your inventory management? Sign up for a free demo with one of our industry experts.