What is Lot Traceability?

Lot Traceability in ERP is a big focus of what we do as a software company, and a major factor in our customer’s decision to use a Intellect ERP system over our competition. We have experience with a variety of lot codes (serial numbers vs. lot or batch numbers) and a variety of tracking methods (scanning vs. keying vs. writing) so we thought it would make sense to write a little bit about the lot traceability process and how it should ideally work in order to satisfy the pressures of big retail customers, GFSI quality programs and government regulatory bodies. Lot traceability effectively means that you know which supplier lots of product were used in which finished goods, and who received those finished goods. This way, you have a way to track problem products from the customer, all the way back to the supplier who sent the raw materials and the stages in between. There are a variety of ways to do this, including manually on paper, by using spreadsheets, or through the use of an integrated system like Intellect ERP. In any case, some important information must be recorded. 1 Tracking Supplier Lots at Receiving The first important aspect of lot traceability is to keep track of which supplier’s materials were received , to help ensure that in the event of a recall, raw materials can be traced back to a supplier in case they were the ones at fault, and to make sure that you know where else you used that raw material. Allergens profiles on raw materials allow you to ensure that in case your supplier is out of your typical raw material, any substitute will ensure you satisfy any finished goods label claims you have made. 2 Tracking Raw Materials through Production The second important aspect of lot traceability is to keep track of which raw materials went into which finished goods, ensuring that a finished good represents the relevant collection of raw material lots. This ensures you can connect the lots between finished good lots and supplier lots. This is often the most challenging aspect of lot control, especially for small companies and especially for disassembly manufacturing products that take one or more inputs and create more than one output from it (meat cutting, vegetable processing and any businesses that have scrap or rework). 3 Tracking Finished Good Lots to Customers The last important aspect of lot traceability is making sure that finished good lots are tracked by which customer they were shipped to. This is important in the event of a recall, so the customer can be contacted and told to pull and/or return product that was affected. This prevents having to recall everything sent to a customer, as you will know exactly which lots they need to look for. When all three of these parts are combined, you can achieve what’s called one-up-one-down traceability. This means that if you think of the supply chain as a river, you can track product lots both up and down-stream from your company by one step. If everyone had one-up-one-down traceability, the chain would be complete, and recalls could be executed effectively, except… Actual Recall Situations In the event of an actual recall, you are going to need access to this information fast. The government inspection authority will be pressuring for a successful recall as quickly as possible. This is where manual paper-based systems and even spreadsheet systems often fail you. Unfortunately it can be a significant administrative burden to track all of this lot flow, on top of the already challenging inventory flow. Ideally this information should be accessible instantly and be accurate enough to call customers on the spot in order to effectively execute the recall. Handling a recall quickly and effectively can mean the difference between staying in business and going out of business, and it’s a risk that many small and medium business owners take every day.