A lot number is a reference assigned to a group of items made under the same conditions. It supports traceability, compliance, and expiry tracking. In WMS platforms, the lot number is recorded during receiving and followed through storage, picking, and dispatch. For example, if Lot #L2406 was linked to a raw material recall, the WMS can instantly identify all finished goods and customers affected.

A lot number is a unique reference assigned to a group of items manufactured, processed, or received under the same conditions. This critical identifier enables traceability throughout the supply chain, supports regulatory compliance, and facilitates efficient recall management when quality issues arise.

In modern WMS platforms, lot numbers are captured during receiving and meticulously tracked through storage, picking, and dispatch. For example, if Lot #L2406 was linked to a contaminated raw material, the system can instantly identify all affected finished goods, their current locations, and which customers received them.

How Lot Numbers Work in Practice

Lot numbers create a digital thread connecting products throughout their lifecycle:

Manufacturing Example: A cosmetics manufacturer produces 5,000 units of moisturiser on July 18th:

• Raw materials: Tracked by supplier lot numbers

• Production: Assigned Lot #MC20250718

• Quality testing: Results linked to lot number

• Distribution: Every unit's destination recorded

• Customer delivery: Final location tracked

Distribution Example: A food distributor receives mixed pallets from multiple suppliers:

• Supplier A: Yogurt Lot #YG4521 (expires 14 days)

• Supplier B: Cheese Lot #CH8934 (expires 28 days)

• System action: Segregates by lot for FEFO compliance

• Customer orders: Automatically allocated by expiry priority

This granular tracking transforms reactive firefighting into proactive management.

Common Challenges and Practical Solutions

Inconsistent Lot Number Formats

The Challenge: Different suppliers use varying formats - some use dates (240718), others use sequential numbers (LOT00156), and some use complex alphanumeric codes (AB-24-07-X5). This inconsistency complicates tracking and reporting.

The Solution: Implement a translation layer in your WMS:

• Capture supplier lot numbers as provided

• Generate internal standardised lot numbers

• Maintain mapping between external and internal numbers

• Use consistent format for all internal operations

Example Standard Format: [Product Code]-[Year][Month][Day]-[Sequence] Result: MOIST-240718-01

Lot Number Capture Failures

Missing or incorrect lot numbers at receiving create downstream chaos. Common causes include:

• Illegible labels

• Missing documentation

• Staff skipping capture under pressure

• System timeouts during entry

Robust Solutions:

• Mandatory lot capture before putaway allowed

• Barcode/QR scanning to eliminate manual entry

• Exception workflows for missing lots

• Supervisor alerts for capture failures

Multi-Level Lot Tracking

The Challenge: Products often require tracking at multiple levels - raw materials have supplier lots, production creates new lots, and some customers assign their own lots.

The Solution: Hierarchical lot tracking:

1. Supplier Lot: Track incoming materials

2. Production Lot: New lot for manufactured items

3. Customer Lot: Their reference for their systems

4. Parent-Child Relationships: Link all levels for complete traceability

Business Impact of Effective Lot Number Management

Proper lot number tracking delivers measurable benefits:

Rapid Recall Execution When quality issues arise, lot tracking enables surgical precision. Instead of recalling all products, businesses can target specific lots. A food manufacturer reduced recall costs by 85% after implementing comprehensive lot tracking - affecting 5,000 units instead of 50,000.

Regulatory Compliance Industries like pharmaceuticals, food, and cosmetics face strict traceability requirements. Lot numbers provide the audit trail regulators demand. Non-compliance can result in significant fines, facility closures, or criminal prosecution.

Quality Management Link quality test results to specific lots. Track defect rates by production run. Identify supplier quality trends. This data drives continuous improvement and vendor accountability.

Customer Confidence When customers inquire about product origins or report issues, instant lot visibility enables professional, rapid responses. This transparency builds trust and protects brand reputation.

Key Metrics to Monitor

Track these KPIs to ensure lot number effectiveness:

• Lot Capture Rate - Percentage of receipts with lot numbers recorded

• Lot Accuracy - Verified accuracy during cycle counts

• Traceability Depth - How many supply chain steps are tracked

• Recall Response Time - Speed of affected product identification

• Lot Data Quality - Completeness and standardisation of lot information

• Compliance Audit Results - Performance during regulatory inspections

Regular monitoring ensures your lot tracking meets business and regulatory needs. Learn about comprehensive inventory accuracy strategies.

Frequently Asked Questions

What's the difference between lot numbers and batch numbers?

Functionally, they're often identical - both track groups of items. Industry convention typically uses:

• "Lot numbers" in pharmaceuticals and food

• "Batch numbers" in chemicals and cosmetics

• The terms interchangeably in most other industries

Your WMS should handle both terminologies.

How long should we retain lot number data?

Retention requirements vary by industry:

• Pharmaceuticals: Often 1 year past expiry date

• Food: Typically 2-5 years

• Medical devices: Up to 10 years

• General products: 3-7 years recommended

Consider regulatory requirements, warranty periods, and litigation risks when setting retention policies.

Can lot numbers include expiry dates?

Yes, many businesses embed dates in lot numbers for quick reference. However, best practice stores expiry dates separately to enable system-driven FEFO and automated alerts.

How do we handle products without supplier lot numbers?

Create lots at receiving based on:

• Receipt date

• Purchase order number

• Supplier delivery note reference

• Container or pallet identifier

Document your lot assignment rules for consistency.

Integration Considerations

Successful lot number implementation requires:

Data Capture Infrastructure:

• Barcode/RFID scanners for accurate capture

• Label printers for lot identification

• Mobile devices for warehouse floor tracking

• Integration with receiving systems

System Configuration:

• Lot number field requirements

• Format validation rules

• Duplicate prevention logic

• Parent-child relationship mapping

Process Design:

• Mandatory capture points

• Verification procedures

• Exception handling workflows

• Audit mechanisms

Reporting Capabilities:

• Lot traceability reports

• Expiry date tracking

• Recall impact analysis

• Compliance documentation

Alternative Approaches to Lot Tracking

No Lot Tracking

Some small operations skip lot tracking, relying on date codes or visual management. This approach fails when recalls occur or customers demand traceability.

Paper-Based Lot Records

Manual lot books or spreadsheets provide basic tracking but lack real-time visibility and search capability. Error-prone and labour-intensive.

Date-Only Tracking

Using only production or expiry dates without unique lot identifiers. Insufficient when multiple batches share the same date or when precise traceability is required.

Comprehensive WMS Lot Control

System-enforced lot capture and tracking throughout the supply chain. Provides instant visibility, regulatory compliance, and recall capability. Essential for 3PL providers and businesses in regulated industries.

Next Steps: Implement Robust Lot Tracking

Evaluate your lot number requirements:

• Current traceability gaps and risks

• Regulatory compliance obligations

• Customer lot tracking demands

• Recall preparedness levels

Schedule a Consultation to design a lot number strategy that protects your business and satisfies stakeholder requirements.

Related Topics: Lot Control | Batch Tracking | Serial vs Lot Tracking