expandable

Product recalls cost companies around $10 million in direct expenses alone. For manufacturers, this financial reality makes lot tracking software more than just a compliance tool—it’s become essential protection against devastating business disruption.

Lot tracking assigns unique identifiers to product batches, creating precise traceability from raw materials through production to final delivery. The stakes are high: the Food Safety Modernization Act grants the FDA broad authority to mandate recalls and shut down operations if companies cannot demonstrate proper lot tracking data collection and management.

The impact extends beyond regulatory compliance. Lot tracking is particularly critical in food, pharmaceuticals, automotive, and aviation, where even minor inconsistencies can threaten human health and safety. Your tracking system protects more than operational efficiency—it safeguards your customers, your reputation, and your bottom line.

But how do you choose the right solution? Many manufacturers struggle with this decision, unsure which features matter most or how to evaluate software against their specific operational needs.

This guide provides a practical roadmap for selecting lot tracking software that fits your manufacturing operation. You’ll learn to identify essential features, evaluate vendor options, and plan implementation that strengthens both quality control and compliance capabilities.

Understand What Lot Tracking Software Does

Lot tracking forms the backbone of product traceability in manufacturing operations. Before evaluating software options, you need to understand what this process accomplishes and how technology has changed the game.

What is lot tracking in manufacturing?

Lot tracking is a systematic method of monitoring specific batches or groups of products throughout their entire lifecycle. These batches, called “lots,” consist of items manufactured under identical conditions, using the same raw materials during a single production run.

Each lot receives a unique identifier that connects it to critical information:

This process creates a complete record of every component and finished product in your organization. A food manufacturer might assign lot numbers to batches of canned goods to trace ingredients back to suppliers or manage expiration dates. The system supports inventory management strategies like FIFO (First-In, First-Out) or FEFO (First-Expired, First-Out), ensuring older stock moves first to reduce waste.

What you get is a digital paper trail that follows products from raw materials to end consumers.

How software automates the tracking process

Modern lot tracking software transforms what was once a complex, paper-based workflow into a streamlined operation. These systems do much more than simple record-keeping.

Properly implemented lot tracking software:

The technology works by recording transactions at every critical point. When receiving raw materials, an employee scans an automatically generated label that identifies the specific lot. During production and shipping, the system tracks each component’s movement without paperwork.

These systems integrate with enterprise solutions like ERP and inventory management platforms to create a single source of truth for all product data. This integration enables bidirectional traceability—following products forward to customers or backward to raw material sources.

Why manual tracking is no longer enough

Some businesses still track lots manually using paper records or spreadsheets, but this approach presents significant limitations in today’s manufacturing environment.

Manual tracking systems create several problems:

The bottom line: if an audit or recall occurs, manual tracking can take hours or days to trace where materials are in production or in the supply chain. Automated systems provide instant access to this information, potentially saving millions in recall costs and protecting consumer safety.

Regulatory requirements in many industries have become increasingly stringent, making compliance through manual systems nearly impossible. Automated lot tracking software ensures you can meet these demands with accurate, accessible records that satisfy auditors and regulatory bodies.

Identify Your Business Needs

Successful lot tracking implementation starts with understanding your specific operational requirements. Your software choice must align with your manufacturing challenges, regulatory obligations, and business scale. This assessment determines whether you invest in the right solution or end up with expensive software that doesn’t solve your actual problems.

Assess your current inventory challenges

Inventory management difficulties often reveal the need for robust lot tracking capabilities. Medical device manufacturers typically maintain 150 days of inventory in the field, with some companies holding up to 400 days’ worth of products. This inventory spread creates tracking, compliance, and quality control challenges that manual systems simply cannot handle.

Your lot tracking software should address these common operational problems:

Poor inventory management costs businesses an estimated $1.77 trillion globally each year. Identifying which of these challenges affects your operation most severely helps prioritize essential software features.

Consider industry-specific compliance requirements

Regulatory compliance requirements vary significantly across industries, making them crucial considerations when selecting lot tracking software. Manufacturers in food and beverage, electronics, and pharmaceuticals are legally required to maintain accurate lot-tracking records as part of their compliance processes.

The Food Traceability Rule requires documentation of traceability lot codes and sources, enabling FDA to identify food sources faster during outbreak investigations. Medical device manufacturers must comply with FDA labeling regulations or risk enforcement actions, market access delays, or patient harm.

Your lot tracking solution should align with specific regulations for your industry:

Determine the scale and complexity of your operations

Manufacturing operation size and complexity significantly impact your lot tracking software requirements. Companies with multiple locations or complex supply chains need solutions that handle data across various sites and integrate with existing systems.

Consider these operational factors:

Small operations might succeed with basic lot tracking features. Larger manufacturers often require advanced functionality like real-time analytics, multi-site coordination, and extensive integration capabilities.

Evaluating inventory challenges, compliance requirements, and operational scale creates a clear picture of your lot tracking software needs. This assessment serves as your roadmap through the selection process, ensuring you choose a solution that addresses your specific requirements rather than unnecessary features.

Evaluate Key Features to Look For

Once you’ve identified your business requirements, focus on specific software capabilities that deliver measurable value. The right feature set depends on your operational complexity, but certain core functions are essential for effective lot tracking.

Lot creation and traceability

Your software must automatically generate unique identifiers for each product batch while storing critical information—production dates, expiration dates, and batch numbers. Look for systems that maintain comprehensive traceability both upstream to raw material sources and downstream to customer deliveries. Advanced systems trace suspected products across all processes, from vendor delivery through production to customer shipments, generating bidirectional traceability reports.

Barcode and RFID support

Data capture technology determines how efficiently your team can record lot information. Barcode systems provide cost-effective solutions with customizable labels storing up to 7000 characters. RFID technology offers contactless functionality that reduces manual entry errors. RFID readers scan multiple tags simultaneously without line-of-sight requirements, speeding up asset audits and reducing tracking time. Your choice depends on scanning needs, environmental factors, and budget constraints.

Integration with ERP and inventory systems

Your lot tracking software should connect seamlessly with existing enterprise resource planning (ERP) and inventory management systems. This connectivity enables automatic data flow across your organization, supporting better decision-making and automating processes beyond basic inventory management. Prioritize solutions that integrate with manufacturing systems to enhance traceability and connect with accounting and e-commerce platforms, creating a single source of truth for all product data.

Real-time tracking and reporting

Real-time visibility into inventory movements and status forms the foundation of effective lot tracking. The software should provide instant access to lot histories, locations, and status changes. Reporting capabilities must support both operational decisions and compliance requirements, including the ability to generate customized recall letters that limit recall scope to specific lots.

Compliance and audit readiness

Your lot tracking software should simplify regulatory compliance through automatic documentation and audit trails. The system must support industry-specific regulations like FDA requirements, HACCP, FSMA, or ISO standards. Look for features that automate expiration alerts, enable batch separation protocols, and generate compliance reports for audits. Quality solutions reduce audit preparation time by maintaining complete histories from production to delivery.

What features matter most? That depends on your specific manufacturing environment, but these five categories form the foundation of any effective lot tracking system.

Compare and Shortlist Software Options

Your requirements are clear, and you understand the essential features. Now comes the critical evaluation phase—comparing available lot tracking solutions to find the right fit for your manufacturing operation.

Create a feature checklist

Start with a comprehensive checklist that reflects your specific needs. Your evaluation framework should cover:

Mark features as “must-have” versus “nice-to-have” based on your manufacturing priorities. This distinction prevents feature creep from driving your decision.

Review vendor reputation and support

Due diligence on vendors can save significant headaches later. Research how long they’ve been in business and whether they’re experiencing growth or decline. Customer service quality matters—verify their support team can handle your questions and concerns effectively.

Read user reviews on independent platforms like Capterra, Trustpilot, and specialized app stores. Focus on feedback about support responsiveness, system reliability, and implementation experiences. Pay particular attention to reviews from companies similar to yours in size and industry.

Request demos and trials

Hands-on evaluation provides insights no sales presentation can match. Most vendors offer free trials, typically 14 days, to test software usability and functionality. Use this time strategically—test all critical features and involve your actual end-users in the evaluation process.

Establish clear performance indicators to measure whether the implementation meets your expectations. Document what works well and what doesn’t during the trial period.

Check for scalability and customization

Your software choice should grow with your business. Look for solutions offering different upgrade levels and additional modules as your requirements change. Verify the software can handle more users and increased data volumes without performance issues.

Consider whether customization options align with your specific manufacturing processes and industry regulations. The right solution adapts to your workflow rather than forcing you to adapt to the software.

Plan for Implementation and Training

Getting your lot tracking software selected is only the beginning. The real work starts with implementation, and this phase determines whether your investment delivers the expected returns.

Prepare your data and inventory records

Start with lot number standardization. Whether you choose date-based codes or alphanumeric sequences, consistency matters for smooth operations. A lot number like “20250115-001” represents production date (Jan 15, 2025) plus a batch identifier—clear and systematic.

Before migration, organize your existing records. Production dates, expiration dates, supplier information, and quality control results need to be accurate and complete. Your lot tracking system should integrate with current inventory management solutions to maintain data synchronization across platforms. This alignment ensures lot information matches stock levels, order fulfillment, and production schedules.

Train your team on new workflows

The most sophisticated lot tracking system fails without proper staff training. Everyone from warehouse staff to customer service needs to understand how to assign, track, and reference lot numbers.

Develop training programs that cover proper handling, labeling, and recordkeeping procedures. Customize materials to fit your specific implementation—you know your teams best. This investment in training builds a competent workforce ready to execute your inventory management strategy effectively.

Set up backup and data recovery protocols

Protect your lot tracking data with robust backup procedures. Establish backup frequencies aligned with your recovery point objectives. If your RPO is 15 minutes, schedule backups at least that often.

Test your recovery capabilities regularly by restoring backups in non-production environments. Document restoration steps clearly and train teams to execute them during system failures. Implement automated consistency checks after each backup to validate data integrity.

Monitor performance post-implementation

Once your system launches, evaluate its effectiveness through data analysis and employee feedback. Look for opportunities to improve traceability, efficiency, and error reduction.

Your manufacturing organization will evolve, and your lot tracking processes should evolve with it. Continue refining procedures to maintain alignment with changing business requirements.

Conclusion

Choosing lot tracking software isn’t just a technology decision—it’s a strategic investment in your manufacturing operation’s future. The right system protects your bottom line while positioning your company for sustainable growth.

The selection process requires methodical evaluation of your specific needs. Companies that rush this decision often find themselves with software that doesn’t match their operational requirements or compliance obligations. Take time to assess your inventory challenges, regulatory demands, and operational scale before evaluating vendors.

Your software choice should align with your manufacturing reality. Look for systems that integrate seamlessly with existing operations, provide real-time visibility, and support your compliance requirements. The best solution grows with your business rather than limiting your expansion options.

Implementation planning determines success. Even sophisticated software fails without proper data preparation, staff training, and ongoing performance monitoring. Companies that invest in thorough implementation see faster adoption and better results.

The bottom line: lot tracking software transforms from a compliance necessity into a competitive advantage. Manufacturers with precise traceability respond faster to quality issues, maintain tighter inventory control, and build stronger customer relationships. Your investment protects more than regulatory compliance—it safeguards your reputation and market position.

Start your selection process with clear requirements and realistic timelines. The effort invested in choosing the right solution pays dividends through reduced risk and improved operational performance for years to come.

Key Takeaways

Choosing the right lot tracking software is crucial for manufacturers to avoid costly recalls, maintain compliance, and protect their reputation while streamlining operations.

• Assess your specific needs first: Evaluate current inventory challenges, industry compliance requirements, and operational scale before comparing software options to ensure the solution fits your unique manufacturing environment.

• Prioritize essential features: Focus on lot creation/traceability, barcode/RFID support, ERP integration, real-time tracking, and compliance reporting capabilities that align with your business requirements.

• Test before committing: Request demos and free trials to evaluate usability with actual end-users, while checking vendor reputation, support quality, and scalability options.

• Plan implementation thoroughly: Prepare data migration, standardize lot numbering formats, train staff on new workflows, and establish backup protocols to ensure successful system deployment.

• Monitor post-implementation performance: Regularly evaluate system effectiveness through data analysis and employee feedback to optimize processes and maintain alignment with evolving business needs.

The right lot tracking software transforms from a compliance necessity into a competitive advantage, delivering operational efficiency, quality control, and significant cost savings through reduced waste and recall prevention.

FAQs

Q1. What is lot tracking software and why is it important for manufacturers? Lot tracking software is a system that allows manufacturers to create and maintain detailed records of raw materials and finished products, organized by batches or lots. It’s crucial for quality control, regulatory compliance, and efficient recall management, helping manufacturers avoid costly errors and protect their reputation.

Q2. What key features should I look for in lot tracking software? Essential features include lot creation and traceability, barcode or RFID support, integration with existing ERP systems, real-time tracking and reporting capabilities, and compliance-ready functionalities. The software should also be scalable and customizable to fit your specific manufacturing needs.

Q3. How does lot tracking software improve inventory management? Lot tracking software provides real-time visibility into inventory movements and status, enabling better decision-making and reducing issues like stockouts or overstocking. It supports strategies like FIFO (First-In, First-Out) or FEFO (First-Expired, First-Out), helping to minimize waste and optimize inventory control.

Q4. What steps should I take to implement lot tracking software successfully? Successful implementation involves preparing your data and inventory records, standardizing lot number formats, thoroughly training your team on new workflows, setting up robust backup and data recovery protocols, and continuously monitoring performance post-implementation to ensure the system meets your evolving needs.

Q5. How can lot tracking software help with regulatory compliance? Lot tracking software simplifies regulatory compliance by automating documentation and maintaining detailed audit trails. It supports industry-specific regulations like FDA requirements, HACCP, FSMA, or ISO standards. The software can generate compliance reports, automate expiration alerts, and enable batch separation protocols, significantly reducing audit preparation time.

Most manufacturers implement serial number tracking because they have to. Regulatory requirements drive the decision, compliance boxes get checked, and the project moves forward. What they don’t realize is the operational advantages sitting right there in their new system.

Serial number tracking assigns unique identifiers to individual products throughout their lifecycle. Each item gets its own digital fingerprint—typically a barcode or RFID tag—that follows it from production through distribution to the end customer. The result is complete visibility into where each product came from, where it’s been, and where it’s going.

The compliance angle is straightforward. Regulated industries need serial and lot numbers for legal requirements. The Drug Quality and Security Act (DQSA) mandates traceability systems for prescription drugs throughout U.S. distribution. Medical device manufacturers face similar requirements under FDA regulations. These companies implement serial tracking because the law requires it.

The business advantages tell a different story. Serial numbers prevent counterfeiting because unique identifiers can’t be easily replicated. Product recalls become surgical strikes rather than costly industry-wide shutdowns. Quality control teams can trace defects to specific production batches, suppliers, or manufacturing dates. Customer service representatives access complete product histories with a single scan.

The gap between compliance-driven implementation and operational value represents a significant missed opportunity. Companies install serial tracking systems to satisfy regulators but rarely explore what else these systems can do. The data is there. The infrastructure is in place. The question is whether you’re using it to its full potential.

We’ll examine the operational benefits most businesses overlook and show you how serial tracking can strengthen your manufacturing operations beyond regulatory compliance.

What Makes Serial Number Tracking More Than Just Compliance

Compliance gets you in the door. The operational advantages keep you there. While regulatory requirements drive initial adoption, the real value comes from what serial number tracking does for your day-to-day manufacturing operations.

Enhanced traceability across the supply chain

Serial tracking creates an unbroken digital chain of custody for each product. Every component, every process step, every quality checkpoint gets recorded against that unique identifier. When defects surface—and they will—you can trace the problem back to its source in minutes rather than days.

Quality investigations become surgical rather than scattershot. Teams can retrieve all measurements and attributes related to each serial number, enabling precise analysis of deviations. Instead of shutting down entire production lines, you identify the specific batch, supplier, or process that caused the issue. The result is targeted quality improvements rather than broad, costly adjustments across your entire operation.

This granular traceability proves especially valuable for manufacturers dealing with complex assemblies or multi-tier supply chains. You know exactly which suppliers provided components for any given product, which production line assembled it, and what quality checks it passed through.

Real-time visibility into serialized inventory

Traditional inventory systems tell you quantities. Serial tracking tells you stories. Each item carries its own history—manufacturing date, quality test results, previous locations, current condition.

Warehouse teams gain instant access to real-time inventory status and location when coupled with barcode scanning technology. Staff can locate specific items quickly, track movements efficiently, and adjust to changes without confusion. For equipment rental companies, this visibility allows precise planning, movement tracing throughout events, and easy retrieval of lost items.

The operational impact is immediate. Inventory turns improve because you can identify slow-moving items by their specific attributes rather than just product codes. Quality control becomes proactive—you can flag items approaching expiration dates or requiring maintenance before they become problems.

Improved warranty and return management

Returns and warranty claims test every manufacturer’s patience. Serial tracking turns this headache into a competitive advantage. When customers initiate returns, you can instantly verify whether the serial number corresponds to the original sale. No more guesswork. No more fraudulent claims slipping through.

The return process becomes streamlined. Scanning the serial number tells teams exactly where the product should go—back to stock if it’s in good condition, to refurbishment if it needs work, or to the manufacturer if it’s defective. This precision reduces processing time while building customer trust through accurate warranty and service management.

For manufacturers handling high-value items, this capability protects financial integrity. You know exactly what was sold, when it was sold, and whether the return is legitimate. The cost savings from prevented fraud often justify the entire serial tracking investment.

Hidden Operational Benefits Most Businesses Overlook

Once serial tracking systems are in place, manufacturers discover advantages that extend far beyond the original compliance objectives. These operational benefits often surprise companies because they emerge from the same data infrastructure already required for regulatory purposes.

Fraud Prevention Through Unique Serial Validation

Serial numbers function as digital fingerprints that eliminate common fraud schemes. When customers return products, you can instantly verify authenticity by matching the serial number to your original sale records. This validation stops warranty fraud before it impacts your bottom line.

The system also catches sophisticated fraudsters who cycle through multiple IP addresses or email accounts to place fraudulent orders. Each genuine product carries a unique identifier that can’t be replicated or transferred to counterfeit items. This protection benefits both your company and legitimate customers who rely on authentic products.

Streamlined Product Recalls with Targeted Traceability

Product recalls test every manufacturer’s crisis management capabilities. Serial tracking transforms these situations from company-wide disasters into manageable, targeted responses.

Instead of recalling entire product lines, you can identify precisely which items contain defective components. This precision reduces recall response times by half while cutting shelf walks by 47%. Samsung demonstrated this approach during a washing machine recall, allowing customers to enter their serial numbers online to determine if their specific unit needed attention.

The financial impact is significant. Targeted recalls cost less, generate fewer customer complaints, and preserve brand reputation during difficult situations.

Customer Service Excellence Using Serial History

Every serial number creates a detailed product biography that customer service teams can access instantly. When customers call with issues, representatives see complete histories—manufacturing dates, previous service records, warranty coverage, and repair history.

This information allows service teams to provide personalized solutions rather than generic troubleshooting scripts. Representatives can determine which services fall under warranty, identify upgrade opportunities, and resolve issues faster because they understand each product’s specific situation.

The result is customer service that feels tailored rather than standardized.

Data-Driven Inventory Decisions from Serial-Level Insights

Serial tracking generates inventory intelligence that aggregate data cannot provide. You can analyze which specific products sell fastest, identify seasonal patterns, and spot emerging customer preferences before competitors.

This granular visibility supports more accurate restocking decisions. Rather than ordering based on broad category performance, you can optimize inventory levels for individual SKUs based on their actual lifecycle data. The result is reduced carrying costs and fewer stockout situations.

Serial-level data also reveals the complete customer journey for each product, allowing you to anticipate market shifts and adjust inventory strategies accordingly.

Setting Up Serial Number Tracking: What Actually Works

The difference between successful serial tracking implementations and failed ones often comes down to planning. Companies that rush into deployment without considering their operational requirements typically end up with systems that create more problems than they solve.

Software Selection: What to Look For

Your software choice determines everything else that follows. Automated serial number generation eliminates manual entry errors that plague many manufacturing operations. Look for platforms that handle barcode scanning or RFID technology—these aren’t nice-to-have features but essential capabilities for efficient data capture.

Search functionality matters more than most companies realize. When a customer calls about a defective product, your team needs to locate that specific item instantly. Robust search capabilities allow quick identification based on serial numbers, batch codes, or manufacturing dates.

Reporting features separate basic tracking systems from business intelligence tools. The software should convert serial data into actionable insights about product performance, quality trends, and customer patterns. Without this capability, you’re collecting data but not gaining value from it.

Establishing Serial Number Formats

Consistency in numbering conventions prevents confusion and tracking errors. You’ll need to decide whether to use manufacturer-assigned numbers or create your own unique identifiers. Each approach has trade-offs.

Manufacturer numbers work well for companies that primarily resell products. Custom identifiers give you more control but require internal processes to generate and assign them. Consider incorporating meaningful information into your format—year of manufacture, product category, or location codes can make serial numbers more useful for your teams.

The scope of uniqueness matters. Will serial numbers be unique within product lines, across your entire organization, or company-wide? This decision affects database design and prevents duplicate entries that could compromise tracking accuracy.

ERP and CRM Integration

Serial tracking systems work best when connected to your existing business systems. Your ERP manages backend operations—financial data, purchase history, manufacturing records. Your CRM handles customer-facing information and service history.

When these systems share serial data, sales teams can check inventory availability instantly. Customer service representatives access complete product histories without switching between applications. Finance teams track warranty costs and product returns with precision.

The integration also enables automated workflows. Sales orders trigger inventory checks. Return requests automatically validate serial numbers against original sales records. These connections reduce manual work and minimize errors.

Staff Training: Beyond the Basics

Technical implementation means nothing without proper staff training. Warehouse teams need hands-on experience with scanning equipment and data entry procedures. Customer service personnel require training on accessing serial histories for warranty verification and service calls.

Different roles need different training approaches. Production teams focus on assigning serial numbers and updating manufacturing records. Sales teams learn to check inventory status and product availability. Service technicians understand how to access maintenance histories and warranty information.

Training shouldn’t be a one-time event. Regular refresher sessions ensure staff stay current with system updates and new procedures.

Best Practices for Long-Term Serialized Inventory Management

Serial tracking systems require ongoing maintenance to deliver consistent value. The initial implementation gets you started, but sustained benefits depend on how well you manage the system over time.

Regular audits using serial number tracker tools

Audit schedules separate successful serial tracking from systems that drift into inaccuracy. Regular checks verify each item carries a distinct serial number, confirm proper formatting, and validate data accuracy in your system. You can conduct these audits through cycle counting, physical counting, or sampling—the method depends on inventory size and operational complexity.

The key is consistency. Weekly spot checks catch problems before they multiply across your inventory. Monthly full audits provide broader system validation. Serial number tracking software automates much of this verification, flagging exceptions and reducing manual effort while improving accuracy.

Barcode vs. RFID: Making the Right Choice

The scanning technology you choose affects both costs and operational efficiency. Barcodes cost just cents per label compared to RFID tags that range from $1 to over $30 each. That price difference matters when you’re tagging thousands of items.

RFID offers operational advantages that may justify the higher cost:

Barcode systems require individual scanning but often deliver greater accuracy at a fraction of the cost. Your choice should align with business volume, scanning frequency, and budget constraints. High-volume operations with frequent inventory moves may benefit from RFID efficiency. Lower-volume manufacturers often find barcodes provide the right balance of cost and functionality.

Maintaining data integrity across systems

Data accuracy determines whether your serial tracking system remains valuable or becomes a burden. Implement strict access controls and user permissions to prevent unauthorized changes to serialized inventory data. Establish audit trails that record modification history, helping assign accountability and improve item-level traceability.

Data cleansing practices remove outdated information. Deduplication prevents repeated entries that compromise tracking accuracy. These measures ensure your serial tracking system maintains its value throughout your business operations.

The bottom line: Serial tracking systems work best when they’re actively managed, not just implemented.

The Bottom Line

Serial number tracking delivers operational value that extends well beyond compliance requirements. The data is already there. The infrastructure is in place. The question is whether you’re capturing the full business value.

Companies that treat serial tracking as a compliance checkbox miss significant opportunities. Fraud prevention alone can save thousands of dollars annually through reduced warranty abuse and return processing costs. Product recalls become targeted operations rather than industry-wide shutdowns. Customer service teams access complete product histories instantly, building loyalty through personalized support.

The implementation path is straightforward: select appropriate software, establish consistent numbering conventions, integrate with existing systems, and train your team properly. Regular audits and appropriate scanning technology maintain accuracy over time.

Serial tracking represents one of manufacturing’s most underutilized capabilities. The businesses that recognize its operational potential gain measurable advantages in efficiency, customer satisfaction, and cost control. Others continue treating it as a regulatory burden.

Your competitors are making this choice right now. The question isn’t whether serial tracking can improve your operations—the question is whether you can afford to ignore what your tracking system is already telling you.

FAQs

Q1. Why is serial number tracking crucial for businesses? Serial number tracking is essential for businesses as it enhances accuracy, improves traceability across the supply chain, and provides real-time visibility into inventory. It allows companies to monitor each product’s lifecycle, from manufacturing to distribution, aiding in quality control and creating a more transparent supply chain.

Q2. How does serial number tracking help in fraud prevention? Serial number tracking acts as a unique identifier for each product, making it difficult for fraudsters to replicate. This system allows businesses to instantly verify the authenticity of products during returns or warranty claims, effectively preventing warranty fraud and protecting both the company and legitimate customers.

Q3. Can serial number tracking improve customer service? Yes, serial number tracking significantly enhances customer service. It provides representatives with access to complete product histories, including manufacturing dates, previous service records, and warranty status. This enables personalized solutions and tailored experiences, ultimately building customer loyalty.

Q4. How does serial number tracking benefit inventory management? Serial number tracking offers granular visibility into individual items, allowing businesses to access real-time inventory status and location. This detailed information supports data-driven restocking decisions, optimizes inventory levels, and reduces unnecessary holding costs. It also aids in identifying top-performing products and emerging customer preferences.

Q5. What are the best practices for implementing a serial number tracking system? To implement an effective serial number tracking system, businesses should choose appropriate tracking software, establish consistent numbering conventions, integrate the system with existing ERP and CRM platforms, and provide comprehensive staff training. Regular audits, efficient scanning methods (like barcodes or RFID), and maintaining data integrity across systems are crucial for long-term success.

I often tell Clients “Manufacturing is simple: you buy stuff, you put stuff together and you ship stuff.” Often, their response to this is “We’re different” – mostly based on the complexity of their technology or manufacturing process. But regardless of the technology, the process, insourced or outsourced manufacturing, onshore or offshore production or the volume of activity, at the highest level the fundamentals are the same – they buy stuff, they put stuff together and they ship stuff.

One of the biggest challenges (and source of headaches) for manufacturing companies is Inventory Management and Control – or “Where’s my stuff?” There are several layers to this issue

Manufacturing companies struggle with these issues every day. And while the Procurement, Inventory Management and Finance teams want to control “the stuff”, Manufacturing teams are laser-focused on just putting stuff together and shipping it, until stuff is missing; then, the Procurement, Inventory Control and Finance teams messed up, even though Manufacturing may have caused their own problems by not tracking or transacting their stuff.

At the third session of the Sunrise Sip Club, sponsored by Expandable Software and Mirador Software Group, on July 18th, 2024, Raj Vora of VAS Engineering, Inc. shared his experience and views on Inventory Management.

VAS Engineering is located in San Diego, California, and has provided quality contract manufacturing services for the electronics industry since 1987. This is a significant challenge in itself; manufacturing in the United States in general and in California in particular is a highly competitive industry, and much of this work has been moved offshore to be cost competitive.

A Call To Action

When Raj joined VAS in the Spring of 2018, he quickly found that one of the biggest losses in productivity (and increases in cost) was generated by the lack of Inventory control and visibility – they routinely could not find their stuff and it took expensive senior resources to find it, while production personnel potentially sat idle.

Raj tackled this problem with his passion as a technology enthusiast and the creativity and vision to transform innovative and disruptive ideas into process improvements and profitability.

Leveraging Expandable

Raj and the VAS team took a bold step and began to create middleware apps leveraging Expandables’ Sequel database. The first step was to create an optical scanning app that scanned every item coming into the factory, assigned a lot or serial number to each and updated Expandable. Now they knew every bit of stuff that had been received and where the stuff was located. This significantly simplified the kitting process (which is still manual).

The next step was to create another, similar app in the Work in Process area. Many of the components used in VAS’ products come on reels, and those reels are loaded on printed circuit board (PCB) stuffing machines. The second ap optically scanned and counted every component utilized and applied it to the appropriate job/workorder. Now they knew exactly how much stuff was used. Inventory accuracy in both the warehouse and the production floor improved dramatically. After production is completed, the stuff is moved to Finished Goods for shipping and Expandable is updated.

What about ROI?

You’re probably wondering about the cost of hardware, programming and software to create the new middleware. For Raj and his team, the Return on Investment (ROI) was high, and the payback period was short. Looking at the amount of time saved by senior team members looking for stuff and correcting errors on stuff as well as the elimination of production downtime waiting for stuff showed that the investment was more than justified.

The Fundamentals Still Apply

Fundamental Inventory Management systems and processes still apply. Material Requirements Planning (MRP) is still utilized. Variance Reporting, Cycle Counting and Excess/Slow Moving/Obsolete Inventory Analyses are still employed, although with the warehouse and WIP well under control and working to firm backlog and orders it makes these controls important but less critical. 

Next Steps

Raj and his team are not done working on their systems and processes. It’s a little bit like Disneyland – it will never be finished and there will always be room for improvement. Automating the kitting process and WIP Completions and Shipping are still on the horizon, and the use of AI has implications across the board. But one step at a time…

Conclusion

The methodologies employed by Raj and the VAS Engineering team may not be applicable for every manufacturing operation, but it gives us an existence theorem that with vision and creativity Inventory Management can be achieved and manufacturing in the United States can still be viable. 

Jeff Osorio is a Consulting CFO with over 30 years of experience in operationally oriented  companies ranging from pre-Revenue to $4B with 40 ERP implementations in his portfolio. He is also an Adjunct Professor in the MBA program of the Leavey School of Business at Santa Clara University.