What Is Lot Traceability in Manufacturing?

In an increasingly globalized and multi-path supply chain, accountability is everything. Many businesses have probably heard the term ​“lot traceability” and how it relates to creating transparent and accountable commerce worldwide. But what exactly is this important concept, and what implications does it have for today’s manufacturing operations and the manufacturing enterprise resource planning systems they use?

The key concepts of lot traceability aren’t hard to understand, but understanding them and implementing them can be very different things. This article will examine the core concepts of lot traceability, as well as why some businesses struggle to implement it and, finally, why it’s both easier and more important now than it’s ever been. 

The fundamental principle of lot traceability is that a batch of manufactured goods should be traceable at every stage of its creation process. From input materials to manufacturing to distribution and beyond, there should be a clear chain of trackable records that informs all relevant parties of the entire history of the batch in question. Good lot traceability is bidirectional — that is, the lot’s path can be traced both upstream to its components and manufacturing process and downstream to customers and distributors. 

The major conceptual points of a robust lot traceability system include:

• Which materials (and how much) were used in the creation of a given batch of goods

• Which suppliers provided the input materials used and when 

• What kind of quality control checks were performed on a batch and who signed off on them

• Which distributors received and distributed goods from a given batch

• Which customers received the goods from the distributors

These essential functions help to create a manufacturing and distribution process that’s truly transparent and accountable. That, in turn, has numerous benefits for an organization at every level. This functionality is a critical piece of the manufacturing software used in batch manufacturing.

Lot traceability has always been important for manufacturers, but it’s become even more urgent lately. The widespread food recalls of 2018 have convinced leaders in many industries that businesses can no longer afford to operate without robust lot traceability for all of their products. 

However, lot traceability is important for many reasons that go beyond the worst-case scenarios of product recalls. A business might be lucky enough never to have to issue a recall, but the ability to track all of their batches end-to-end will have far-reaching beneficial effects beyond merely reacting to manufacturing issues:

• Makes it much easier and faster to recall defective or unsafe products

• Helps to pinpoint where problems are occurring in a manufacturing or sourcing process

• Improves customer service

• Boosts the efficiency of warehouse and logistics operations

• Helps avoid scrutiny and fines from the FDA or USDA

Numerous manufacturers have found lot traceability challenging to implement. It requires a great deal of information to be readily available and the seamless integration of numerous different systems. Traditionally, this level of integrated information has been tough to come by. Many manufacturers have not had a single unified platform that allows data flows from various stages of the production process to be tracked and analyzed and have had to make do with piecemeal solutions. 

However, the new consensus focuses on one set of solutions that offers a faster and more complete implementation of lot traceability than any other. Manufacturing ERP software has always been among the key tools for lot traceability, and it’s now both more powerful and more necessary than ever. 

A good ERP software solution should offer some or all of the following lot traceability features (depending on each individual business’s needs): 

• Automatic quality control checks that flag irregularities in process or distribution

• Manufacture and expiration date tracking

• Supplier tracking that allows inputs to be traced back to their origins

• Distribution tracking that follows where each batch goes after production

• Formula and process tracking tools including modification logs

• Integration with lot management hardware systems such as barcode scanners

Food and beverage manufacturing ERP software is usually designed with some of the most prominent and robust lot traceability features. However, lot traceability is increasingly standard on most top ERP manufacturing and distribution software systems. Moreover, ERP software is more accessible and affordable than it’s ever been thanks to the advent of SaaS (software as a service). High-performance cloud-based ERP software is now available on a subscription model, and most of these software suites feature the powerful lot traceability features that today’s businesses need.

Lot traceability is rapidly gaining in importance for manufacturers around the world. The safety, security and accountability of the global supply chain demand it. With the forces of commerce increasingly shaping a world where lot traceability is an essential for doing business, manufacturing businesses owe it to themselves and to their customers to investigate the best ways to implement solutions in this area.