Lot Number Tracking

What is a lot number?

A lot number is an identification number assigned to a particular quantity, batch or lot of a product from a single manufacturer. Lot numbers can typically be found on the outside of packaging.

A product will typically have an identifier often referred to as an SKU (stock keeping unit). For example a case of tomato sauce may have an SKU of SCS-123. In addition to the SKU, the case will have a lot number which may be different on each case. For example cases purchased in December may have a different lot number than those purchase in January but the SKU will be the same. A lot number may also be a date code representing the expiration of the product.

Why should my business track lot numbers

Lot numbers enable the manufacturer to trace a product back through the production process to the source of the raw materials used in the finished product. In our example of tomato sauce, the lot number on the cases allow the manufacturer to determine which tomatoes where used and from which supplier. So in the case where a certain batch of tomatoes may have been contaminated, the manufacturer can recall only the lot numbers affected instead of a total recall.

For food and beverage manufacturers, electronic traceability will become an industry requirement. On July 31, 2009, the House passed the Food Safety Enhancement Act, which has been touted as the most far reaching reform to food safety legislation in 50 years. The legislation outlines the requirements for all companies who produce, manufacture, process, pack, transport, or hold food to maintain full pedigree of product information and electronic traceability records. On Oct. 5, 2009, 55 food-service manufacturers, distributors, and operators launched the Foodservice GS1 Standards Initiative outlining the adoption of a common timeline for implementation of GS1 global standards for company identification, item identification, and product description.

Electronic record keeping is a central element of the BioTerrorism Act and all food companies regardless of size must comply with regulatory chain of custody conditions. Among other things, in the event of a recall, it mandates that a company be able to provide a complete chain-of-custody of a tainted product within four hours or face fines and penalties. This rules out the use of paper records.

How can All Orders by NumberCruncher help track lot numbers?

Technology exists to ease the regulatory burden. These solutions include electronic records handling to help streamline the handling of bills of material and work orders, as well as technology such as barcodes and labels for lot traceability and expiration dates. But this technology has typically been out of reach for the small manufacturer. However All Orders by NumberCruncher provides sophisticated yet cost effective means to track lot numbers through the supply chain to the consumer and its integrated with QuickBooks.

Bill of material

A bill of material (BOM) is a list of the raw materials, sub-assemblies, intermediate assemblies, subcomponents, components, parts, and the quantities of each needed to manufacture the final product. It may be used for communication between manufacturing partners or confined to a single manufacturing plant.

A BOM can define products as they are designed (an engineering bill of materials), as they are ordered (a sales bill of materials), as they are built (a manufacturing bill of materials), or as they are maintained (a service bill of materials). The different types of BOMs depend on the business need and use for which they are intended.

An electronic BOM provides greater control over production costs. The ease in creating and editing an electronic BOM helps in maintaining product consistency and understanding product yield—the actual vs. expected product output.

In process industries, such as food manufacturing, the BOM is also known as the formula, recipe, or ingredients lists. Using BOMs ensures recipes are adhered to during production. In addition to the ingredients and yields, the BOM has production instructions and routing steps, including one that can be called quality control. You wouldn’t believe how many small companies keep their formulas and production notes on paper in a file cabinet (or in the owner’s head). Paper, or even basic Excel spreadsheet systems don’t allow companies to easily update and instantly communicate changes throughout the entire organization.

Small food manufacturers need vital inventory and order management features to effectively track inventory quantities, production, and customer orders. All Orders by NumberCruncher for has the necessary tools that QuickBooks Inventory for manufacturing and manufacturers does not have. From bill of materials for recipes to tracking expiration dates, these Small food manufacturers have the same compliance and operational requirements as larger companies. They need much, but not all, of the functional technology solutions [that are available to larger companies]. Too often this type of BOM functionality is found in costly software and hardware solutions.

QuickBooks Lot Number Tracking

Work Orders

Paper work orders do not allow production data to be shared throughout a central database. Quality processes cannot be effectively documented and saved to create standard operating procedures critical to consistent food production. The ability to save and attach the batch and lot number being manufactured ensures quality processes.

The electronic work order is used to create finished product. Each step in the work order is completed before the work order can be finalized. Too often lower-cost technology solutions lack the needed custom fields required per work order that allow the quality control checklist to be integrated with all other functions, and retained in the same database as order and inventory information.

Without the work order, the impact on quality will be significant, because the internal quality metrics cannot be documented. The work order is the internal document that manages production of a specific BOM for a specified quantity. The work order can track yields of raw materials and reworks.

Bar Codes

Just as they use clipboards to keep track of inventory levels, many small food manufacturers use a grease board, dry erase board, or a spiral notebook to track orders from suppliers, inventory, location transfers, customer orders, shipping information, work order picking, and inventory counts and adjustments. All of these can be done via mobile bar code scanning, but until now, many small food manufacturers have found this critical technology inaccessible because they were priced out of these solutions.

Using bar codes for ingredients ensures that the correct ingredients are picked and overall production efficiency increases. The level of efficiency and reduction of errors decreases by an average of 10 percent.

Lot numbers and Expiry

Expired or soon-to-be-expired raw material can be identified and made unavailable for use with many systems. The ability to track the lot and expiry for both finished goods and raw materials is essential, and lots must have customizable fields that can be used to characterize a specific lot (for consistency, acid level, and other metrics). Having this information on the lot level can vastly improve quality. For example, knowing the consistency specific lot may require production to add more or less water to the batch.

QuickBooks Lot Number Tracking