How Manufacturing ERP Streamlines Lot Tracking

Lot/batch tracking is an important process for ensuring quality, most commonly for trace and recall purposes.


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Having a manufacturing ERP system for lot tracking is critical to companies that need to follow strong regulations and strict quality standards – generally in the food, pharmaceutical, electronics, avionics, defense, automotive and similar industries.

What is Lot Tracking?

A lot is one batch of some item. 

  • For example, when some item is purchased, then a new, unique, stock lot number (aka “a batch number”) is given to identify this line on the purchase order, which was received at once.
  • Later, when looking up the items by the lot number, it is possible to find out when the items were purchased.
  • Once you manufacture a product, then the whole batch of products will be given a new, unique lot. And all lots and quantities of materials used when making the batch of products are recorded.
  • Lastly, when shipping out products to customers, the lot number, from where the items are sent to the customer, is recorded.

All in all, this process is called lot tracking.

MRPeasy - Stock Lot

Manufacturing ERP and Lot Tracking

There may be many different people involved with the handling of products and materials. Usually, at each point of handling, lot codes must also be recorded.

Using paper and pen, or Excel, is very time-consuming and a sure recipe for disaster, since a small mistake in tracking can cascade into massive problems for the whole company.

A manufacturing ERP, which ties the various operations together into a single platform, greatly automates the whole lot tracking process, usually thanks to the following abilities:

  1. Automated lot management, which is a core part of inventory and warehouse management.
  2. A single source of truth – the ability to follow lots through all different processes, from purchase receipt, use in production, warehouse movements, sales and shipping.
  3. Automatically managing the usage of items according to FIFO or FEFO principles, which saves time, prevents confusion and minimizes data-entry.

The Lifecycle of a Lot

What does lot tracking look like with Manufacturing ERP?

  1. For example, when receiving goods, the stock worker can simply print out an automatically generated, unique label to stick on the box of received items, which identifies the specific lot.
  2. Then, when the next handling operation takes place, e.g. moving items to the shop-floor, the next worker only looks into the ERP system to see what his/her task is, what materials he/she must pick, which lot and the storage location.
  3. When production is finished, the new, unique labels are stuck on the products and stored in the warehouse.
  4. Once products should be picked from the warehouse and shipped to the customer, again, the warehouse worker can pick the products from stock according to the instructions from the manufacturing ERP.
  5. For double-checking, workers may even use barcode scanners to ensure they are handling the right items and get instant feedback from the manufacturing ERP.
  6. And if necessary, it is always possible to manually intervene and tell the software which lots were actually used, if for some reason the originally planned lots are not available for use.

Making a Product Recall

When you find out that there was a problem with some lot of materials, you can easily pull a report that tells you:

  1. Which lots of products used these specific materials
  2. Which customers received the affected products

Or, if you later find out that there were issues in the production process, or you have found that there’s an issue with a specific lot of products, you can pull another report that tells you exactly which customers received those products.

Based on those reports, you can pinpoint which customers to contact.

You may also like How MRP System Improves Purchase Planning.

Investigating the Root Cause of a Defect

When a customer returned a defective product, you pull up the lot tracking report to see exactly when the production operations were performed, on which machines, who did it, which lots of materials were used and all other relevant information.

This information can direct you to the root cause and possibly even identify other products that could be affected by the same issues.

Furthermore, if while inspecting the defective product you find a specific part that failed, it is easy to track down when and from which vendor it was purchased. Then, you can ask for a replacement and, at the same time, help your vendor identify issues in their production processes so they can improve their product quality and consistency.


Small to medium-sized manufacturers must push to remain competitive with larger players in the market – those who have many resources to implement complex and expensive ERP systems. The decisions they make must focus on production, quality and effectivity. Cloud-based, agile, flexible and accurate MRP and manufacturing ERP software exists that can help navigate these difficulties and place SMBs on par with larger competitors by automating critical functions.

If you would like to know more about MRP/ERP systems available on the market and get tips for choosing one, go over our comprehensive list of the Top Six Manufacturing ERP Systems for Small Manufacturers.