Serial Number Tracking in Manufacturing

Knowing the location and details of materials, components, and products as they move through inventory and the shop floor is important for any manufacturing company. Serial number tracking is one of the essential tools for ensuring traceability in manufacturing.

serial-number-tracking

What is Serial Number Tracking?

Serial number tracking is an inventory and warehouse management function that gives companies control and visibility over inventory items and their movements. Depending on the use case, serial numbers can inform on a wide range of metrics about a serialized item such as its purchasing, delivery, manufacturing, or expiry date; storage location, manufacturing routing, etc. Tracking serial and lot numbers greatly increases control over the business by enhancing the traceability of inventory.  

Serial and lot numbers can be tracked from the moment they enter the company’s supply chain or are created in workstations, to the moment they leave manufacturing as finished goods. Tracking can also be helpful later on in the item’s life cycle for simplifying warranty returns, assuring the quality and authenticity of items, protecting against theft, and more. Most manufacturers favor using dedicated traceability software as manual tracking can be time-consuming and inaccurate.

In modern manufacturing, supply chains can stretch across the world and include many intermediaries. Alongside a growing global emphasis on assuring customer satisfaction as well as regulatory constraints, this is why traceability is becoming a key requirement for manufacturers across diverse industries. Lot and serial number tracking forms the basis of traceability in inventory management and helps to assure quality, stay compliant, and handle recalls.

Lot Numbers vs. Serial Numbers vs. SKUs

While similar in nature, there are distinct differences between serial numbers, lot numbers, and SKUs. Let us quickly go over their respective differences to clear things up.

  • Lot numbers are unique identification numbers that are assigned to batches or groups of items. Used mostly in batch production operations where a group of identical items exits a workstation together, a lot number helps to identify a single batch or group of items. The lot number can designate information like production date, workstation used, vendor credentials, ingredients, etc., but does not differentiate between items in the batch. Lot numbers can be assigned from the moment of purchase in case of sourced items, or when they are manufactured in a workstation.
  • Serial numbers, on the other hand, are always assigned individually per item. Even if two serialized items are identical and manufactured at the same time, their serial numbers will be unique. Assigning and tracking serial numbers is particularly useful in highly regulated industries like medical devices and pharmaceuticals, automotive, electronics, etc., or in cases of diversified product variants. Good examples include IMEI codes for smartphones or VIN codes for automobiles. Most manufacturers employ dedicated software that integrates serial numbers with the manufacturing process. Solid manufacturing ERP systems allow assigning serial numbers manually, importing them from procurements, or creating them automatically within manufacturing orders.
  • An SKU, or stock keeping unit, is another unique identification number that differs from serial and lot numbers by one important distinction. Namely, an SKU designates the type or variant of an item or product but not the individual item itself or its source batch. Every different product or component that a company uses in manufacturing or produces, has a specific SKU but all of the products of that type have the same SKU. For example, whilst all smartphones of the same model and variant have individual IMEI codes (serial numbers), they all share an SKU. SKUs are usually created in-house and assigned to all types of inventory items using SKU generators.

Read more about Stock Keeping Units

Benefits of Serial Number Tracking

Tracking is not only useful for identification but can considerably enhance production and after-sales processes. Next, let us take a look at the main benefits of serial number tracking in manufacturing.

  1. Organized inventory. Tracking serial numbers can greatly assist in keeping inventories and the shop floor organized. Each serialized item’s movements are logged along with information on when, where or from which vendor it entered the system, which workstations it passed through, where it was stored, etc. This is particularly useful for complex products with multiple parts or sub-assemblies manufactured by subcontractors. Serial number tracking also helps to keep the warehouse organized as physical inventory can be marked and sorted according to serialization.
  2. Quality assurance. Tracking serial numbers enables easily managing warranties, insurance claims, and repairs per individual item. If a fault is detected in a product, tracing back the item’s history enables identifying precisely what went wrong, where, and why. This helps to identify the root causes of issues related to product non-conformity and whether they occurred on the supplier’s side or in manufacturing. As not just finished goods but also separate components of complex products can be serialized, tracking helps to identify and replace faulty components without having to write off the whole product. Many MRP systems also include quality control functionality making it possible to assign QC approval per serialized item or lot.
  3. Easy recalls. Serial number tracking can greatly simplify handling RMAs for both the manufacturer as well as the customers. If a company needs to issue a product recall, providing the serial numbers of affected items helps customers easily check if their purchased goods fall under the claim. Using dedicated tracking software, lot and serial numbers simplify identifying and locating products needed to be replaced or recalled in storage.
  4. Legal compliance. For certain industries, providing serial and lot numbers may be required for reasons of legal compliance. This is often the case for pharmaceuticals and medical supplies, firearms, foodstuffs (lot numbers that include information on perishability and source of origin), etc. Many retailers also require or are legally obligated to only accept serialized items for reasons of customer safety.

Serial Number Tracking Software in Manufacturing

Effectively tracking inventory means having system-wide access to real-time data on inventory movements. Manual tracking can quickly spiral out of control because paper-and-pen or spreadsheets-based systems are time-consuming, inaccurate, and have limited accessibility. This is one of the chief reasons why many SMEs that have yet to implement inventory management software find it hard to achieve sufficient traceability in their manufacturing operations.

Thankfully, many modern manufacturing ERPs have become much more affordable in recent times and specifically cater to small and medium manufacturing operations. With this, end-to-end traceability, including intricate serial number tracking capabilities, has become a reality for manufacturers of any size. For example, MRPeasy includes comprehensive serial and lot number tracking functionalities that improve upon and automate many facets of managing the inventory.

With MRPeasy’s built-in tracking features, it is possible to individually track parts and products, their full histories, and current statuses. Serialized items’ statuses include information on whether they are on the way (planned) or received, consumed in manufacturing, booked to work orders, close to expiring, shipped, written off, etc. It is possible to assign serial numbers individually, in bulk, or by importing them from CSV files. MRPeasy also includes RMA, quality control, and version control functionalities that enhance traceability and greatly simplify meeting quality standards and regulatory compliance. Using the built-in barcode system, MRPeasy enables easy sorting of inventory to make sure that serialized items are always handy and the inventory stays organized.

With modern manufacturing ERP systems like MRPeasy, serial number tracking and end-to-end traceability are no longer a pipe-dream but a reality for SMEs.

MRPeasy includes powerful serial number tracking capabilities.

Key Takeaways

  • Serial numbers are unique identification codes that carry detailed information about inventory items and finished goods.
  • Serial number tracking is an inventory and warehouse management function that gives companies control and visibility over inventory items and their movements.
  • Tracking serial numbers is one of the main ways to elevate traceability in inventory management.
  • While technically possible manually, serial number tracking is best achieved through dedicated inventory management software.

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