What is Lot Tracking?

Lot tracking (also called lot tracing or lot control) is an inventory management practice that assigns a unique lot number to a group of products that were manufactured, processed, or received together under the same conditions. This lot number follows the products through the entire supply chain—from receiving at the warehouse through storage, picking, shipping, and delivery to the end customer. Lot tracking creates a complete audit trail that enables businesses to trace any individual unit back to its production batch, supplier shipment, or receiving date, which is essential for quality control, regulatory compliance, and efficient recall management.

Why It Matters

Lot tracking is mandatory in regulated industries such as food and beverage, pharmaceuticals, cosmetics, and supplements, where government agencies (FDA, USDA, EU food safety authorities) require full traceability for consumer safety. If a quality issue or contamination is discovered, lot tracking allows businesses to identify exactly which products are affected and where they were shipped, enabling targeted recalls rather than costly blanket recalls of all inventory.

Even for businesses not under regulatory mandates, lot tracking provides valuable operational benefits. It supports first-expired-first-out (FEFO) picking strategies for perishable goods, helps identify supplier quality trends by correlating defect rates with specific lots, and provides documentation for warranty claims and customer disputes. As consumer expectations for product transparency increase, lot-level traceability also supports brand trust and accountability.

How It Works

Lot tracking is implemented through systematic identification and recording at each stage:

• Lot Number Assignment: When goods are received at the warehouse, a unique lot number is assigned to each batch. This number typically encodes information such as the supplier, receipt date, production date, or purchase order number. Some businesses use supplier-assigned lot numbers, while others generate their own internal lot identifiers.
• Storage and Bin Mapping: Lot-tracked inventory is stored with bin-level granularity, linking each lot to specific warehouse locations. This ensures that when a pick order is generated, the system can direct pickers to the correct lot based on FIFO, FEFO, or other prioritization rules.
• Order-Level Lot Recording: When products are picked and shipped, the lot number is recorded against the order and customer. This creates the downstream traceability needed for recalls—if lot #2024-0815 has a quality issue, the system can instantly identify every customer who received items from that lot.
• Recall Execution: In the event of a recall, lot tracking enables surgical precision. Rather than recalling all units of a product, the business identifies only the affected lot(s), locates remaining warehouse stock for quarantine, and notifies only the customers who received items from those specific lots.

How Nventory Helps

Nventory provides built-in lot tracking that assigns and records lot numbers at receiving, tracks lot-level inventory across all warehouse locations, and records lot information against every outbound order. Barcode scanning at receiving, picking, and shipping ensures lot data is captured accurately without manual data entry. When a recall is needed, a single search by lot number reveals all affected inventory locations and customer shipments, enabling rapid, targeted response.