What is Lot Management?
Lot management is the act of tracing stock lots. Usually, lot management is carried out based on batch, expiry date, and date of entry/exit from the warehouse.
Some of the products that need lot management include foods and beverages, household cleaners, medical supplies, cosmetics, and many more.
Significance of Lot Management in E-commerce Logistics
Lot management is a crucial step that helps keep large inventories organized and provides extra control over inventory. Here are some benefits of lot management:
- Lot management ensures the proper traceability of the items.
- It helps businesses to optimize supply chains by keeping real-time tracking information.
- With lot management, one can conduct easier product recalls. This is because lot numbers assigned in lot management help sellers pinpoint a specific defective item if the need arises.
- Lot tracking eliminates manual errors and improves order accuracy.
Prerequisites for Lot Management and How It Works
To carry out lot management, companies need to fulfill the following:
- Creation of lots or a group of products based on a common factor, like production date
- Lot number
- Database with basic product information like expiry date and manufacturing date
- Inventory management software or scanner
Once these prerequisites are fulfilled, lot management is carried out by using software or scanners. You can scan the lot numbers assigned to each lot and, track their movement in the supply chain.
Use Case with Lot Management
For instance, a beverage company receives a complaint that a bottle of orange juice has passed its expiration date. Subsequently, the company receives the lot number of the said bottle, enters it into its system, and traces the entire lot that the bottle belonged to. Ultimately, they recalled the entire lot since all the bottles in that lot shared the same expiration date.
In this way, lot management helped the company recall its products in a simpler and time-saving manner.