Why is a Lot Number Important?
As your small business grows, there is always more and more information you need to keep track of. Information tracking is not only important for your business itself, but it is also important for business relations, such as those with customers, investors, and buyers. As you gain more popularity and a larger customer following, you’re likely going to see growth in sales and customer demand, which means your stock will expand as well. As the stock is mainly kept in warehouses and storerooms, the more you have the more spaces you’ll need to house company products. So when you have a larger inventory, you need more warehouses, and when you have more than one warehouse, you need lot numbers. You may be asking yourself why a lot number is important and the answer always comes back to keeping track of your business, products, and information.
The Importance of Lot Numbers
It may seem like warehouses are just the spaces where you hold inventory, and while this is true, there is certainly more to them than that simple description. In addition to being a holding space, the warehouse acts as a specific house for your inventory. This means that while they may be the same products, they vary because of where they came from (meaning which holding space they come from) and where they are headed. Not making sense? Think of it this way:
Say your business sells and distributes food products like lettuce, canned soup, or yogurt. Now, imagine that a certain batch of this food product has been released to the market and is subsequently making consumers sick. Maybe there was some sort of contaminate in the food, or else some issue during production and packaging. Now that you know this product needs to be recalled, where do you even begin? How do you know which products are affected and which are not? How do you know where the contaminated products ended up? The answer to all of these questions is with lot control, or more specifically, lot numbers.
Having a lot number in place for each of your warehouses and storerooms gives you some specification when it comes to your products, where they come from, and to where they have been distributed.
What Exactly is Lot Control, Then?
Lot control refers to the concept that pieces of inventory can always be traced back to their warehouse and group of origin. The term “lot” simply means the batch or group of the inventory that was received by, shipped from, or stored in a certain warehouse. The way you determine lots depends on how you divide your inventory. It could be by categories such as materials used in production and use, or even expiration dates. Whatever way you determine a lot, this grouping is then used to keep track of your inventory so that if anything happens, like an issued recall, you know how to track and trace the items in question. Lots are most commonly controlled by being issued a certain number to help with tracking.
Of course, assigning a lot a number to keep track of it sounds simple enough, but things can get confusing the more lots and inventory your business is responsible for. This brings us back to why a lot number is so important. The more inventory you have, the wider your distribution radius, and the higher your demand mean that you should have complete control over your products from the moment they are delivered to the warehouse to when they reach the stores or specific customers.
Some Reasons Why a Lot Number is Important
There are a lot of reasons why a lot number is important. Aside from helping avoid recall crises, lot numbers also help with inventory management. When you use a cloud-based inventory management system, you are able to control and manage both your inventory and multiple warehouses, giving you some advantage when you also use lot numbers for lot control. Inventory management is one of the most important parts of your business because it ensures that you have the right amount of stock at all times. There’s really nothing more frustrating to a customer than to find a product that they want is out of stock and when this happens, they’re sure to move on to the next business to get what they need. Inventory management makes sure that you never over or under order products so that your warehouse(s) are always stocked well and ready for customer demand. When you add lot numbers into the mix, you gain even more precision with ordering, shipping, reception, and restocking. Some other reasons to have a lot number include:
- Recalls: Remember our scenario of the contaminated food products from the beginning of the article? Well, the reality of a recall is more likely and common than you might think. If this ever happens to you, you want to ensure that you are on top of the situation as quickly as possible. Whether people are experiencing illness or dealing with a faulty product, you don’t want such items to be on your site, in stores, or in the hands of customers, negatively affecting them for long. So if (and perhaps when) a recall needs to be issued, you’re going to want to have lot numbers in place to help manage the problem. What’s more, when you use an automated system for inventory management you can be alerted immediately to lot information, so you can have everything under control in record time.
- Product Differentiation: If your business handles products with slight differentiations in color, feel, size, or other criteria, lot numbers for product differentiation are a must. they help you keep track of products that are the same, but a little different as well as ensure that certain materials that don’t match or are dissimilar are not mixed up. Even if some products are incredibly similar, a lot number gives you some extra differentiation so that you can tell them apart and distribute the right items to the right places.
- Expiration Dates: For businesses who sell food and drinks, this is especially important. You want to ensure that food and drink products are shipped from the warehouse well before their expiration date approaches so that you’re sending out a safe and prime product. Thanks to lot numbers, you can also be alerted if an expired product stays in your warehouse for too long so that you can dispose of it, order more, and keep your inventory fresh.
Lot Numbers and Inventory Management
If you’re looking for a way to get a better hold on lot and inventory management, you will want to try out an automated system. Finale Inventory provides small and growing businesses with an excellent system that covers everything from order management to warehouse management across multiple channels. In short, it helps you keep track of your entire business from your computer or the palm of your hand, giving you incredible ease of access and control management. To get started with Finale Inventory, you can visit the main site to begin a free trial, check out pricing, or take a video tour to learn more about how this cloud-based system works for you and your business.
Bottom line, if you’re still wondering why a lot number is important, we hope that these reasons and more will help you grasp the full scope of why a detailed management system is better than one that doesn’t take everything into account. As a small business owner, you want your business to flourish and grow, and we can guarantee that something as simple and necessary as using lot numbers can help you reach this goal.