Inventory of Ideas and Comments
This section of our web site has been dedicated to the concept of sharing new information on our product, the industry, and general observations on inventory management over the years. There are a lot of unique ideas in here. Please enjoy.
Creative Ways to Deal with Lot Tracking in Your Warehouse
If you’re a distributor or manufacturer and lot tracking is heavy on your mind these days, then this article is for you. I know lot tracking requirements can be very difficult to plan for and implement. Especially since the world around us wants faster and more accurate traceability and recalls. The biggest question that will drive the strategy your organization uses is this:
How much additional labor are you willing/able to incur?
Lot tracking brings extra work to an organization that may already be suffering from slim profit margins. Full lot tracking can kill a company’s bottom line. I recently spoke to the president of a customer that deals with recalls for pet food products. His organization is currently dealing with 2 recalls of food product manufactured by an outside vendor. As he can tell you, dealing with lot tracking compliance and recalls with the minimal impact to labor and expenses is the holy grail of competitive advantage for these organizations. The point is that not only does each distributor’s process vary, but each product that is tracked should be analyzed to determine the best way to track it. That is what this article is really about; how to categorize products and processes that best fits the operational process to the optimal method for tracking lots.
Assuming you need to track which customers receive a given lot number, here are a few questions to ask yourself as you go through the process of evaluating the appropriate tracking method for each product/location:
How often does a specific product/bin location contain only 1 lot number?
How many different lot numbers exist at this location on average at a time?
How often do I replenish new lots to this location?
What percentage of my saleable units are barcoded with lot numbers?
Do a majority of vendors have lot tracking information barcoded for receiving?
Can I effectively replenish new lots to a location with other lots in FIFO (first in, first out) order as with flow racking or other techniques? How long would it take to add a new lot to this location?
Is shelf life important to your organization and customers?
Lot Tracking Optimization
Here I present 6 configurations to support different variables for bin/item lot tracking.
1) Single Item/Lot per Location
- a. License Plate Level – Users scan the license plate on container to determine lot and item information. Containers can be placed in a bin location along with other Item single lot containers. The advantage here is that by only scanning the LP barcode, the warehouse management system can determine the lot number that is being picked. The lot number can either be embedded into the barcode, or the warehouse management system can look up the lot information for this particular item.
- b. Bin Level – Users can scan the bin location and item barcode and the warehouse management system can look up the current lot number for this location and stamp it on the pick records for an order. All movements to and from this location would require tracking and validation to force 1 lot per bin.
2) Mixed Item Lots per Location
- a. Prompt for Lots – When picking, user scans bin and item. A WMS system can pull lot numbers from database for item lot information for the pick record. The user can select from the screen the lot number that matches the item being picked. The system can use the lot numbers currently in inventory.
- b. Lot Number Barcodes – Each picking unit is labeled with Item and Lot Number barcode.
- c. FIFO Lot Defaulting – When a pick occurs, it automatically uses FIFO back-flushing. Flow racking is a goes well with this technique.
- d. LIFO Lot Defaulting – When a pick occurs, it automatically uses LIFO back-flushing. Process coordination between replenishment and picking will require more care to be taken to stop other operations while a replenishment task is occurring.
Once you have analyzed these product/bin combinations, you can start fitting each into the appropriate technique of dealing with it. In the magic quadrant diagram below, you can see that the rate of change in lot numbers and the rate of replenishments can plan a major role in selecting the configuration that works best. In this diagram I represent the labor in related to a technique by the size of the dot.
Planning for optimal lot tracking is both a science and an art. It requires careful planning and the most important consideration is agility. Your organization needs to adapt quickly to different combinations of product velocity and rate of change in lot numbers to turn the downside of additional labor for lot tracking into a competitive advantage. Ask the experts at Appolis; creators of WithoutWire™ (WoW) Warehouse Management Solutions, how you can optimize your automated lot-tracking solution today!
By Travis Smith, CTO/Founder – Appolis Inc.