Lot Tracking in ERP

As with everything else in an ERP implementation, the goals and objectives of lot tracking should be explicitly understood and agreed when designing a transaction flow. Not all ERP systems have lot tracking capability the way your process manufacturing may be used to. Because of that, you should be able to compellingly articulate the value you get from lot tracking, since at ERP software selection time, strong financial and purchasing modules might trump a weak or non-existent lot tracking system. If lot tracking is a “just in case” process (just in case you need to research something, just in case there is a quality problem, etc.) and it’s value difficult to quantify, you could end up without a robust lot tracking system. In that case, some type of work around has to be created.

Is Everyone on the Same Page?

Careful communication is required to understand the lot tracking capabilities of an ERP package, because most vendors have a good faith belief that they have strong lot tracking capability. However, unless your ERP vendor has specific experience in your industry, and thoroughly understands your lot tracking problems, you have to be cautious. There are very real philosophical differences that create performance differences.

A subtle but critical difference, for instance, is what a “lot” represents. Almost all process manufacturing defines a “lot” as all production of a single sku manufactured in the same production run. However, ERP packages that lack depth in lot tracking might stop there. In that case, the lot number represents a group of physical things comprising a total inventory quantity: a group of pallets, a group of rolls, a group of drums, a group of boxes. That lot has a genealogy comprised of intermediate lots created under the same definition. In this case, the “name” of the inventory quantity is the lot number and the attributes of that inventory are associated with that lot number. But in this scenario, there is no visibility of how many things (pallets, boxes, drums) make up that inventory quantity. In more robust lot tracking, however, each discreet piece of inventory – each pallet, each roll, each drum – receives a unique inventory name (serial number), and the lot number is attached to the serial number as one attribute (in addition to things like sku number, quantity, quality). This philosophical difference leads to cascading differences in how sales orders are written, how available to promise works, and how inventory can be managed.

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Process manufacturing covers a wide spectrum of complexity, and not every operation requires a complex lot tracking solution. The complexity of serial numbers may not be needed at all in a specialty chemical process, where homogenous quantities move in batches, but an absolute necessity in a paper or textile mill. The key question for your team to decide in advance is what priority lot tracking will have in making your ERP software selection.

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Richard Barker

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Richard Barker