Lot number

A lot number (also called a batch number) is an identifier shared by a group of units that were produced, manufactured, or received together. All units in the same lot share the same production date, raw material batch, and quality characteristics.

It's the answer to the question "if we discover a problem, which units are affected and where are they?"

For categories where traceability matters — beauty, food, supplements, pharmaceuticals, certain industrial categories — lot tracking isn't optional. Regulators require it, retailers expect it, and the brand's reputation depends on being able to act fast in a recall.

What lot numbers are used for

Three primary use cases:

• Recall and quality response. A defect is discovered in lot 2026-04-A. You can identify exactly how many units are affected, where they are (warehouse, in transit, on customer shelves), and pull them back. Without lot tracking, a recall becomes "all units of this SKU" — much more expensive.
• Expiry management. For perishables, lots have expiry dates. Lot tracking enables FEFO (First Expired First Out) so you ship the oldest units first.
• Quality investigation. When a problem surfaces (customer complaint, in-warehouse defect), lot data tells you whether it's an isolated case or a batch-wide issue.

Plus secondary uses:

• Supplier accountability. Tying defects back to the specific batch and supplier production run
• Compliance documentation. Required by FDA, MHRA, and equivalent regulators for many product categories
• Customs and customs disputes. Some imports require lot-level documentation
• Cost-flow integrity. Lot-level cost tracking can replace FIFO and weighted average cost approximations

How lot numbers are assigned

Two patterns:

• Supplier-assigned. The manufacturer prints a lot number on each unit (or master carton). You inherit and track it.
• Receiver-assigned. You assign your own lot number at receipt, often combining supplier batch info with date/PO context.

Most consumer brands inherit supplier lot numbers. The receiver-assigned approach is common in regulated industries where the brand needs control over the lot identity.

A clean lot number includes:

• Production date or year-month code
• Batch sequence within the date
• Optional facility or line identifier

Example: 2026-04-A-002 (April 2026, batch A, second sequence). The exact format varies; consistency within the brand matters more than any particular convention.

Lot tracking vs serial number tracking

Different granularity:

• Lot number — identifies a group of units (could be hundreds or thousands)
• Serial number — identifies an individual unit

Lot tracking is sufficient for most consumer goods. Serial tracking is overkill for most categories but essential for high-value, regulated, or warranty-tracked items (electronics, medical devices, luxury watches).

You can implement both — lot at the group level, serial at the unit level — but the operational overhead doubles.

Lot tracking and FEFO

For perishables (beauty, food, supplements, batteries), lot numbers carry expiry dates. The shipping discipline is FEFO — pick from the lot with the earliest expiry first.

This requires:

• Lot-level visibility in the warehouse system
• Expiry date stored with each lot
• Pick logic that prioritises by expiry
• Alerting on lots approaching expiry

Without lot-level visibility, FEFO is impossible — you might be shipping the freshest stock while older stock expires on the shelf.

Where lot tracking breaks

Three common failure modes:

• Receipt without lot capture. The unit physically arrives with a lot number printed on it; the receiving team scans the SKU but skips the lot. Lot data is then absent for the entire batch.
• Lot data captured but not used. Lot is in the system but pick logic ignores it. FIFO or random pick happens; FEFO is theoretical.
• Lot mixing in a single bin. Multiple lots of the same SKU stored in one bin without sub-segregation. Pickers can't differentiate; lot integrity breaks.

The fix involves both process discipline (always scan the lot at receipt) and physical organisation (single-lot bins, or clearly labelled multi-lot bins with deliberate pick logic).

Lot tracking in recall scenarios

A real recall sequence:

1. Quality issue identified — a customer complaint, a regulator notification, an internal QC finding
2. Affected lots identified via the batch records
3. Lot-level inventory query: how many units in which warehouses? In transit? On shelves at retailers?
4. Recall scope and notification: customers and retailers contacted with specific lot numbers
5. Returns processed against the affected lots; non-affected lots continue to ship normally

Without lot tracking, step 4 becomes "the entire SKU" — orders of magnitude more recall volume, more brand damage, more cost.

When lot tracking is overkill

For categories that don't have:

• Expiry dates
• Regulated traceability requirements
• Quality variation that's batch-driven
• High recall risk

...lot tracking is administrative overhead without proportional benefit. Most fashion and homeware doesn't need lot tracking. Most beauty, food, supplements, electronics, and industrial categories does.

The decision should be deliberate, not default.