Technology March 13, 2014 Last updated September 18th, 2018 1,479 Reads share

Stock Traceability: Friend or Foe?

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You may not feel that Stock Traceability applies to your business, but sectors such as the Pharmaceutical and Food industries depend on it, and other organisations are now adopting traceability as best practice.  So whether it is by law or process, Stock Traceability is becoming more the norm.

Making sure that you have 100% traceability leads to an effective supply chain or warehouse management solution, with minimum effort placed on your staff. Businesses with a requirement for a dynamic supply chain need to be in the position where if a stock item is ‘recalled’ that they can correctly identify the delivery point.

How would your company benefit from the correct implementation of stock traceability procedures?

Control Sell and Use by dates, at the point of Goods Receiving

  • Batch Tracking incorporates the management of dates – these can be sell and use by dates or a combination of both.  You can set controls on your system to enforce the business rules on what dates are acceptable.
  • All stock movements must be recorded with these dates along with identification or batch numbers.
  • Stock fulfillment can be based on Use, Sell, FIFO (oldest first), and / or other attributes.
  • The operation can control duplicate batch numbers when receiving goods into the warehouse if this is a requirement.

Correct allocation of stock to orders

  • Stock can be allocated through order entry or at dispatch level.    This will be dependent on the business processes implemented.  But the batch allocated to the order, can be amended at various stages.
  • You can restrict the warehouse picker, to pick from one batch, opposed to multiple batches, as some customers may not accept multiple batch references.  This will be of importance in the food industry with very tight expiration dates.

Management of recalls

Implementing points 1 and 2 will allow easy ‘recall’ of any product through the system.  A manufacturer has to ensure when they issue a recall to the supplier, they can pinpoint in their records all relevant data where the batch was delivered to.

Cost methodology

Systems provide multiple costing methods such as Standard, FIFO, or Average but if you have batch tracking in place, you also have the option to use Actual Costing.  This will give you accurate posting to the financial systems when reconciling your Stock Valuation back to the Stock Balance Sheet.

Serial tracking

  • Serial Tracking is a higher level of traceability and normally only used for large valuable items such as white or electrical goods.
  • A single serial number is assigned to one stock item quantity.

Bill of Material (BOM)

A company that distributes a product from one source to another, needs to track the batch number and other details, but a manufacture has a further complex issue in that they must record raw material batch details, and generate an internal batch number for the finished product.  This is the number that goes into the supply chain that distributors follow.  This process needs to be efficient and accurate.

If you would like to know more about Stock Traceability or how to improve your relationship with your supply chain, please leave a comment below and I’ll get back to you ASAP!

Images: ”Worker Using Tablet Computer In Distribution Warehouse /


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Stephanie Davies

Stephanie Davies

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