Introduction to Lot Traceability

In 2023  Apple, the biggest company in the world,  decided that by 2025, it will only use recycled cobalt. It has also set ambitious targets to use only recycled material in all its products. Not just Apple, many large and small companies are setting goals to not use virgin material and use only recycled material. They say, it is good for mother nature, good for the customers and good for them as a responsible company. 

If you are supply chain manager of Apple, how would you ensure that this promise is actually kept. The supply chain of Apple is very complex and goes through hundreds of suppliers and across continents. Apple would require its suppliers and its supplier’s supplier to adhere to this promise if they have to do business with them. They will need to create a system where each material is traced. 

To solve this problem, manufacturers will have to implement elaborate traceability systems. Each SKU that comes into its factory will need to be traced with an identification. This identification is called Lot or Batch or Bundle ID and the entire system that facilitates traceability is called Lot Traceability in Manufacturing. 

Benefits of Lot Traceability in Manufacturing

Lot traceability is cumbersome. It will require dedicated resources and hence it is important that the organisation is ready and convinced about the benefits of Lot Traceability in Manufacturing. Some of the benefits of implementing Lot Traceability in Manufacturing are:

1. Customer Satisfaction and new business: As a manufacturer, if you have the ambition of being a part of the global value chain, then it is important that you adhere to the rules and regulations of the game. Fortune 500 companies and their suppliers have very stringent compliances. By implementing Lot traceability, you can show that you can be trusted and you are changing with the changing world. 
2. Quality Control and Assurance: Once lot traceability is introduced, manufacturers would benefit from better quality control and assurance. If during testing (in process or inward or outward quality control), it is found that a particular item is faulty and it can be traced to a particular lot of a vendor, then all the items produced from that particular lot can be traced and isolated. They would have to be reworked. The cost burden of fixing it would lie with the manufacturer and this burden would be reduced if proper lot traceability is implemented in the organisation. 
3. Regulatory Compliance: Industry bodies in different countries demand that there be set procedures related to call backs. These callbacks are extremely expensive and companies like Ford, Apple, Sony would want that these callbacks be  extremely targeted i.e. only those customers who are impacted should be informed. Lot traceability helps in regulatory compliance

Key Components of Lot Traceability Systems

Lot traceability is not easy to implement. Organisations that are determined should venture as it would require discipline from all stakeholders including management, store, supervisors, IT etc. Here are the different components of Lot Traceability:

Lot Numbers and Batch Codes: Any material that enters or gets processed or goes out needs to have a lot number or batch code. Organisations will need to create a nomenclature which could be a function of the supplier code/ project code/ inward item code. 

Data Collection and Management: This lot number and batch code data then needs to be collected and stored in a proper format. While doing this, following points need to be take care of:

• There has to be a unique code of every batch. No two batches or lots can have the same code
• An item may come from the same supplier but in different lots. So it is not ok to just write 100kg from Supplier X. If this 100kg is in bundles of 10, then there will be 10 different entries and not just one
• It is important to determine whether each item will have its own code (serialisation) just like Printed notes or a bunch of items would have its own unique code – Lot Id/ Batch Id/ Bundle Id
• Lot id of supplier should be stored along with the internal code

Software and Technologies: To make it easier, following points should be considered:

• Database that can handle large amounts of data as a typical organisation will generate hundreds of lots in a single day and very soon the amount of data would become enormous
• Implementation automation as much as possible: from generation of code to weighment to splitting codes (bundle) should be automatic rather than dependent on humans 
• Good search functionality where any bundle id can be entered and entire genealogy comes up. 

ManufApp’s Manufacturing Execution System is designed to handle such complexities. ManufApp has been working with Electronic, Food, Electrical, Auto Component manufacturers and understands the implementation challenges. It is one of the few Manufacturing software companies that can bring ease to the life of the manufacturer. 

In this article, we have covered a few aspects of Lot traceability in manufacturing. However there are more that needs to be discussed like what are the things to remember while implementing Lot Traceability,  steps to implement a traceability system, best practices, common challenges and how to overcome them. 

We would also like to discuss in a separate blog on what are relevant standards (e.g., ISO, FDA, GMP) and the related compliance requirements and audits

We will discuss the case studies and real-world examples of lot traceability, success stories in various industries, lessons learned from traceability failures. 

Lastly we will discuss future trends in lot traceability, what are the emerging technologies (e.g., Blockchain, IoT) and the predictions for the Future of Traceability.

Summary: Lot traceability is important to ensure full traceability in a manufacturing unit. It is the demand of all big companies and hence of the entire supply chain in some time. Organisations need to fully understand the importance of traceability and the challenges related to implementing it. A good software like ManufApp will facilitate easy implementation of this entire system and empower the sales and business team to get new orders.