As an ecommerce seller, your products are distributed across multiple sales channels and fulfilment centres, making it a challenge to keep track of your inventory. Adding to the complication, some products need more specialised storage and tracking, such as products with expiry dates, multiple components, and regulated products. As you don't want to be stuck in a scenario where the health and safety of your customers are concerned and you have to identify the root cause to take corrective measures.

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That’s why it’s crucial to have an inventory tracking system that can help you trace where batches of products came from and where they are stored. The most common and efficient way to do that is through batch tracking.

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In this blog, you will learn what is batch tracking, which products require batch tracking, why is batch tracking is essential for an ecommerce business, and how to implement a batch tracking system using the best practices.

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What is batch tracking?

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Batch tracking, also known as lot tracking, is a system used to trace products using batch numbers, including parts or ingredients associated with a group of products, in the entire distribution chain— the manufacturer or supplier, fulfilment centre, and the customer.

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From raw materials to finished goods, batch tracking enables you to know where your inventory came from, where they went, how much inventory was shipped, and when your inventory will expire if it has an expiration date. Thus, batch tracking is used to organise your inventory by production or expiration date that provides real-time visibility into your inventory and enables strategic decision-making.

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Which products need batch tracking?

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Batch tracking can be applied to all products, but it can be expensive as each batch needs separate storage space and can’t be stored with other batches of the same product.
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There are some products for which batch tracking is essential:

• Food and beverages (F&B)
• Cosmetics
• Vitamins and supplements
• Medical supplies
• Household cleaners
• Certain electronic devices
• Nutrition and wellness products

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Why is batch tracking important to inventory management?

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Batch tracking helps ecommerce businesses to keep inventory organised, ensuring a certain batch of products is fulfiled first. Here are some benefits of batch tracking:

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1. Increases efficiency
   Batch tracking gives you a real-time snapshot of your entire inventory. You don't have to waste time wandering through the fulfilment centre wondering where you put an item from a specific batch or a product component. For instance, you received a toolbox with 100 pieces in the warehouse from a supplier. With batch tracking, you can easily find all its components in the warehouse by simply looking into your inventory data. Thus, it enables you to gain greater control over your inbound and outbound processes.
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2. Reduces wastage
   Batch tracking enables you to organise your inventory based on your requirement. For example, if you have products with expiry dates, batch tracking can help you identify their shelf life so that you can ship them out first. This will result in less spoilage, obsolescence, and losses.
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3. Improves quality control
   Keeping a tab on your inventory means managing expiration hassles, breakage, and supplier issues. With full traceability, you can identify the root of quality issues based on source, batch, or transport paths. For instance, which manufacturer sent you the damaged inventory, which particular batch has similar quality issues, or if the inventory shipped specifically through airways has spillage. Thus, this will ensure that these problems don't reach your customers.
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4. Enhances health and safety
   Batch tracking ensures that only fresh products reach your customers. This means no risk of expired products which can compromise the health and safety of your customers. Moreover, if you send fresh stock to your customers, you can create a positive and creditable brand image.
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5. Helps in ensuring compliance
   In industries like food and beverages (F&B), pharmaceuticals, the regulatory bodies have extremely rigid guidelines that you need to follow with regard to distribution, storage, sales, and supply. With batch tracking, you can stay on top of compliance by tracking and recording end-to-end supply and distribution.
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6. Eliminates human error
   Batch tracking eliminates the need to track inventory manually, so you can avoid common picking mistakes, such as shipping out an incorrect product component. Thus, it also helps with improving order accuracy.
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7. Helps in managing warranties
   Certain products entail a manufacturer's warranty, such as electronic appliances. For this, your warranty management must be up-to-date and must be easily available for reference. Batch tracking can help you keep track of such warranties according to time frames, serial numbers, manufacture dates, and condition of goods.
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8. Provides advanced reporting
   Batch tracking can help you with advanced reporting by providing real-time and accurate data, such as customized batch-specific reports from your warehouse. For example, you can identify what batch of inventory is causing more returns and not meeting customers’ needs. Additionally, batch tracking allows you to conduct inventory audits and warehouse audits more efficiently.
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9. Helps in managing product recalls
   In case of product recalls, you must act quickly. By reliably tracking products based on specific attributes, you can trace which products or batches are recalled, when were they produced, and where they are currently stored. This will help you quickly remove faulty batches from your fulfilment centres before more items are shipped to the customer.

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Best practices for batch tracking

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Batch tracking can improve both your inventory management and order fulfilment. Here is an overview of the best practices of batch tracking you need to consider:

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1. Fulfil orders at batch level
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Finding the best way to manage your inventory efficiently is crucial for every product-oriented business. The strategy you will choose will have profound effects on your profitability. FIFO (First In First Out), LIFO (Last In First Out), and FEFO (First Expired First Out) are some common inventory methods. If your products have expiry dates and need batch tracking, you can use the FEFO method in which the product with the closest expiry date moves out first.

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For instance, you sell fruit juice online. Your inventory comprises of three batches based on the expiry date of the products:

Batch A: Expiry date is January, 2022
Batch B: Expiry date is July, 2022
Batch C: Expiry date is November, 2021

In this scenario, it would be best to ship out Batch C first when you receive orders.

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2. Use a barcode scanning system

You can reduce manual work is by tagging every batch with a barcode using an inventory scanner system. This method will help you avoid time wastage as you don't have to manually input data for every batch. Moreover, you can save on labour costs and reduce human error while speeding up the entire fulfilment process.

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3. Leverage a distributed network of fulfilment centres
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After batch tracking, you can split your inventory across multiple fulfilment centres and fulfil your orders fast. It will enable you to save on crucial time, especially with F&B products which expire soon, such as juices, muffins, and more.

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Bottom line

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Batch tracking can empower you with advanced traceability and control over your inventory. Strategic implementation of batch tracking will not only help you to optimise and improve your warehouse processes but also improve your profitability. By accurately tracking inventory on the batch level, you can increase efficiency, reduce wastage and build business credibility in front of your customers.