Batch tracking for inventory management 

Batch tracking is crucial for effective inventory management, providing detailed traceability information and control over products in the warehouse.

In this article, we’ll explore how batch tracking works, what its benefits are, and how batches differ from lots. We’ll also provide a guide on implementing batch tracking, along with a real-world example.

What is a batch?  

A batch is a group of products that have been manufactured or processed together and therefore share similar characteristics, such as the production date and time.

These items are treated as a single unit for tracking and other management purposes. This approach is more efficient and practical than tracking every item individually, which would require significantly more effort and resources.

Oftentimes, “batch” and “lot” are used interchangeably, as both refer to groups of products. However, there is a subtle but important difference between the two concepts. 

The term “batch” is tied to the manufacturing process itself. A batch is a group of products that have been produced in a single production run. 

“Lot” is a broader term that can refer to a group of products that share some common characteristics, such as having the same expiration date. They don’t have to belong to the same batch.

How does batch tracking work? 

In essence, batch tracking is a detailed record-keeping process that enhances traceability and inventory management.  

For this, each batch is first assigned a unique identifier, usually a number. This digital fingerprint will be used to track the batch throughout all stages of the supply chain, from manufacturing to the point of sale. 

The batch number is then linked to a detailed record, which contains critical information such as: 

• Production date and time 
• Raw materials used 
• Manufacturing location 
• Expiration date 
• Quality control data  

This data is typically stored in an inventory management system (IMS) or enterprise resource planning (ERP) system. As the batch is moved, its number is recorded at each station, creating a trail that can be traced. 

For enhanced tracking purposes, the number is typically encoded in a barcode , which can be easily scanned at every stage of the batch’s lifecycle, or another data carrier.  

Batch vs. lot vs. serial number

The batch number is easily confused with the lot or serial number. However, although all are related to product traceability, they represent distinct concepts. 

• Batch number: Identifies a specific group of products that were manufactured together. Used to track the origin of the group as a whole.  
• Lot number: Identifies a group of products with common characteristics for tracking and management purposes. Its meaning depends on the context. 
• Serial number: Identifies an individual item. This enables the most precise tracking, but also demands the most resources and effort. Serial numbers are thus generally reserved for high-value or high-risk products. 

Feature	Batch number	Lot number	Serial number
Level of detail	A specific production run	A group of items with shared characteristics	A single, unique item
Relationship	one-to-many	one-to-many	one-to-one
Often used for	Quality control and recalls of homogeneous products	Expiration management	High-value products, warranties, and after-sales services

How is the batch number applied to a batch? 

The batch number is applied to the individual items in the batch, often in both human- and machine-readable form. Encoding it in a barcode enables efficient automated tracking. The accompanying text ensures humans can read it as well. 

Direct printing  

The batch number string is physically printed on the product itself or on its primary packaging. The human-readable code allows employees in a warehouse or a store to quickly reference the batch number, which is crucial quality control. 

Barcode encoding 

For automated tracking, the batch number is encoded in a barcode. Often, the symbol encodes several additional pieces of information, such as the expiration date and production date.

Barcode scanners can recognize these distinct pieces of data because they are prefixed with Application Identifiers (AIs). These short codes are defined by GS1, a non-profit organization that develops and maintains internationally recognized standards for business communication. 

This system of barcodes and AIs allows stakeholders to easily access key product information with a single scan. Whenever a batch barcode is scanned, the batch number is automatically sent to the company’s IMS or ERP system. This creates a seamless digital record of the product’s journey.  

In what barcodes can the batch number be encoded? 

Typically, batch numbers are encoded in GS1-128, GS1 Data Matrix, and GS1 QR Codes. These barcodes were adopted for supply chain traceability purposes because they can hold multiple pieces of information in a single symbol. 

All three are the result of applying GS1 standards, especially AIs, to existing symbologies – Code 128, Data Matrix, and QR Code.

• GS1-128: As a one-dimensional (1D) barcode, GS1-128 encodes data in black-and-white bars of varying widths. It was specifically designed for logistics and supply chain applications, and is now widely used for cases, pallets, and shipping labels. 
• GS1 Data Matrix: GS1 Data Matrix is a two-dimensional (2D) barcode. It can thus hold far more data than a 1D barcode. GS1 Data Matrix is often used in the healthcare and electronics industries for small products, since it can encode information in a small amount of space.  
• GS1 QR Code: GS1 QR Code, too, is a 2D barcode. While usually larger than Data Matrix codes, they are preferred for customer-facing applications, since most smartphones can read them out-of-the-box. 

Reading the codes’ special data structure requires a scanner with a built-in GS1 barcode parser.

Importance and benefits of batch tracking in inventory management 

Beyond its overall importance for supply chain management, batch tracking also has several specific benefits for inventory management.

• Stock level optimization: Batch tracking provides real-time inventory data for effective stock level balancing. By delivering accurate information on what is available and when it needs replenishment, it helps prevent both overstocking and stockouts. 
• Expiration date management: Tracking expiration dates at the batch level is critical for managing perishable products. This enables businesses to prioritize selling items nearing expiration, reducing waste, and improving inventory turnover. 
• Improved inventory accuracy and visibility: Batch tracking enhances visibility into the location of items within inventory (on shelves, in transit, or sold). This improves overall inventory accuracy and decision-making regarding stock handling and procurement.
• Waste reduction and cost savings: By curbing excess ordering and facilitating better stock rotation, batch tracking helps reduce inventory write-offs due to spoilage. It thus directly reduces both waste and costs.
• Efficient recall management: Batch tracking allows quick identification and isolation of problematic batches within existing inventory. This minimizes disruptions and financial losses in case of defects or quality issues. 
• Automation and error reduction: Incorporating batch tracking in inventory management systems automates record-keeping and reduces human error in stock counts, locations, and expiration tracking.  

How to set up batch tracking in your inventory system: a step-by-step guide

Setting up an efficient batch tracking system for your inventory involves several key steps.

1. Define your batch numbering system 

Establish a clear, logical, and unique format for your batch numbers.

When encoding them, opt for GS1 QR Code or Data Matrix if you have higher data capacity needs, and use the GS1 Application Identifier for batch numbers: 10. 

2. Record batch information 

For each batch, maintain detailed records that include:

• The assigned batch number
• Production and expiration dates
• Information about the raw materials used
• Supplier details
• Quality control checks

3. Label products and shelving

Every product in a batch should be clearly marked with its batch number. A combination of barcodes and a human-readable number ensures readability, and thus accurate tracking and tracing.

Additionally, label warehouse shelves and bins to easily locate specific batches.

4. Invest in technology

Manual batch tracking is error-prone and inefficient, resulting in costly mistakes and time losses. Modern inventory management software and hardware are indispensable tools for businesses.

With barcodes, you can set up a highly efficient batch tracking system for your inventory. Keep the following aspects in mind:

• Choose the right scanner: Select a scanner that is compatible with your chosen barcode format and can withstand your warehouse environment. Ruggedized mobile barcode scanners scan 1D and 2D barcodes even in harsh environments. 
• Integrate with your system: Ensure that your barcode scanner software seamlessly integrates with your inventory management software to enable real-time data capture. 
• Train your team: Select a solution that allows your employees to scan barcodes effortlessly. Mobile barcode scanners, enhanced with modern software, often offer user-friendly features such as user guidance and batch scanning.

Batch tracking for inventory systems in the wild: Wolf System GmbH

Wolf System GmbH, a German manufacturer of ready-built housing solutions, implemented a batch tracking system using the Scanbot Barcode Scanner SDK to enhance its inventory management.

In its previous warehouse workflows, inventory statuses were often incorrect. It was thus often unclear for workers if construction materials were available, or where. This led to significant time losses in construction projects. 

With Scanbot SDK, Wolf System GmbH introduced a barcode tracking system. Now, incoming goods are immediately scanned and their warehouse location is logged. The results are accurate, real-time inventory updates and streamlined manufacturing processes.

Do you want to learn more about the Scanbot SDK? Contact our solution experts at sdk@scanbot.io.

For a first impression of the Barcode Scanner SDK, try the free demo app.