Set up tracking dimensions
Serial and batch numbers help companies trace their products through Supply Chain Management. You can use the numbers for the following purposes:
Tracing
Quality assurance
Warranties
Traceability is useful for quality assurance purposes and when you deal with warranties for a product. The tracing functionality is especially important for items that represent a certain risk. For example, medicine or chemicals, where defects in production can lead to item recall. It's equally important for guaranteed items to trace back to the date that the product was manufactured or sold.
Serial and batch numbers allow for this kind of functionality. You can assign serial numbers, batch numbers, or both, to an inventory item. The system assigns serial numbers to individual items and assigns batch numbers to a set of items.
Lot ID is the term that refers to a transaction, not an item dimension such as serial and batch numbers. The system automatically assigns a Lot ID to each sales or purchase line when you create it. The system takes the number from the number sequence associated with the number sequence reference Lot No. in the inventory parameters. You can't make transactions without an assigned Lot ID, unlike using batch numbers, which you can select to use or not.
Serial number control
If you select the Serial number control parameter on the Tracking dimension groups page, Supply Chain Management only allows for inventory movements with a quantity of one.
When you're physically receiving or updating items that arrive in the warehouse, the physical on-hand quantity plus the arrival quantity can't exceed one. The system automatically selects physical inventory to handle the control correctly; usually, the Physical negative inventory field on the Inventory model groups page is clear.
By tracking inventory dimensions, you can track items in the warehouse and outside it by using the following parameters:
Batch number
Serial number
Owner
Allocating batch and serial numbers
You can use serial and/or batch numbers for all items, whether it's raw material, semi-finished items, or finished items. You can use the numbers to track the raw material and the finished item, regardless of the type of item that a legal entity manufactures. This approach is especially important for items with strict quality and manufacturing requirements, such as medicine, foods, or chemicals, because defect items must be quickly identified and recalled. Another use of the serial and/or batch number is to track the date of sale for items that are covered by a warranty.
Serial and batch numbers are inventory dimensions. Therefore, you should assign them only to items that have tracking dimension groups where these dimensions are active. You can assign serial or batch numbers manually or automatically, depending on whether the item has a serial number that someone can scan into Supply Chain Management or whether the system should assign the serial number based on a serial number group.
Example
A company manufactures bicycles by welding aluminum tubes into bicycle frames. They receive aluminum tubes from a supplier who casts the tubes in batches. Each delivery of tubes to the bicycle manufacturer is marked with the supplier's batch number. The bicycle manufacturer creates a bicycle frame and wants to track each frame as it moves through the manufacturing and assembly process.
To track the parts, the company completes the following tasks:
Create a number group for aluminum batches that allows for manual allocation of a number.
Enter supplier batch numbers manually in inventory transactions for aluminum tubes. (In practice, it's best to use serial numbers.)
Create a number group for bicycle frames that disallows manual allocation.
Allow Supply Chain Management to automatically assign a serial number for each bicycle frame inventory transaction.
Production order reservations
You might find it beneficial to view the specific lots that are used in a production. For example, if you have a finished item in production that has a material defect, you need to know from which purchase order and lot the raw materials originate.
You can track the component items that the system uses on BOM lines by serial or batch numbers if the component item is assigned to a tracking dimension group where these dimensions are active. You can set up the component as a primary or secondary dimension by selecting Product information management > Setup > Dimension and variant groups > Storage dimension groups and then selecting the Primary stocking option.