What is the functionality of Lot Tracking in an ERP system?

Lot tracking system records information regarding a batch of product. Lot tracking allows to track several units of a stock item using the same lot or batch number. User can determine what can be purchased or sold by Lot status. Expiry dates and user defined statuses allow you to further control the stock item. You cannot sell stock items that have reached or passed their expiry date.. You can track items by lot number and serial number - Lot tracked items are where the tracking (Lot) number refers to a specified quantity of the items, serial numbers are applied to individual items.

Lot Control and serialization options are defined at the system level and when one of these options is activated individual items are defined to be controlled by either lot number or serial number or by item number (not lot or serial tracked) on the part master file. When a part is defined as being tracked by lot number or serial number, that tracking is enforced throughout all material transactions for that item and upward through its parent items.

For purchased items lot or serial numbers are required for the full quantity of receipt, and are entered as part of the receiving transaction. For receipts with many serial number tracked items, ranges of numbers may be entered. A running total of items accounted for with lot or serial number assignments are displayed, thereby ensuring that the entire received quantity is properly identified prior to completion of the transaction.

Furthermore, the system checks current inventory to ensure that duplicate numbers are not assigned. On subsequent inventory transactions, lot and serial traceability is enforced upward through the item's bill of material structure. The lot or serial number and quantity are required on all material issues

From a quality point of view, it's very important to able to track and view all information related to a certain batch of product since the recieving of raw materials till the delivery to the end customer.

For example, if a customer complaint emerged from a certain batch, ERP systems allow you to track which raw materials were used in the production of this batch, and their inspection results (through QM module), also the production data for this batch, and all of this tracking won't be avaliable without using the SD and WM to know which product went to which customer and when.

This functionality provides for tracking lots (production orders) backword to the sources of its components and raw material and what other lots used the same shipments. It also provides for forwardly tracking lots to who received quantities from them.