Tracking inventory by batch or lot number for traceability and expiry management
Batch tracking, also known as lot tracking, is an inventory management method where goods are grouped and tracked by a unique batch number or lot number assigned during manufacturing or procurement. Each batch shares common characteristics such as manufacturing date, expiry date, supplier, and production run. For Indian businesses dealing in pharmaceuticals, food products, cosmetics, chemicals, or any perishable goods, batch tracking is essential for regulatory compliance and quality control. It enables you to trace the origin of any product, manage expiry dates to follow FIFO (First In, First Out) principles, quickly identify and recall defective products, and maintain records required by FSSAI, drug control authorities, or GST auditors. When selling, you can select which batch to sell from, ensuring items closest to expiry are sold first. Batch tracking also helps during returns — you can trace exactly which batch a returned product belongs to and take appropriate action.
Your pharmaceutical distribution business in Hyderabad receives 1,000 strips of a medicine in two batches: Batch A (500 strips, manufactured Jan 2025, expiry Dec 2026) and Batch B (500 strips, manufactured Mar 2025, expiry Feb 2027). When a customer orders 200 strips, your system picks from Batch A first (earlier expiry). If a quality issue is reported with Batch A, you can instantly identify which customers received strips from that batch and initiate a recall.
Batch tracking is not mandatory under GST for all businesses, but it is legally required for pharmaceuticals, food products (FSSAI compliance), and certain chemicals. Even if not mandatory, it is highly recommended for any business dealing in perishable or date-sensitive goods.
A batch number identifies a group of items produced or procured together (e.g., all 500 strips from one production run), while a barcode is a scannable label on individual items. One batch can have hundreds of items, all sharing the same batch number but potentially having unique barcodes.
Yes, you can create your own internal batch numbers based on purchase date and supplier name. For example, use a format like 'SUP01-20250115' to identify the batch by supplier code and purchase date.
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