Inventory serial number tracking is a must-have feature of any warehouse inventory management system (WMS) or 3PL Software. As supply chains stretch around the world and manufacturers face stricter regulations both domestically and internationally, the practice of tracking serial numbers has begun to extend beyond industries like automaking and electronics.
Tracking serial numbers sounds similar to tracking stock keeping units (SKU) numbers, but there is an important difference.
SKUs track specific items and help retailers control the quantity of a product. For example, every pair of blue, bootcut jeans in size 10 would have the same SKU number.
On the other hand, serial numbers track each individual item, even when they’re seemingly similar. This means that every iPod, every DNA kit, or every automobile part carries its own unique sequence of digits.
Serial numbers give manufacturers a way to protect themselves against knock-offs. They also help retailers reference warranty terms and track stolen products. A stolen phone can be blacklisted by the carrier and rendered useless to the thief if the victim has the phone’s IMEI number on hand.
The bottom line: Serial numbers are incredibly important for supply chains. This importance is further magnified when you consider the size of the cross-border eCommerce industry.
By 2021, more than 2.14 billion people will buy goods and services online. As the eCommerce industry continues to boom, serial numbers will provide an essential way of maintaining visibility over products, tracking stolen goods, and referencing warranty and other post-sale service information.
In this post we’ll cover:
- How serial numbers are created and tracked within your supply chain
- How they’re tracked within your WMS system
- Streamlining the process of capturing inventory serial numbers
- Which industries benefit the most from inventory serial numbers
How Are Serial Numbers Created, Recorded, and Tracked Within the Supply Chain?
A serial number is created by the manufacturer of a product. The goal is to make sure every item’s history is identifiable while it travels through the supply chain and between end users.
If all manufacturers practiced vertical integration (the business practice of controlling all steps in the supply chain such as distribution and retailing) then this would be a relatively straightforward process. All divisions would use the same systems and the item’s serial number would be captured at each stage.
In reality, most companies don’t pursue vertical integration. While it can be incredibly valuable, vertical integration is challenging to execute and difficult to reverse. Instead, most companies work with upstream and downstream supply chain partners to derive value from their products.
Consequently, each partner (e.g., distributors&wholesaler, warehousing facilities, retailers) needs systems in place to accurately record serial numbers. This ensures that they can manage costly events like a recall while limiting the exposure to their business.
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Inventory Serial Number Tracking Within a Warehouse Management System
Inventory serial number tracking takes time (which costs money), so it’s in a warehouse manager’s best interests to streamline the process. There are a few ways that warehouses can set up inventory serial number tracking within their warehouse management systems.
Track Serial Numbers Upon Receipt and Upon Shipment
Tracking serial numbers upon receipt and upon shipment helps you keep a tightly controlled warehouse and determine exactly when individual items entered and exited your warehouse.
In your inventory management system, you can set custom tracking settings by navigating to your inventory serial number tracking tab, which could be called “Serial Number,” “Serial Number Information,” or “Create Serial Number,” depending on your service provider.
You would uncheck the boxes “skip during receipt” and “skip for issue,” or you would check “record during receipt” or “record for issue,” depending on the language of your WMS.
When you are creating the serial number, you’ll need to ensure that the serial number doesn’t match or replace any of the following entities:
- Item Code or Item Barcode: The number your warehouse created to track the stock within the warehouse. This is an internal number, so it isn’t shared with other supply chain partners the way a serial number is.
- Receiving Warehouse Location Code: A code that designates where within the warehouse the item is stored.
- Receiving LP Code: A code that identifies the pallet associated with the product.
- Receiving Order Code: The code that matches the advance ship notice (ASN) or receipt order details.
Track Serial Numbers Only On Shipment
In this method, you would follow all of the previous steps, but check “skip during receipt” or uncheck “record during receipt.” With this option, you would only have visibility over when an individual item left your warehouse and where it went, but not when it entered your warehouse.
For warehouses with limited resources, tracking only upon shipment is an ideal option. Within the facility, most warehouse managers are only concerned with item codes, since inventory management is their biggest concern.
Tracking the serial number is important when it comes to a black swan event like a massive recall. If a warehouse needs to be reimbursed for a recall, it’s easier to determine what’s owed when it’s been captured by your software.
That said, if they only track upon shipment, that warehouse manager will only have information on the recalled items they’ve shipped. If a recalled item is still in their inventory, and they didn’t track the serial number upon receipt, they’ll need to manually find those individual items.
It is also possible to print serial numbers on the packing slips to facilitate tracking process.
Import Multiple Serial Numbers Using Excel
Warehouse managers also have the option of uploading multiple serial numbers from a spreadsheet.
Streamlining the Process of Capturing Serial Number Data
The goal for most warehouses is to eliminate as many manual processes as possible. This is why supply chain managers and warehouse managers use barcode scanners.
Those who still rely on manual processes, like Excel spreadsheets, either struggle to capture inventory serial number data on a consistent basis or don’t capture it at all.
Most warehouse management solutions today support barcode scanning of serial numbers. Workers can scan items as they arrive at the dock and their serial numbers are automatically uploaded into the system.
The same idea applies to the outbound process. Items are scanned during packing or loading so the inventory serial number capture occurs at the shipping stage as well.
Barcode scanning is a significant improvement over manual pen-and-paper methods, but it can still be time- and labor-intensive when you consider all the steps involved at receiving and shipping.
For instance, receiving is one stage where proper tracking and documentation is essential. Since products are changing hands, there’s a shift in legal responsibility.
If your incoming goods are not properly tracked, documented, and accounted for, your warehouse business could take on the liability of damaged or missing items. Theoretically, you’d need someone with a barcode scanner during several of these receiving steps:
- Identify the shipment: Check that all boxes/pallets that were ordered have been delivered by the driver
- Count the individual contents: Open each package to ensure that the quantity of items matches the vendor’s shipping notice
- Inspect the products: Carefully check each item for any damage
- Document and distribute receiving data: Enter all information regarding the shipment into the WMS and then distribute that information to other concerned parties, like sales, the customer service team, or the accounting and finance department
Ideally, barcode scanners would be performing inventory serial number tracking at the identification, counting(Barcode scanners can be used during cycle counting as well) , and documenting stages.
To streamline the receiving process even further, some warehouse managers have turned to RFID tags. The cost of RFID has been falling for years, making its benefits more accessible to a wider group of supply chain businesses. The benefits of RFID include:
- Collecting, managing, and analyzing large quantities of data
- Reducing labor costs
- Optimizing operational activities
- Spending capital effectively
- Mitigating security risks
- Supporting a warehouse’s goal to adhere to regulatory and compliance standards
RFID tags are particularly useful at the counting stage. Opening each package and checking each box takes up significant time for warehouse workers and increases the business’s labor costs. With RFID tags on each item, RFID scanners can count all the items in a shipment and cross-reference them against the purchase order.
These RFID tags are also capable of storing serial number data.
RFID technology allows warehouses to almost instantly capture serial numbers from individual items within boxes. This information can then be transferred to the WMS.
In addition, the almost instantaneous capture of information makes for easy data transfers to other important enterprise systems including customer relationship management (CRM) systems used by the sales team or invoicing systems used by the accounting and finance team.
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Which Industries Benefit Most From Comprehensive Inventory Serial Number Tracking?
Some industries are more sensitive to inventory serial number tracking than others. In these industries, being able to distinguish between units based on their histories is essential to quality customer service and retaining business value.
Warehouses that can track serial numbers not just at one stage of their warehouse processes, but throughout, can carve out a specialist niche and land companies from these industries as customers.
Inventory Serial Number Tracking in the Electronics Industry
Serial numbers play a starring role in the electronics industry. Serial numbers help electronics manufacturers, wholesalers, and retailers track faulty products and identify specific components of a faulty product.
For instance, a defective flat-screen TV may not be the television manufacturer’s fault. In reality, it could be due to a faulty component from its LED screen supplier.
Inventory serial numbers also allow manufacturers to track warranty information. Without proper tracking of serial numbers, businesses would lose money providing free services on products with expired warranties. Conversely, they could jeopardize the customer experience by refusing to provide service for products with a valid warranty.
Inventory Serial Number Tracking in the Automotive Industry
Traceability is a crucial function of the automotive supply chain. It enables all downstream players to trace the origin and sub-assembly of a car’s component parts.
Naturally, serial numbers are an integral part of traceability. In fact, industry players consider it worthwhile to put a serial number on the tens of thousands of possible component parts.
While the automotive industry is known for its vertical integration, that’s not entirely the case when it comes to component parts. Focusing on enhanced methods and technology for inventory serial number tracking for component parts can help your warehouse or 3PL business land a new type of customer.
Inventory Serial Number Tracking in the DNA Testing Industry
The DNA testing market is expected to reach $1.99 billion by 2024, with a compound annual growth rate of 16.4 percent. This represents a massive opportunity for warehouse managers and third-party logistics companies to support this very niche, very detail-oriented market.
Direct-to-consumer DNA testing kits travel through a reverse supply chain. Empty DNA kits travel from the warehouse to consumers. Consumers provide a sample of their DNA and send the used kit back to the company.
As expected, keeping tabs on the samples requires unique identifiers. For instance, when a 23andMe customer orders a kit, it arrives with a unique barcode. A new customer must create an account online and then register that barcode with his or her account.
When their sample is sent to the lab, 23andMe tracks the kit using its unique identifier or serial number. The technicians carry out the testing and enter the results into the secured user profile with the associated number.
Understandably, this requires sophisticated serial number tracking. Losing a sample is costly and embarrassing. And mixing up two samples undermines the entire value proposition of a DNA testing company, which is to provide consumers scientifically backed information about their heritages and genetics.
Above all, any mistake - whether it’s a mix-up or a loss - negatively impacts the company’s reputation since consumers are trusting it with not only their personal information but their DNA as well.
It’s easy to see how a warehouse that masters the inventory serial number tracking process has a huge competitive advantage in the consumer DNA testing industry. Direct-to-consumer DNA testing companies spend an enormous amount of time and resources on their supply chain management and logistics in an effort to protect their reputations.
The trade-off is they don’t enjoy the cost savings and efficiency of outsourcing to experts in logistics. If a firm can demonstrate its competency not just in logistics, but in third-party logistics as well, it can offer unique value to DNA testing companies.
Enhance Your Inventory Serial Number Tracking To Offer a Unique Value Proposition To Manufacturers
A sophisticated warehouse management system will empower you to better meet your customers’ needs when it comes to inventory serial number tracking. The right system allows you to easily capture data at the receiving dock and track it again when products ship out the door.
A good WMS also makes it easy to share your inventory serial number data with other areas of the business. As track and trace capabilities become increasingly important in our expanding global supply chains, the ability to record and reference serial numbers will be a non-negotiable for warehouses.
Written by Ruthie Bowles
Ruthie is a content marketing consultant for Logiwa. Her specialties include small business development and inventory management.