When you manufacture a product, its quality depends on the kind of raw materials you use. A product made from quality material turns out to be good as well. To ensure your raw materials are in good condition and free from any prominent defects or issues, you must carefully monitor their quality. But how can you track each product or material separately? To save time, each batch of material is assigned a number known as a lot number or batch number. This helps in quality control of the entire batch; if any defect is found in a single product, you can easily check the entire batch for that defect using the assigned lot number.
Today, we will discuss the importance of a lot number and whether your business requires one
What is a lot number?
The lot number, also known as batch number, lot code, or code number, is a unique identifier assigned to a batch of products to control the specific quality of the material or the products from a single manufacturer.
The lot number is like a fingerprint of your product. It’s written in a unique sequence and helps track all the information related to product quantity, expiry, origin, and its overall journey through various stages of production.
You must be wondering how a single number can have so much info? Well, inventory management is all about the techniques that help manage time, track products, and ensure quality control to have a satisfied customer. That’s why even a single lot or batch number can have such a great impact on overall inventory control and quality.
Manufacturers create these lot numbers internally, not suppliers. For instance, if a company produces 1,000 cases of Vitamin C on a single day, using the same ingredients and equipment, all 1,000 cases will share the same lot number.
With this system, a manufacturer can track all ingredients, constituent parts, equipment, and labor records associated with a specific production run in detail using software or a log.
Why do manufacturers use lot numbers?
Well, as we discussed earlier, a lot number is used for multiple reasons, but the main reason is to manage Recalls and Expiry.
A product recall is a request made by the manufacturer to return the product for several reasons, such as a defect being identified, a safety concern being raised, or a labeling error etc.
While the other reason is obvious, a product has expired or shows any signs of expiration.
In both cases, a manufacturer has to manage the returned product and track which material used in the manufacturing is expired. The quickest way to track the material is by monitoring the lot number. You can simply check the material used in production and see if the products are in good condition or not. This way, you can eliminate expired products and forecast the need for new inventory in advance.
Why should businesses care about recalls?
Recalls are highly damaging for any business.
During fiscal 2024, the U.S. Consumer Product Safety Commission’s annual report states that the agency completed 333 voluntary recalls, up from 313 the previous year, indicating increasing recall pressure.
This is an increase of 20 recalls over the year, or about 6%. Even a single-digit rise shows that regulators remain aggressive and brands continue to be affected. More upstream recalls mean more paperwork, refunds, and customer service issues downstream, even if your own products aren’t at fault.
Another incident from June 9, 2025, involved Georgia-based Alma Pak International, which voluntarily pulled 400 boxes of organic blueberries weighing 30 lbs each after routine testing revealed Listeria monocytogenes.
With the proper lot number, the company identified exactly **two lots, 13325 G1060 and 13325 G1096, that were contaminated.
The FDA issued a Class I recall, but it only affected one customer in North Carolina. If the codes had been missing or duplicated, it could have led to a much larger recall across the state or country, increasing costs and damaging reputation.
In short: effective lot coding turned a potential multi-million-dollar disaster into a controllable situation.
“Average direct recall cost: $10 million for mid-market food brands”.
A joint survey by the Food Marketing Institute (FMI) and the Grocery Manufacturers Association (GMA) estimated direct, out-of-pocket recall expenses at around $10 million per event (including retrieval, disposal, notifications, etc.).
Experts continue to use the $10 million benchmark to estimate the costs of today’s recalls. For example, Loftware’s 2025 label-error study multiplied last year’s 192 FDA recalls related to labeling errors by $10 million, resulting in $1.92 billion in direct industry losses for 2024, a staggering figure that doesn’t even account for lawsuits or brand damage.
Even if you’re just a distributor, a poorly tracked lot can lead to litigation, product write-offs, and margin loss. A $10 million expense equals the annual net profit of a mid-market food company with $150 million in revenue, so risk management is fundamental.
Recalls can incur transportation costs, damage a company’s reputation, and cause delays. Therefore, using a proper lot tracking system can help prevent such scenarios in advance.
How lot numbers move through a “Supply Chain”
A lot number starts its life at the factory, where the manufacturer stamps a unique code on each batch. When the shipment reaches the distributor or wholesaler, they keep the same code in their system or relabel it, as long as the original code stays visible, to ensure traceability.
Later, retailers or other businesses use the same lot code when returning products or during recalls. This helps everyone identify the exact batch quickly.
For food handlers, this process is soon to become mandatory rather than optional. The FDA’s Food Safety Modernization Act, Section 204, requires anyone who produces, packs, or handles items on the Food Traceability List to record and share important data about each lot. The initial compliance date is January 20, 2026. However, the FDA indicated in March 2025 that they might delay this deadline by 30 months. Until there’s an official extension, 2026 remains the target date.
Benefits of using a Lot Number
Lot numbers are more than just codes; they serve a much greater role in overall product safety and operational efficiency.
1- Lot numbers increase traceability
Lot numbers help with end-to-end traceability, allowing businesses to track items from raw material sourcing through production, inventory, and delivery to the customer. They act like a “passport” for material/items, showing where and when they were made.
Tracing products isn’t just about solving problems after they happen; it’s about preventing them. If a raw material batch is faulty, lot numbers help manufacturers find out exactly which finished products used that material. This helps prevent issues from spreading and strengthens the supply chain.
Through careful tracking of components and evaluation of supplier performance, companies can identify weak links and refine their sourcing strategies and reduce future risks.
2- Helps in quality control
Lot numbers help identify and isolate defective batches without having to recall the entire product line. If there’s a quality problem, the lot number shows which products are affected, making it quicker to fix the issue. Linking problems to specific lot numbers also provides useful data for quality control. When most issues (89%) are linked to the same lot within two production cycles, companies can find the root cause faster, like machine errors or supplier problems, and take corrective actions. This makes quality control more proactive, helping improve processes and lower costs.
3- Helps with proper inventory management
Lot numbers help keep stock organized and improve turnover, especially for perishable items where expiration dates matter. They allow for automated FIFO (First-In, First-Out) or FEFO (First-Expired, First-Out) rotation, which reduces expired stock write-offs by 22% each year.
In inventory management, lot numbers offer both financial and environmental benefits. Fewer expired products mean you can save a lot of money and make better use of resources throughout the supply chain.
And less food and other waste means you are doing a favor to the environment.
4- Lot number makes recall easy and builds customer trust
When there’s a problem, lot numbers help businesses identify and recall only the affected items. This way, they can reduce waste and minimize disruptions.
But it doesn’t just end there. How you carry out a recall is also important.
A poorly managed and broad recall due to inadequate lot tracking can easily damage your already broken trust and lead to severe financial losses.
Therefore, to build trust with their customers, businesses use a proper lot tracking system to make recalls faster and more accurate. A quick, targeted recall means fewer products are taken off shelves, causing less inconvenience for customers and avoiding unnecessary panic. It also shows that the company cares about the safety of its customers, and in this way, they can protect their reputation and finances.
Effective lot tracking delivers tangible benefits, not just in safety but also in operational and financial results.
Here we have some data related to this;
| Metric | Stats | Source |
| Reduction in Recall Scope | 78% (compared to manual tracking methods) | Qoblex |
| Average Recall Response Rate (CPSC) | 4% to 18% | Product Liability Prevention |
| Production Issues Identified by Lot Number | 89% (within two manufacturing cycles) | Qoblex |
Lot Number vs. Other Product Identifiers
It is easy to confuse lot numbers with other product codes. Here is how they differ:
A. Lot Number vs. Serial Number
| Feature | Lot Number | Serial Number |
| What it identifies | A whole batch produced under the same conditions | One specific unit within that batch |
| Uniqueness | The same code is shared by every item in the batch | Unique to each individual item |
| Assigned by | Manufacturer (internally) | Manufacturer (internally) |
| Primary use | Quality control, recalls, expiry tracking | Warranties, repairs, and precision defect tracking |
| Best for | Mass-produced goods (food, pharma) | High-value or complex goods (electronics, machinery) |
| Example | LOT 24-07-10A | SN 24A-000123 |
B. Lot Number vs. SKU (Stock-Keeping Unit)
| Feature | Lot Number | SKU |
| What it identifies | A time- or location-specific batch | A product type/variant (“red shirt, L”) |
| Scope | Changes with every production run | Stays the same until the product spec changes |
| Assigned by | Manufacturer (internally) | Retailer or manufacturer (internally) |
| Standardization | Not standardized | Not standardized (company-specific) |
| Primary use | Traceability, recalls, compliance | Inventory counts, re-ordering, sales analytics |
| Relationship | Many lots can exist for one SKU | One SKU can spawn many lots over time |
| Example | LOT WH-20250710-PO145-003 | SKU-SHIRT-RED-L |
C. Lot Number vs. UPC (Universal Product Code)
| Feature | Lot Number | UPC |
| What it identifies | A specific production batch | The generic product at retail |
| Visibility | Internal (manufacturer, supply chain) | External, scannable worldwide |
| Standardization | No global format | GS1-standard 12-digit barcode |
| Primary use | Quality control, regulatory traceability | Point-of-sale scanning, catalog listing |
| Granularity | Batch-level | Product-level (no batch detail) |
| Example | LOT 2025-07-10-B | 0 12345 67890 5 |
Where to look for a lot number?
Lot numbers are typically found on the outside of product packaging, often stamped, printed, or on a label.
Common locations include:
- Near the barcode or SKU.
- On the back panel of the product.
- On the top or bottom of kit boxes.
- Look for labels or stamps that say “LOT#,” “BATCH#,” or “CODE#”.
If consumers can’t find the lot number, they should check the product, its packaging, or contact the manufacturer. It’s important to know where to find it, especially if there’s a recall. For businesses, placing lot numbers in a standard spot, like underneath products, can help find them faster in case of any issue.
How to read a lot number
There is no single standard format for a lot number, as manufacturers internally generate them. However, they often contain information about the production date, batch number, and sometimes even the manufacturing line or product code.
Common coding methods include:
- Date Codes: Often seen as YYMMDD (e.g., 250630 = June 30, 2025) , MMYY or MMDDYY (e.g., 1225 = December 2025), or Julian Dates (e.g., 23165 = 165th day of 2023). Some formats include a letter for the month (A=Jan, B=Feb, etc.) followed by numbers for the year and day.
- Alphanumeric Codes: A mix of letters and numbers (e.g., A23B15, where “23” is the year and “15” is the day).
- Sequence Numbers: An internal identifier to distinguish between product lots or units within a lot.
- Manufacturer Code/Product Code: Identifies the merchandise or manufacturer.
For example, a lot number like LOT#B-01580609 could be interpreted as:
- B: February (month of manufacture)
- 015: 15th day of the month
- 8: Last digit of the year (2008)
- 0609: Earliest expiration date for a component (June 2009).
The lack of a universal format for lot numbers makes things difficult for both consumers and businesses.
- For consumers, it means they might need to look up a specific manufacturer’s coding system.
- For businesses, it complicates inter-company data exchange and supply chain integration, especially across international borders.
Therefore, having a standardized lot coding system is always advisable to prevent any confusion.
Industries that rely heavily on lot numbers
A- Food & beverage industry
Lot numbers help track perishable goods, expiration dates, and contamination problems. A single lot code can quickly identify and isolate any spoiled products, preventing larger damage.
B- Pharmaceuticals & medical
Under strict regulations in the pharmaceutical & Medical industry, lot numbers are used to track and trace materials throughout production to ensure patient safety and compliance. This is important for managing recalls and making sure the end product (medical product) is safe to use.
C- Children’s products
According to the Consumer Product Safety Improvement Act (CPSIA), children’s products need permanent labels with batch numbers. This helps find and remove unsafe toys or clothes quickly.
D- Cosmetics & personal care
While manufacturing cosmetic and personal care products, lot numbers help verify product safety, track manufacturing dates, and manage expiration. This allows a manufacturer to monitor product quality and consumer well-being because these products are directly applied on the skin and body.
E- Automotive & electronics
These industries use lot numbers to track parts and finished products. This helps find issues and recall specific batches. For example, if some brake pads are faulty, lot numbers help identify which vehicles have them.
Final note
If you have a business in any of the industries discussed above or any industry that requires proper monitoring of raw materials to produce a high-quality end product, you need to ensure you have a system in place to add lot numbers. The ultimate goal of the business is to generate revenue, which cannot be achieved if you have a damaged reputation or unhappy customers. Therefore, undergo a thorough quality control process by adding the correct lot numbers.
If you are wondering how to get started, begin by finalizing your lot number format. Assign unique lot numbers during production, receiving, and recalls. Automate the entire process using software or barcode technology to eliminate mistakes.
