Serial number tracking forms an integral part of any business looking to optimize the management of its inventory. From purchasing, storage, production, sales and distribution as well as after-sales services, the ability to know exactly where a specific item of inventory is within the supply chain affords any business a host of benefits.
What is a serial number?
A serial number is a unique sequence of numbers and letters assigned to a specific item for the purpose of identification. Serial numbers can be easily recognized because the letters ‘S/N’ or ‘SN’ on an item typically precedes them.
Serial number tracking is the initiative of tracing the movement of a component or item from the moment it is purchased, through production, manufacturing or storage, and on to sales and delivery to the customer. Serial number tracking is also relied upon to assist in monitoring items that are returned from customers; either for repairs or for refunds.
One of a kind
Because serial numbers are used primarily for the use of identification of a specific item, no two items should have the same serial number. When managing inventory, serial numbers are invaluable to aid in the tracing, tracking and accounting for inventory with accuracy. When combined with an integrated inventory software solution, process managers are able to locate a single inventory component anywhere in the supply chain at any time.
Serial tracking systems
Serial number tracking systems vary in nature, based on the size, complexity and demands of the business. For small, easily managed businesses with minor inventory control requirements a serial number tracking system could be nothing more than individual labels and stickers placed on items and recorded in a spreadsheet. While this may appear the most cost-effective strategy it is also the one most susceptible to errors, inaccuracies and inconsistencies – all of which result in losses to the business through inefficient management of its inventory.
Serial number tracking systems – many of which are offered as an added feature of inventory management software solutions – are integrated with the various nodes in the supply chain and allow for real-time identification, tracking and tracing of inventory. These systems are capable of generating sequential serial numbers for each new item of inventory produced or acquired by a business, and offer additional tagging or labeling options to enhance functionality.
How are serial numbers different from other product or manufacturing numbers?
Serial numbers are unique in that a separate number is given to each separate item of inventory. In much the same way that passport, identity or social security numbers are assigned to us as individuals, so too are serial numbers assigned to individual units of inventory.
Other manufacturing numbers assigned to an item include Lot and Batch numbers. A Lot or Batch number is given to items that are manufactured in the same production period. For instance, a manufacturer producing smart watches would give each watch manufactured on a certain date the same batch number but a separate and unique serial number.
Why use serial number tracking?
The reasons for using serial number tracking are numerous. Generally, serial number tracking is utilized to improve the efficiency of inventory traceability. Process managers are far better able to manage inventory optimally if they are able to pinpoint the status of every piece of inventory moving through the supply chain in real-time. Process managers, by utilizing a product’s serial number, will be able to know exactly the origin of an item, what that item is, where it can be located and where it is going in the near future.
Another major added benefit serialization affords can be found in managing product returns, repair and warranty issues with far more efficiency. This way, when an irate customer calls to check on the status of their purchase, the customer relations personnel will be able to inform them as to exactly when they can expect their product to be repaired and made available to them.
More accurate inventory analysis
Serial number tracking is also well utilized in instances where a business needs to draw upon the data concerning inventory turnover. The ability to clearly track and identify which inventory has a high or a low rate of turnover has a big impact on how well the business is able to achieve and maintain accurate inventory levels.
The moment inventory levels are allowed to fall too low or rise too high, losses result. While seasonal or unforeseen spikes and dips in demand or market fluctuations often do impact inventory levels in a negative way, the major culprit behind inventory driven costs and losses lies in inaccurate inventory levels. Inaccurate inventory levels can – in most cases – be attributed to the lack of a clear and precise appreciation of a business’ inventory.
Being able to track, trace and account for each piece of inventory in real time as it moves through the supply chain is what allows forecasters to both understand the current inventory status of the business, as well as identify clear trends in demand and adjust purchasing accordingly.
By incorporating serial number tracking into its inventory management system, a business will operate with greater efficiency and profitability. With Unleashed, serial number tracking is included on the Medium plan.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.