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In Microsoft Dynamics 365 Business Central, Lot Tracking allows you to track groups of items by Lot Number without requiring Serial Number (SN) tracking. This functionality is available out of the box and is particularly useful for managing inventory in batches, where a single cost applies to the entire batch (rather than individual items).

Here’s how you can use Lot Numbers without Serial Numbers for tracking and costing:

Option 1: Standard Lot Tracking in Business Central

Lot numbers can be managed without Serial Number tracking using the Item Tracking Code configuration.

Step 1: Configure the Item Tracking Code

Go to Item Tracking Codes:
- Navigate to Tell Me (search) and type Item Tracking Codes.
Create or Edit a Tracking Code:
- Create a new tracking code or edit an existing one, such as LOT TRACKING.
- Set up the following fields:
  - SN Specific Tracking: Leave this unchecked (this ensures no Serial Number tracking is applied).
  - Lot Specific Tracking: Check this option (enables Lot Number tracking).
  - Lot Warehouse Tracking: Check this if you want to track Lot Numbers at the warehouse level.
  - Other options (e.g., Expiration Date, Manufacturing Date, etc.) can be configured based on your needs.

Step 2: Assign the Item Tracking Code to an Item

Go to the Item Card for the item you want to enable Lot Number tracking for.
Assign the Item Tracking Code you configured above (e.g., LOT TRACKING).

Step 3: Use Lot Numbers in Transactions

When creating transactions (e.g., Purchase Orders, Sales Orders, or Production Orders):
- Enter or select the Lot Number in the Item Tracking Lines window.
- For a batch of items, the Lot Number is applied to all items in that batch.

Step 4: Cost Application for Lot Numbers

Business Central automatically applies the cost to the entire Lot during transactions.
The costing method you’ve defined for the item (e.g., FIFO, Average, or Standard Cost) will be applied to the entire batch (Lot Number), not individual items.

Option 2: Using Customization to Enhance Lot Tracking (If Necessary)

If the standard system does not fully meet your needs, customizations can be made to extend the functionality. Here are some examples:

Scenario: Cost Per Batch Instead of Per Item

In the standard system, costing applies at the item level even when using Lot Numbers, but the Lot Number itself is not directly used for costing calculations. If you want to apply cost per Lot (batch):

Customization to Track Cost by Lot:
- Create a custom field for Lot-specific costs in the Item Ledger Entry table or a related table.
- Modify the posting logic to calculate costs at the Lot Number level rather than individual item entries.
Customization for Lot-Based Costing Reports:
- Develop a custom report or page to show aggregated costs and quantities for Lot Numbers. This can provide insights into cost by batch.
Modify Posting Behavior (Optional):
- Modify the cost application logic (e.g., Codeunit 22 - Item Jnl.-Post Line) to distribute or calculate costs per Lot Number rather than individual items.

How Lot Tracking Applies to the Item Ledger

In the Item Ledger, Lot Numbers are used to group inventory transactions and apply costing. Here's how it works:

Lot Numbers in the Item Ledger:
- Each transaction (e.g., purchase, sale, or transfer) creates an Item Ledger Entry.
- The Lot Number is stored in the Lot No. field of the Item Ledger Entry table (Table 32).
Cost Application:
- Costs are applied to all items within the same Lot Number during transactions.
- The Cost Amount (Actual) field in the Item Ledger Entry will reflect the total cost applied to items in the lot.
Tracing and Reporting:
- Lot Numbers can be traced throughout the system using the Item Tracking Entries table (Table 337).
- Reports such as Lot Availability by Item or Item Ledger Entries by Lot Number can provide visibility into inventory movements and costs for specific lots.

Key Benefits of Using Lot Numbers

Batch-Level Traceability:
- Lot Numbers enable tracking of a group of items from procurement to sale, including production and transfers.
Simplified Costing:
- Costs are applied to batches rather than individual items, which is ideal for items manufactured or purchased in bulk.
Compliance:
- Lot tracking helps with regulatory compliance for industries that require batch traceability (e.g., food, pharmaceuticals).

Common Use Cases

Batch Manufacturing:
- Lot Numbers can represent a production batch, with costs calculated at the batch level.
- Example: A batch of 100 units is produced, and a Lot Number is assigned to the entire batch.
Bulk Purchases:
- Lot Numbers track a shipment or delivery of items purchased together.
- Example: 500 units purchased together are assigned the same Lot Number, and their cost is shared across the batch.
Warehouse Management:
- Lot Numbers enable precise tracking of inventory at the warehouse level.
- You can use the Lot Warehouse Tracking option to ensure Lot Numbers are tracked during warehouse activities.

Best Practices

Consistent Lot Numbering:
- Use a consistent Lot Number format (e.g., YYYYMMDD-BatchNo) to ensure traceability.
Costing Method:
- Choose a costing method that aligns with your requirements (e.g., FIFO for first-in, first-out inventory handling).
Train Users:
- Ensure users understand how to assign and use Lot Numbers in transactions.
Monitor Reports:
- Regularly review Lot-related reports (e.g., Lot Availability by Item) to ensure accurate tracking and costing.

Conclusion

Standard System: Use the Item Tracking Code to enable Lot Number tracking without Serial Numbers. Costs are applied at the item level but grouped by Lot Number.
Customization (Optional): If you require cost calculations specific to Lot Numbers, customizations can be developed to extend the standard logic.
Reporting and Traceability: Utilize out-of-the-box reports or custom reports for detailed insights into Lot-specific inventory and costing.

This approach allows you to manage costs and inventory efficiently at the batch level using Lot Numbers without Serial Number tracking.

Lot Number