Inventory management is a lot like bowling- you have to knock down all the pins to raise your score. In high-value businesses that deal with seasonal, expiry-sensitive and seasonal products, it is important to know how much inventory is on hand, the item’s condition on an individual-basis and where it’s located. In this regard, the best strategy is to implement serialized inventory.

Within inventory management, serialization is a process that involves assigning unique identifiers to individual items. Think of it as an AADHAAR card that gives sellers in-depth information on their system when they enter the serial code, which is useful in helping them identify not only the item but also the batch or lot it originally belongs to. 

In this quick post, we’ll deep dive into the best practices and benefits of serialized inventory.

Serialized Inventory and Non-Serialized Inventory

Serialized inventory contains items that are identifiable through unique codes, indicating their manufacturer, manufacturing date, shipping and customer details. Serialization helps sellers keep close tabs on inventory as it moves forward, ensuring several actions: minimizing loss and theft, managing returns and recalls and preventing defective batches from going out.

Serialized inventory is most beneficial in industries like healthcare and pharmaceuticals, branded luxury items,  mechanical and automotive, defense and designer jewelry.  The reason being that these items have quality identification standards and anything falling under the bracket of defect and damage needs sufficient evidence in order to authenticate the transaction and purchase. 

Non-serialized inventory, on the other hand, applies to categories like food and clothing which are typically sold in bulk. And this is because they can be substituted with superior quality in cases of fit, size and description mismatches. All the seller needs is their respective SKU codes before sending a replacement request to their manufacturer to ensure the order can still be fulfilled.  The manufacturer does not have to spend time and effort serializing every shirt but can rely on the SKU code to track inventory levels and pick out the required item.

So who stands to benefit from inventory serialization? Find out in the next section.

The Benefits of Serializing Inventory

Serialization adds a touch of precision to your inventory, which makes it best suited for industries whose reputation is tied to product authenticity and quality compliance. It helps business owners ascertain claim validity and follow due process when it comes to accepting returns and issuing refunds. In addition, there are numerous advantages to serializing inventory which are listed below;

Enhanced Traceability and Visibility

From the moment it is recorded into inventory until your customer gets it, serialized inventory management offers sellers item-level traceability. By assigning individual items unique markers or identifiers, tracking movement and bottlenecks along the way is made easier. Adding barcodes to serial numbers makes it more watertight because warehouse teams can scan and confirm that it is the same item that is moving along the chain.

With EasyEcom’s built in barcode scanning functionality on mobile WMS, any authorized personnel can collect data instantly, registering it authenticity and matching the details against the information that has been requested.

Counterfeit prevention

Uncontrolled reproduction of replicas poses a problem for industries such as healthcare because counterfeit medicines can have long-term consequences. With serialization, each item bears a unique identifier tracing it back to the manufacturer, manufacturing and expiry dates, which establishes which ones are genuine, and which ones aren’t. 

Improved Inventory Control

Unconditional visibility into inventory boosts how you manage inventory overall.  It helps you to keep tabs on stock levels, regulate fluctuations against demand forecasts and optimize reorder points on actuals. Businesses can also track down defective pieces and separate them from inventory so that they aren’t picked to fulfill orders. This minimizes the risk of recalls, negative experiences and damage to reputation.

Serialized inventory makes it easier to know the whereabouts of assets spanning equipment, robotic fleets, machinery and high-value items, helping to curb inventory shrinkages arising from theft or loss. Even if something went missing, a seller can determine when, where and how it happened, enabling them to take corrective and preventive actions.

Business-specific Reporting Granularity

Serialization comes down to the specifics, and the more detailed your inventory data, the easier it gets to set and make sense of reporting metrics important to your business. For example, a designer watch company that sees high returns for a particular watch specimen can look at reasons for high returns based on metrics such as design, working mechanics, warranty claims, price points etc.  This data is invaluable in minimizing returns and recalls.

Other data such as inwarding, outwarding and stock transfers can also be included to streamline location, activity and movement-based tracking. This lets a seller stop a defective piece from being shipped before it gets to that stage.

As with any reporting suite, metrics and data both need to be revised periodically in line with trends so that you’re always working with updated information. 

Rectifies Order fulfillment Inefficiencies

Track-and-trace is the biggest selling point for serializing inventory because it gives you end-to-end supply chain visibility, helping you to recognize where bottlenecks pop up the most. Further, it can help you recognize the triggers, times and preempt them before they erode customer trust and in turn, the bottom line. Serial numbers can prevent unintentional damage to fragile items by tagging the item as such, ensuring packers use appropriate packaging. By being aware of handling requirements while the item moves forward, sellers can comply with quality requirements and raise their rate of damage-free deliveries. More importantly, once a shipment is out, both customers and sellers are on the same page concerning where it is, which renders transparency to the entire fulfillment process.

Manage Product Recalls and Returns 

When a product is delayed or damaged, it’s the seller who is held accountable and whose reputation is at stake even if the fault originated elsewhere. It is therefore imperative to automate returns reconciliation through a system that gives order-level information. And if it’s serialized, the time to track high-volume returns is greatly reduced.

In the case of recalls, a famous example is that of the Samsung Note 7 where netizens videoed the device catching fire while charging. The company had to recall and discontinue that particular batch on account of defective batteries. A few years later, bad luck struck again in 2021 when a passenger’s A21  phone sparked in-flight and raised questions on safety and QC measures. While recalls cannot be ruled out completely, they can be minimized, and serialization helps with this by ensuring recalls don’t recur in future. A feature unique to serialized inventory within EasyEcom is lot locking, which locks a defective batch from being assigned, ensuring that the seller adheres to a manufacturer’s instruction to not send that product batch out. 

Better Warranty and Service Management

Serialization makes a seller’s life easy when giving and upholding product warranties. It helps the merchant to recognize if the product comes under warranty, allowing repairs and maintenance activities to be carried out as per service agreements for individual products. This enhances customer satisfaction with timely intervention, prolonging the item’s lifespan at no additional costs. Sellers can do damage-control and comply with financial and legal obligations such as responding to claims within the window.

Regulatory compliance

Industries that run on compliance can get a detailed record of product activity, expediting and streamlining quality inspection. This ensures quality is uniformly held to the highest standards.

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Tips to Implement Serialized Inventory Management

The decision to serialize your inventory requires careful planning, and investing in the right technology. In fact, it boils down to system robustness, configurability and scalability, because you’re going to need software that can match data and enable you to track at both micro and macro-levels. Here are some tips to help you determine whether your business can truly benefit from inventory serialization

Assess Your Business Needs

Create a scope document after taking into account industry regulations, innovation feasibility, technical complexity and supply chain efficiency that can impact your business. This document will help you assess and realign your goals -whether it is to improve tracking, minimize errors, cement customer trust or enhance product quality. 

Choose the right inventory management system

If you’re in-between systems or relying on too many to accomplish one task, then you know you can do better. Your inventory management system should not only allow you to track lots, shipments and returns but should also be able to update this data seamlessly across your most profitable sales channels so that quantities reflect actual stock availability.

Serialization can be a costly affair so do a count beforehand to determine quantities and draw estimates for the future that will need serializing. The inventory management system you choose should be portable, in the sense that it should enable serialization to work equally well on web and app. A member at your warehouse should be able to scan codes through their handheld terminal and feed that data back to someone sitting in an office, ensuring the item being tagged is authentic and passes QC checks.‍

Set Operating Standards

Have an all-hands executives meeting to develop clear and detailed procedures for assigning serial numbers by item category, packaging requirements etc. Operating standards should structure the kind of data and how it will be stored, recorded, retrieved and updated within an inventory management solution. ‍

Train your Staff

Ensure all relevant team members are provided ample time to train on using inventory management systems. Give them access to relevant materials, data capturing devices (Such as RFIDs, Handheld Terminals with barcode scanning functionality) and demonstrate usage so that they are aware of how to operate these devices independently. A count of all devices and hands ensures that a faulty or missing device is also immediately identified and traced back to the staff assigned, upholding quality and security standards. Down the line, if the system is upgraded to a newer version, everyone should routinely be trained to keep abreast of how these changes impact operations, ensuring disruption-free services.

Create Business-Unique Serial Numbers

Develop a system unique to your business for individual items’ serial numbers. The point is to identify what item it is and to have as much information on it as possible, including who it was last with, and where. This prevents duplicity and ensures that the information is accurate in front of people 

Ensure Strict Adherence to Data Integrity

Product information should not fall into the wrong hands, thereby compromising the entire operation. Through the inventory management system, you can set user roles, access controls and permissions at a high-level to limit visibility only to relevant personnel.

Establish Audit Trail

Record serialization history through audit trails that helps merchants keep track of changes to serialized inventory data. This trail is useful in assigning accountability and improves item-level traceability.

Gear Up For Blockchain and IoT

 Blockchain technology and IoT will influence serialization in the decade to come. Owing to its ledgering capabilities, blockchain will be used to create an impenetrable record of item movements and transactions that reinforces trust in the supply chain. The trust trickles down from the manufacturer to seller to end customer. Businesses using blockchain will be better poised to track items, identify discrepancies by when and where they occurred and recognize and isolate counterfeit products.

Even IoT will be used more in packaging to facilitate seamless data collection. An item scanned in a warehouse will let a warehouse manager sitting elsewhere instantly know what is happening with that particular device, and this is all thanks to the data continuously being scanned. This will be immensely useful in quality control and supply chain efficiency.

Conclusion

Is serialized inventory worth the high costs everyone keeps talking about? Our data shows that 4% of enterprise eCommerce sellers were sold on the idea and serialized multiple warehouses within a month. So, although it does require significant training time and costs upfront, serializing inventory knocks off several skittles at once- damage-free fulfillment, item tagging, inventory tracking, stock level optimization, reproduction of replicas, better return management, minimized recalls and ultimately- better customer service. 

Don’t expect improved results overnight, because simply adding unique serial numbers won't drive warehouse efficiency. But igiven time, it can definitely make your supply chain more resistant to shrinkage, duplicity and loss!

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