In this post, we are going to walk you through the process of managing products by serial number, the benefits of managing products by serial number and how to use the serial number in Magento.
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What is the Serial Number?
A serial number is a unique group of letters and/or numbers associated with an individual item. The serial number is widely used in many businesses as an effective method for business management in general, and managing the inventory in specific.
The difference between a Serial Number and a Barcode Number
The key difference between a serial number and a barcode number is that a serial number is linked to an individual item, while a barcode is linked to an SKU. No two items can have the same serial number.
For instance: Product X has 20 items in stock.
Scenario 1: Product X has 20 different barcodes. The sales staff sells the product from the POS by scanning the barcode 978020137962. As a result, the quantity of product X will reduce to 19. The staff can still use the same barcode to scan to add product X to cart for another customer. The system doesn’t generally keep any record of which barcode was scanned/sold.
When the staff scan a barcode, the system will show the product details of product X.
Scenario 2: Product X has 20 serial numbers. The sales staff sells the product from the POS by scanning the serial 4CU0460D0G. As a result, the quantity of product X will reduce to 19. The item associated with the serial 4CU0460D0G will be marked as “out of stock”. Information about the serial number will ideally be kept in the order information.
When the staff scan a serial number, the system will show the detail of the specific item of product X. For instance: is it in stock or out-of-stock, which warehouse is it located and so on.
The benefits of using Serial Numbers in the management of your inventory
The serialization of product items is widely applied as a result of many undeniable benefits. Specifically, it can help business owners to:
1. Simplify inventory management
In the business world, an item can be attached to many variables rather than just the product SKU. For instance, two items of the same SKU can have many different attributes, such as:
- Each item can be stored in a different location
- One item has already been purchased by the business owner, while the other is consignment goods
- One item is a regular product, while the other can be a sample product or a damaged product
- Each item can be purchased from a different supplier
The serial number can perform a wonderful job of separating items of the same SKU. Instead of using multiple databases and having to spend a lot of time looking up information, business owners can simply trace back the information associated with the serial number of the item. So, in the event that the store owner wants to know the stock level of sample/damaged product, manual counting won’t be necessary anymore. Similarly, if some of the items were recognized to be defective after it was received, the store owner can easily trace back to see which supplier were they purchased from to proceed with the return process.
2. Minimize stock-on-hand and avoid product expiry
As many businesses want to minimize the amount of stock-on-hand they have to keep in their inventories, it’s beneficial for them not only to see how many products they have available but also how much time that product item has been sitting in their inventory. In doing so, the business owner can make the decision to adjust the purchase from the supplier accordingly or start a promotion program.
Additionally, in many industries, like pharmacies, the serial number is a powerful tool for the business owners to implement the “First in, First out” rule to make sure they can sell the items before any of them expire.
3. Simplify business processes
In many businesses, product warranty requires the business owner to know precisely which item was sold, and on what day to trace back the date when the warranty is activated. Product serial can also be required to make sure that the business owner provides guarantee only to the item that they sell, but not any other similar item that the customer brings to the store. The same rule can be applied for refunding or recalling processes.
The Serial Number, Omnichannel, and Magento MSI
MSI is a truly powerful feature that Magento introduces since the Version 2.3 enables businesses to effectively scale up from single online channel/multi-channel to Omnichannel with their stocks managed at multiple levels like source, stock, and channel instead of only one warehouse. However, it also means that there will be a need for the store owner to know the stock level of each source/stock/ channel, the precise location of each item, or even which channel was the item sold through if possible.
Note: By default, the MSI doesn’t support managing product by serial number, and store owner can either seek to find a Magento-integrated 3rd party software in the marketplace or request to build this feature on their Magento core.
In the simplest sense, the serial number should be able to tell a Magento business owner the precise location source of each item, and whether the item is in stock or out of stock (has been sold to a customer), as well as the system can keep record of the serial of the product item when it’s sold, either via the website, a market place or via a POS in a brick-and-mortar store. Most importantly, the information of the serial number needs to synchronized across all channels, while centrally managed in one place (ideally the Magento Server).
For instance, in one of our previous customization projects, the client requested us, Magestore to build a basic Serial Number System that allowed them to import the Serial Number into the system upon receiving the products from the Supplier, checking the stock status and allocation of the product, while allowing the sales staff to scan and keep record of the Serial Number when purchasing from POS. The project doesn’t cover all of the points we’ve mentioned above on what we can do with the Serial Number, but it gives the business owner a much better control over stock movement, refund and product warranty.