# Dynamics 365 Supply Chain Traceability: Lot and Serial Tracking for Recalls > Source: https://netray.co/erp-help/dynamics-365-supply-chain-traceability-lot-serial-recall > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: ERP Help ## Short answer Traceability in Dynamics 365 Supply Chain Management rests on tracking dimensions: batch number and serial number, switched on through a tracking dimension group on each item. Once active on receipts, production and shipments, the Item tracing function can trace a lot forward to customers or backward to suppliers, which is the core of a recall. ## Kind how-to ## System dynamics ## Erp Microsoft Dynamics 365 Supply Chain Management ## Module Inventory tracking dimensions / Item tracing ## Query dynamics 365 supply chain traceability ## Alternate Queries - d365 lot traceability recall - d365 batch number tracking dimension - d365 serial number traceability ## Applies To Dynamics 365 Supply Chain Management, with or without WMS. Menu names may vary slightly between versions. ## Steps ### Enable lot and serial traceability **Items:** - Decide per item whether you track by batch number, serial number, or both, and decide at which points the number is required. - Create tracking dimension groups (Product information management > Setup > Dimension groups > Tracking dimension groups) with Batch number or Serial number active, and set the physical and financial inventory options accordingly. - Set Active in sales process and other process flags on the group so numbers are captured at the sales issue, not just at receipt. - Assign the tracking dimension group to the released product, ideally before any transactions exist. - Capture the numbers at receipt (product receipt or inventory registration) and in production (report as finished with batch). - Record supplier lot references on batch records, plus attributes such as expiry or best-before. - Test: receive a lot, consume it into a finished good, ship the finished good, then run Item tracing from the raw material lot. ## Sections ### Forward and backward tracing **Body:** Item tracing follows inventory transactions that carry the tracking dimension. Backward tracing starts from a finished good lot and shows the component lots and suppliers that went into it. Forward tracing starts from a supplier lot and shows which production orders consumed it and which customers received the output. The trace is only as complete as the data entered. If operators substitute a different lot at the line and do not record it, the chain breaks silently. Process discipline matters more than any setting. ### Recall workflow **Body:** When a supplier notifies you of a bad lot, run a forward trace to list affected finished goods and sales shipments. Then block the remaining stock using batch disposition codes or a quality order so it cannot be picked, and contact the customers from the trace results. Practice this on a mock recall each year and time it. The question regulators and customers ask is how fast you can name every shipment that contains the lot. ### Common design traps **Body:** Changing the tracking dimension group on an item after stock exists is restricted for good reason. Plan it before go-live. For regulated products also decide whether batch merging is allowed, since merging lots destroys the one-to-one link between a physical lot and its history. ## Pitfalls - Making batch number active at receipt but not at sales issue, so shipments do not carry the lot. - Allowing free-text batch numbers with no naming convention, which makes supplier lot matching manual. - Merging batches for convenience and losing the lot lineage. - Never rehearsing a trace, then finding in a real recall that production consumption was not recorded by lot. ## Ai Angle An assistant over the ERP data can answer a recall question in one step: list every customer shipment containing components from supplier lot X, with quantities and dates, and show the query so quality can verify it. Netray's private deployments keep that lot and customer data inside your own environment. ## Faq ### What is the difference between a batch and a serial number in D365? **Answer:** A batch number identifies a quantity of identical units made or received together. A serial number identifies one individual unit. Many items use one or the other, and some use both for stricter traceability. ### Can D365 trace forward and backward? **Answer:** Yes. The Item tracing function lets you start from a batch or serial and trace forward to where it was sold or consumed, or backward to its sources, based on recorded inventory transactions. ### Can I add traceability to existing items? **Answer:** Changing the tracking dimension group on items with on-hand or open transactions is restricted. Typically you clear stock, change the setup, and re-receive, or follow a controlled data migration. ### Does traceability need the warehouse management module? **Answer:** No. Batch and serial tracking works with standard inventory management. Warehouse management adds location-level control, but the tracing itself relies on tracking dimensions. ## Search terms dynamics 365 supply chain traceability, d365 lot traceability, d365 batch tracking dimension, d365 item tracing, d365 recall process, d365 serial number tracking, tracking dimension group d365, d365 batch disposition code --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json