FEFO is an inventory rotation method that prioritises the shipment of items with the earliest expiry dates, regardless of when they were received. This critical approach prevents waste, ensures compliance with safety standards, and protects both businesses and consumers in industries where product freshness matters.

Unlike FIFO (First-In, First-Out), which simply ships the oldest received stock, FEFO intelligently manages inventory based on expiration dates. For example, if two batches of protein bars are in stock—one expiring in 20 days and another in 45 days—the system ensures the 20-day stock ships first, even if the 45-day batch arrived earlier.

How FEFO Works in Practice

Consider a health supplement warehouse receiving multiple batches weekly. Without FEFO, staff might accidentally ship newer batches with longer shelf life whilst older stock approaches expiration in the back of the warehouse.

FEFO in Action:

Monday: Receive Batch A (expires in 60 days) Wednesday: Receive Batch B (expires in 90 days) Friday: Receive Batch C (expires in 45 days)

Traditional FIFO approach: Ships Batch A first (oldest receipt) FEFO approach: Ships Batch C first (shortest remaining life)

The system continuously monitors all stock expiry dates and automatically directs pickers to the items closest to expiration. This happens seamlessly across thousands of SKUs without manual intervention.

Real-World Application: A cosmetics distributor implemented FEFO after writing off £50,000 in expired stock annually. Now their system:

• Alerts when products have 90 days remaining shelf life

• Automatically prioritises near-expiry items for promotional channels

• Prevents receiving stock with insufficient remaining life

• Provides customers with maximum useable product life

Common Challenges and Practical Solutions

Mixed Batch Storage

The Challenge: When multiple batches with different expiry dates occupy the same location, pickers struggle to identify which items to select. Manual checking slows operations and increases errors.

The Solution: Modern FEFO systems enforce batch separation at putaway. Each batch receives a unique location, with the system directing picks based on expiry date. For operations requiring mixed storage, clear batch labelling and system-enforced pick sequences maintain FEFO compliance.

Expiry Date Data Quality

Poor expiry date capture at goods-in undermines the entire FEFO process. Common issues include:

• Illegible date codes

• Various date formats

• Missing expiry information

• Manual data entry errors

Robust solutions incorporate:

• Mandatory date validation at receiving

• Barcode/QR code scanning of batch information

• Supplier data integration

• Exception workflows for missing dates

Customer Shelf Life Requirements

The Challenge: Different customers demand different remaining shelf life. Retailers might require 75% remaining life, while direct consumers accept 30%.

The Solution: Configure customer-specific rules within your order management software. The system automatically allocates inventory based on customer requirements whilst maintaining overall FEFO principles.

Business Impact of FEFO Implementation

Proper FEFO management delivers significant benefits across the operation:

Waste Reduction Businesses typically reduce expired stock write-offs by 70-90% after implementing systematic FEFO. This improvement directly impacts profitability, particularly for businesses handling high-value perishables.

Compliance Assurance In regulated industries like pharmaceuticals and food, FEFO compliance is often legally required. Systematic FEFO provides complete audit trails, protecting against regulatory penalties and liability claims.

Customer Satisfaction Customers receive products with maximum useable life, reducing complaints and returns. This is particularly crucial for subscription box businesses where customers expect fresh products.

Inventory Optimisation FEFO visibility helps purchasing teams make informed decisions. Clear ageing reports prevent over-ordering whilst ensuring adequate stock coverage. This balance is essential for effective inventory management.

Key Metrics to Monitor

Effective FEFO management requires tracking:

• Stock Age Profile - Percentage of inventory in different age brackets

• Expiry Write-offs - Value and volume of expired stock

• Near-Expiry Alerts - Items approaching expiration thresholds

• Remaining Shelf Life at Dispatch - Average days remaining when shipped

• FEFO Compliance Rate - Percentage of picks following FEFO rules

• Customer Shelf Life Achievement - Meeting specific customer requirements

Regular monitoring identifies issues before they become costly problems. Learn more about essential inventory turnover metrics.

Frequently Asked Questions

Is FEFO only for food and pharmaceuticals?

While crucial for perishables, FEFO benefits many industries:

• Cosmetics and personal care (stability concerns)

• Chemicals and adhesives (effectiveness degradation)

• Electronics (warranty periods)

• Fashion (seasonal relevance)

• Any product with date-based value depreciation

How does FEFO handle products without printed expiry dates?

For products with shelf life but no printed dates, the system calculates expiry based on:

• Receipt date plus defined shelf life

• Manufacturing date from batch codes

• Supplier-provided expiry data

• Best-before calculations from production dates

Can we override FEFO for specific orders?

Yes, but with controls. Valid override scenarios include:

• Customer requesting specific batches

• Export orders requiring maximum shelf life

• Product recalls affecting specific date ranges

• Quality hold situations

All overrides should be tracked and justified for audit purposes.

How complex is FEFO implementation?

Basic FEFO can be implemented quickly if you have:

• Accurate expiry date capture

• Batch tracking capability

• System-directed picking

Complex scenarios (multiple shelf life requirements, dynamic date calculations) require more configuration but deliver proportionally greater benefits.

Integration Considerations

Successful FEFO implementation requires:

Data Capture:

• Barcode scanning for batch/expiry data

• Quality control at receiving

• Validated date formats

• Integration with supplier systems

System Capabilities:

• Batch tracking functionality

• Expiry date storage and calculation

• Pick face allocation by date

• Automated alerts and reporting

Process Requirements:

• Segregated batch storage

• Clear labelling standards

• Staff training on FEFO principles

• Regular date audits

Supporting Features:

• Exception management workflows for near-expiry stock

• Integration with returns management for date validation

• Reporting tools for age analysis

Alternative Approaches to Stock Rotation

Manual Date Checking

Staff physically check dates during picking. Labour-intensive, error-prone, and impractical for large operations. Often results in expired stock discoveries during cycle counts.

FIFO (First-In, First-Out)

Ships oldest received stock first. Simpler than FEFO but inadequate for perishables. Can result in shipping expired products if batches have varying shelf lives. Learn more about FIFO principles.

Visual Management

Colour-coded labels or zone organisation by expiry date. Helpful visual aid but lacks system enforcement and scalability. Works for small operations with limited SKUs.

System-Enforced FEFO

Automated expiry tracking with system-directed picking ensuring compliance. Scalable, auditable, and error-free. Essential for businesses serious about waste reduction and compliance.

Next Steps: Implement Robust FEFO Management

Assess your current stock rotation challenges:

• Current expired stock write-off levels

• Customer complaints about short-dated products

• Time spent manually checking dates

• Compliance requirements for your industry

Schedule a Consultation to explore how automated FEFO could reduce waste and improve customer satisfaction in your operation.

Related Topics: FIFO (First-In-First-Out) | Batch Tracking | Expiry Date Tracking