FEFO: First-Expire, First-Out Explained

FEFO, which stands for First-Expire, First-Out, is an inventory management principle used to make sure products with the earliest expiration dates are used or shipped first. Unlike purely chronological systems that rely on the order of arrival, FEFO focuses on the product's shelf life. This simple idea prevents expired goods from reaching customers, reduces spoilage and write-offs, and helps organizations meet regulatory and safety requirements.

At its core, FEFO sorts inventory by expiry date. When multiple lots or batches of the same SKU exist, the batch with the nearest expiry is selected for picking and shipping regardless of when it was received. FEFO is especially important in industries where product integrity is tied to a finite shelf life: fresh foods, beverages, dairy, pharmaceuticals, nutraceuticals, vaccines, and some chemicals are typical examples.

How FEFO works in practice can be illustrated with a simple example: a warehouse stores yogurt from three different deliveries. Batch A expires in 10 days, Batch B in 25 days, and Batch C in 40 days. Under FEFO, pickers will take units from Batch A first, then B, then C, ensuring that the earliest-expiring product is consumed or shipped before later-expiring stock.

Benefits of FEFO

• Reduced waste and write-offs: By prioritizing items with the shortest remaining shelf life, organizations lower the chance that products will expire on the shelf.
• Improved food and product safety: FEFO decreases the risk of distributing expired or unsafe products, which protects consumer health and brand reputation.
• Regulatory compliance: Many food and pharmaceutical regulations require traceability and controls around expiry. FEFO helps meet those obligations.
• Better inventory valuation: Avoiding expired stock preserves inventory value and reduces losses on the balance sheet.
• Enhanced customer satisfaction: Delivering product with adequate remaining shelf life ensures customers can use goods as intended, improving trust and reducing returns.

When to use FEFO

• Whenever products have a meaningful expiry date or best-before date.
• When customer agreements or regulations require minimum remaining shelf life upon delivery.
• On seasonal promotional items with limited sell-through windows.

FEFO vs. other rotation methods

FEFO is sometimes confused with FIFO (First-In, First-Out). FIFO moves goods in the order they arrived; it often works well for non-perishable items or when older stock has earlier expiry. However, FIFO can fail when later deliveries have shorter shelf lives than earlier ones. FEFO explicitly ranks stock by expiry date and overrides arrival order when necessary. LIFO (Last-In, First-Out) and other methods are rarely appropriate for perishables because they can increase the risk of expired goods.

Implementation considerations

1. Clear date labeling: Every pallet, case, or unit should display manufacture and expiry dates in a consistent, visible format. Use barcode or QR labels that encode expiry information to enable scanning and system checks.
2. WMS support: A warehouse management system (WMS) that supports FEFO logic is invaluable. The WMS should track batch/lot numbers, expiry dates, and suggest picks based on earliest expiry, not just arrival sequence.
3. Receiving controls: During receiving, validate expiration dates, capture them into the system, and segregate damaged or near-expiring stock for special handling or markdown.
4. Storage layout: Design storage to make FEFO picking intuitive—use clearly labeled pick faces or flow racks arranged by expiry windows so pickers naturally select the correct items.
5. Staff training: Train warehouse staff to recognize expiry information and follow FEFO procedures, including how to handle exceptions.
6. Quality checks: Regular audits and cycle counts should verify that FEFO rules are followed and that no expired product remains in active inventory.

Common challenges and solutions

• Mixed or missing dates: If units arrive without clear expiry information, receiving should quarantine them until resolved. Implement supplier requirements for consistent date coding.
• Short-dated incoming batches: When suppliers send stock with short remaining shelf life, decide whether to accept, reject, or route to special sale channels. FEFO helps surface these risks early.
• System gaps: If your WMS lacks FEFO support, use barcode scanning rules or temporary manual controls while planning a system upgrade.
• Human error: Visual layouts and frequent training reduce picking mistakes; scan-to-verify features on mobile devices provide an extra safety net.

FEFO is a straightforward but powerful principle: use the oldest-expiring items first. For beginners, the best first steps are consistent date labeling, process changes at receiving and picking, and simple WMS rules that prefer earliest expiry. Done well, FEFO saves money, protects customers, and keeps supply chains compliant and reliable.