FEFO — What FEFO Means and Why It Matters

FEFO stands for First Expired, First Out. At its simplest, FEFO is an approach to inventory rotation that ensures the items with the nearest expiration dates are used or shipped before those that expire later. Unlike FIFO (First In, First Out), which prioritizes the order items entered inventory, FEFO prioritizes the order in which items will no longer be fit for sale or use.

FEFO is widely used in industries where shelf life matters: food and beverage, pharmaceuticals, chemicals, cosmetics, and any operation handling time-sensitive or perishable products. Its primary goals are to reduce waste from expired goods, maintain product safety and quality, and comply with regulatory or contractual requirements.

Why FEFO matters:

• Safety and compliance: Shipping or using expired products can create health risks and legal problems. FEFO helps prevent such events by keeping track of expiration dates.
• Reduced waste: By prioritizing items that will expire soon, organizations lower the volume of products that must be destroyed or returned.
• Customer satisfaction: Delivering fresh, in-date products supports brand reputation and reduces customer complaints and returns.
• Financial control: Waste reduction translates to lower write-offs and improved margins.

How FEFO works in practice:

1. During receiving, staff record the expiration or best-before dates on incoming batches. This is typically done by scanning barcodes or manually entering dates into an inventory system.
2. Inventory locations are labeled and organized so that items close to expiry are easy to access. Slotting and storage layout aim to reduce picking time while preserving correct rotation.
3. Pickers follow FEFO rules when selecting stock for orders or production. If a picking system is used, it will direct operators to the correct bins containing goods with the earliest expiry dates.
4. Regular monitoring and reporting flag any items approaching expiration so managers can prioritize promotions, transfers, or other corrective actions.

Common FEFO scenarios and examples:

• Grocery store: A supermarket uses FEFO to ensure milk cartons with the earliest sell-by dates are placed at the front for sale, while newer cartons go to the back. This reduces the amount of dairy that reaches its expiry unsold.
• Pharmacy: A pharmacy tracks lot numbers and expiration dates for vaccines and other medicines. When fulfilling prescriptions, pharmacists pull stock with the earliest expiration dates first, preventing expired medication from being dispensed.
• Food manufacturer: A production facility uses FEFO for raw ingredients like oils or flavor concentrates that have limited shelf life. Ingredients with nearer expiry are used first to avoid having to discard partially used lots.

FEFO vs FIFO — what's the difference?

FEFO focuses on expiration dates; FIFO focuses on receipt dates. In many cases the two align (items received earlier often expire earlier), but they can diverge when suppliers ship mixed-dated lots, or when shelf life varies between batches. FEFO is essential when shelf life—not just arrival order—determines suitability for sale or use.

Tools that support FEFO:

• Warehouse Management Systems (WMS): Modern WMS can store expiration data, enforce picking rules, and guide pickers to the correct locations.
• Barcode and RFID systems: Scanning ensures the right lot and expiry date are recorded and reduces human error.
• Labeling solutions: Clear shelf, pallet, and carton labels display expiration dates and lot numbers to help staff identify priority stock quickly.

Simple tips for beginners starting with FEFO:

• Start by requiring expiration dates on all incoming goods that are time-sensitive.
• Create a receiving checklist that includes verifying dates and lot numbers.
• Use clear labeling—large, visible expiry dates on pallets and storage bins.
• Train staff on why FEFO matters and how to follow it during picking and restocking.
• Implement low-tech controls first (e.g., signage and manual checks), then plan to scale with software as volume grows.

Challenges and considerations:

• Mixed lots: When multiple lots with different expiry dates are stored together, careful tracking is needed to avoid mistakes.
• Data accuracy: FEFO depends on correct expiration information. Mistakes at receiving or in the system can invalidate rotation efforts.
• Space and slotting: Efficient grouping by expiry can require different storage layouts, especially for high-velocity items.

Key performance indicators to measure FEFO effectiveness include percentage of stockout due to expired items, volume or value of expired goods, pick accuracy for FEFO picks, and days of inventory by nearest expiration. Regular audits and cycle counts that include expiry verification help keep the system reliable.

In short, FEFO is a targeted rotation method that protects consumers, reduces waste, and preserves product value. For anyone handling perishable or time-sensitive inventory, learning to apply FEFO correctly is a high-impact, beginner-friendly step toward a more efficient and compliant supply chain.