Implementing FEFO in Warehouse Operations

Implementing FEFO in warehouse operations transforms a conceptual inventory rule into day-to-day disciplined practices. For a technical beginner, the implementation can be broken into four domains: data capture and labeling, warehouse processes and layout, technology and system configuration, and performance management. Each domain contains concrete steps and decisions that affect compliance, cost, and operational throughput.

1) Data capture and labeling

• Mandatory expiry capture at receipt: Configure incoming inspection to require scanned capture of manufacture and expiry dates, batch/lot numbers, and quantity. Do not allow receipts to be completed without these fields populated.
• Standard label formats: Use machine-readable labels (barcode, GS1-128) including expiry in a consistent format (e.g., YYYYMMDD). Place labels at the same location on pallets and cartons to simplify visual checks.
• Secondary labels: For inner packs or repacked units, apply secondary labels that include the lot and expiry so FEFO can be enforced at all picking levels.

2) Warehouse processes and layout

• Dedicated FEFO lanes: Organize storage so that different expiry ranges occupy different pick faces or lanes. This reduces the chance of selecting later-expiry stock ahead of earlier-expiry items.
• Putaway rules: Put items into locations that preserve FEFO order — either consolidate same-lot items together or sequence putaway by expiry so that the earliest expiry is most accessible.
• Pick face management: Maintain pick faces with visible expiry tags and frequent audits. Use color-coding or shelf-edge flags for items with imminent expiry.
• Cross-docking and staging: For high-turn items nearing expiry, prioritize cross-dock flows to move product directly to outbound rather than long-term storage.

3) Technology and system configuration

• WMS capability: Ensure your Warehouse Management System supports lot-level inventory, expiry date fields, and pick sequencing based on expiry. Configure pick strategies so the system suggests the lot with the earliest expiry by default.
• Barcoding and scanning: Enforce barcode scanning during pick and pack to confirm the chosen lot matches the system-suggested FEFO lot. Use exceptions when manual overrides occur and log reasons.
• Integration with ERP/TMS: Share expiry and lot data across order management to avoid allocating longer-life stock to high-priority orders when short-life stock is available.
• Alerts and dashboards: Build dashboards for near-expiry inventory, days-to-expiry distribution, and recommended actions (promotions, transfers, write-offs).

4) Performance management and governance

• SOPs and training: Develop SOPs for receipt, putaway, picking, returns, and disposals that incorporate FEFO rules. Train staff with practical exercises and spot-checks.
• Exception handling: Define and log acceptable overrides (e.g., urgent customer requests, damaged batch) and require managerial approval for non-standard picks.
• KPIs and audits: Track FEFO compliance rate, expiry-related shrinkage, and time-to-action for near-expiry stock. Conduct periodic physical audits comparing system lots to physical labels.

Practical example: configure a WMS pick rule

1. At receipt, capture lot and expiry and create inventory lot records.
2. Set pick rule priority to: 1) earliest expiry date, 2) earliest received among same-expiry, 3) closest location.
3. During pick, the WMS displays recommended lot; picker scans the item’s lot barcode and the system confirms or rejects the pick.
4. If rejected due to mismatch, the system forces a re-evaluation and records the override reason if the supervisor authorizes a different lot.

Operational considerations and trade-offs

• Throughput vs control: Strict FEFO adds scanning and verification steps that can slow picking throughput. Balance speed with risk: high-risk SKUs should have strict enforcement; low-risk SKUs may allow lighter controls.
• Storage efficiency: Constant reorganization to maintain FEFO order can reduce space efficiency. Use dynamic slotting tools to optimize pick face allocation while preserving expiry order.
• Return flows: Implement special processing for returns — returned goods should be quarantined, quality-checked, and relabeled with correct expiry dates before re-entering FEFO-active stock.

Integration with promotional and commercial operations

Communicate near-expiry stock to commercial teams so they can create promotions or reassign product to customers who can consume it quickly. In perishable food and pharmaceuticals, coordinating FEFO with demand planning reduces markdowns and write-offs.

Common implementation pitfalls and mitigations:

• Poor data quality: Mitigation: enforce mandatory expiry fields at receipt, with validation rules and rejection of incomplete receipts.
• Manual overrides without controls: Mitigation: require supervisory approvals and automate logging of override reasons.
• Mismatch between physical and system labels: Mitigation: institute frequent cycle counts focusing on high-risk SKUs and reconcile label legibility standards.

Beginner checklist for rollout:

1. Pilot FEFO on a defined SKU set.
2. Update WMS to capture expiry and suggest FEFO picks.
3. Standardize expiry labels and train receiving staff.
4. Create SOPs and exception workflows.
5. Monitor KPIs and refine processes before wider rollout.

In short, implementing FEFO requires an attention to data, warehouse flows, technology configuration, and governance. When executed well, FEFO minimizes expiry losses, improves compliance, and provides measurable operational benefits.