Implementing FEFO in Your Warehouse: Best Practices and Common Mistakes

Moving from the idea of FEFO (First-Expire, First-Out) to a reliable daily practice in a warehouse involves people, processes, and technology. For beginners, implementation can seem daunting, but by breaking it into clear steps and avoiding common pitfalls, FEFO becomes a predictable way to reduce spoilage and improve customer safety. This article provides a practical roadmap, best practices, and the mistakes to watch for.

Step-by-step implementation roadmap

1. Classify SKUs: Start by identifying which SKUs require FEFO. Not all items do. Create a clear rule: perishable items, regulated pharmaceuticals, temperature-sensitive products, and any SKU with a meaningful expiry should be flagged as FEFO in the WMS.
2. Standardize date formats: Agree on a consistent date format (e.g., YYYY-MM-DD) and ensure suppliers and internal teams use it. Inconsistent formats cause errors during capture and scanning.
3. Labeling and lot tracking: Require batch or lot numbers and clear expiry dates on every case or pallet. Use barcodes or QR codes that encode expiry and lot for scan-to-verify workflows. If possible, capture expiry at UOM (unit of measure) granularity for greater control.
4. WMS configuration: Configure your WMS to accept expiry dates at receipt, maintain lot-level records, and prioritize picks by earliest expiry. Create alerts for short-dated incoming stock and rules for minimum remaining shelf life at shipping.
5. Receiving controls: Train receiving staff to check expiry dates and scan lot labels. Quarantine any items with missing, illegible, or suspicious dates until resolved with the supplier.
6. Storage design and physical flow: Design pick faces, flow racks, or lanes by expiry window. Use clear signage and color coding to highlight short-dated stock. For very short-dated items, dedicate a clearance area that feeds special promotions or expedited shipping.
7. Picking and validation: Implement a scan-and-verify picking process so the WMS confirms that the selected lot matches the FEFO rule. Mobile devices should warn pickers if they try to select a later-expiring batch.
8. Training and SOPs: Create easy-to-follow standard operating procedures and train staff regularly. Include examples and role-play scenarios to build practical competence.
9. Monitoring and continuous improvement: Track KPIs such as expired stock percentage, write-offs, returns related to shelf life, and incidents of incorrect picks. Use data to refine rules and layout.

Best practices

• Enforce supplier requirements: Include expiry and lot labeling standards in supplier contracts and EDI specifications to reduce exceptions at receiving.
• Use technology wisely: Barcode or RFID capture reduces manual errors. Ensure your WMS has user-friendly exceptions handling and expiry-based pick logic.
• Separate short-dated stock: Flag and segregate short-dated inventory on receipt and create expedited promotion or sale channels to move it quickly.
• Run regular audits: Frequent cycle counts on FEFO SKUs catch misplacements or labeling mistakes before they cause customer issues.
• Design intuitive layouts: Make the right pick the easy pick. Visual cues, color-coded zones, and logical flow reduce human error.
• Establish clear escalation paths: Define who resolves short-dated shipments, supplier disputes, or suspected labeling fraud.

Common mistakes and how to avoid them

• Missing or illegible expiry dates: This is the most frequent issue. Solution: reject or quarantine goods until the supplier provides clear information and require improved labeling for future shipments.
• Relying solely on physical FIFO layouts: If arrival order doesn’t match expiry, physical FIFO racks alone will fail. Solution: enforce system checks and scanning rules that override physical placement when necessary.
• Insufficient WMS support: Picking by expiry manually is error-prone. Solution: ensure WMS supports expiry-based picks and lot traceability before scaling FEFO operations.
• Poor communication with suppliers: Late notifications of short-dated shipments cause surprises. Solution: require advance shipment notices (ASNs) that include expiry and lot data.
• Inadequate staff training: Workers must understand why FEFO matters. Solution: regular training, clear SOPs, and on-the-job coaching reduce mistakes.
• Lack of exception handling: No defined process for short-dated, damaged, or mislabeled goods leads to delays. Solution: document quarantine, return, and disposition procedures and assign owners.

Measuring FEFO effectiveness

• Expired inventory rate: Percentage of inventory that expired before sale; the lower, the better.
• Write-offs and disposal costs: Track costs associated with disposing expired stock to measure financial impact.
• On-time shipments with required shelf life: Percentage of outbound shipments meeting customer-required remaining shelf life.
• Accuracy of expiry capture: Share of receipts with correct and scannable expiry/lot data.

Final tips for beginners

Start small: pilot FEFO on a subset of SKUs, validate processes and WMS rules, then expand. Use clear labeling and enforce supplier standards to reduce exceptions. Make FEFO visible: dashboards that show short-dated stock and upcoming expiries focus attention where it matters. With the right mix of technology, layout, and people, FEFO becomes a reliable approach that protects customers and reduces waste.