First In - First Out (FIFO) is a warehouse strategy in which items that arrive in the warehouse first are also used first.
FEFO stands for “First Expired First Out” and ensures that products with the earliest expiration date are sold first. This inventory management principle helps prevent product waste and makes sure that end consumers receive products with sufficient remaining shelf life.
A typical example of the FEFO strategy is how fresh fruit is handled in supermarkets. Fruit is placed so that older products are positioned at the front, while newly arrived goods are further back. This setup ensures that perishable products are sold more quickly – and customers always pick up fresh fruit.
With the FIFO strategy – First In, First Out – the decisive factor is solely the time of storage.
FEFO, on the other hand, additionally takes into account the best-before date or expiration date. Both strategies are particularly suitable for the batch-driven process manufacturing industry.
The FEFO principle (First Expired, First Out) offers companies that work with perishable or time-sensitive goods numerous benefits compared to other inventory strategies:
The FEFO principle plays a crucial role in various industries to ensure quality, safety, and efficiency. The following explains why the FEFO principle is particularly important in the food industry, cosmetics industry, pharmaceutical industry, and chemical industry.
The FEFO principle is of critical importance in the food industry to ensure the quality and safety of products. Food has a limited shelf life, and if consumed beyond this date, it can become harmful to health. By applying the FEFO principle, products that expire first are sold or used first, reducing the risk of food poisoning and waste. It also contributes to more efficient inventory management and ensures product freshness for consumers.
In the cosmetics industry, the FEFO principle is equally important, as many cosmetic products have a limited shelf life. Products that are stored for too long may lose their effectiveness or even cause skin irritation and allergic reactions. By applying the FEFO principle, products that expire first are used first, safeguarding the quality and safety of products for consumers. At the same time, it helps companies manage their inventory efficiently and minimize losses from expired products.
In the pharmaceutical industry, the application of the FEFO principle is essential, as medicines and other pharmaceutical products have precise expiration dates after which they lose effectiveness or may even become harmful. Strict application of the FEFO principle ensures that products expiring first are delivered and used first, maintaining both the safety and efficacy of medicines. This is vital not only for health reasons but also for legal and ethical considerations, since patient care must always come first.
In the chemical industry, the FEFO principle is particularly important for ensuring the stability and safety of chemical products. Many chemicals have a limited shelf life and may change properties or even become dangerous once expired. By adhering to the FEFO principle, products that expire first are used first, which increases safety when handling chemicals and reduces the risk of accidents or unexpected reactions. It also supports efficient inventory management and minimizes losses due to expired products.
In all of these industries, the FEFO principle not only helps safeguard the quality and safety of products but also increases operational efficiency and reduces financial losses. Implementing this principle is therefore an essential part of effective inventory management and makes a significant contribution to the success and sustainability of companies.
To implement the FEFO principle successfully, companies should follow these steps:
Challenges that frequently arise with the FEFO strategy include:
Monitoring the warehouse efficiently and clearly requires ongoing effort. If control is neglected, companies lose track of their inventory, which reduces the effectiveness of the strategy.
Applying the FEFO strategy quickly reaches its limits if employees are not sufficiently trained. To ensure this on a long-term basis, companies must provide adequate time and resources.
To plan the use of products effectively, they must be labeled in a clear and traceable way in advance. If such labeling is missing, questions arise, confusion occurs, and the functionality of the strategy is impaired.
Depending on demand, it may happen that freshly delivered products expire and need to be disposed of. This not only creates extra work but also costs, as the products were already purchased and disposal also incurs expenses.
Yaveon 365 provides comprehensive support for implementing the FEFO strategy, ensuring optimized warehouse management and processes.
Some typical inventory strategies are:
FIFO (First In First Out) simply explained – Beitrag öffnen
First In - First Out (FIFO) is a warehouse strategy in which items that arrive in the warehouse first are also used first.
Batch management explained simply – Beitrag öffnen
Batch management optimizes item-specific storage and tracking of goods using a unique lot number.
Sustainability in the food industry – Beitrag öffnen
How an ERP system for food production helps to reduce waste, lower CO₂ emissions and promote sustainable processes.
