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 expiry date are sold first. This storage principle helps to avoid product waste and ensures that end consumers receive products with sufficient remaining shelf life.
A typical example of the use of the FEFO storage strategy is the handling of fresh fruit in supermarkets. Fruit is placed in such a way that older products are further forward and freshly arrived goods are further back to ensure that perishable products are sold more quickly. This also ensures that customers always reach for fresh fruit.
With the FIFO storage strategy, i.e. First In - First Out, only the storage time is decisive.
FEFO, on the other hand, also takes into account the best-before or expiry date. The storage strategies are particularly suitable for the batch-controlled process manufacturing industry.
The FEFO principle (First Expired, First Out) offers companies that work with perishable or time-critical goods numerous benefits over other storage 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 of particular importance in the food industry, cosmetics industry, pharmaceutical industry and chemical industry.
The FEFO principle is crucial in the food industry to ensure the quality and safety of products. Food products have a limited shelf life and if they are used beyond this date, they can become harmful to health. Applying the FEFO principle ensures the products that expire first are sold or used first, reducing the risk of food poisoning and waste. This also helps to ensure that stock levels are managed more efficiently and that the freshness of products is guaranteed for consumers.
In the cosmetics industry, the FEFO principle is also of great importance, as many cosmetic products have a limited shelf life. Overstocked products can lose their effectiveness or even cause skin irritation and allergic reactions. Applying the FEFO principle ensures that the products that expire first are used first, ensuring the quality and safety of the products for consumers. It also helps companies to manage their inventories efficiently and minimize losses due to expired products.
Applying the FEFO principle in the pharmaceutical industry is essential, as medicines and other pharmaceutical products have exact expiration dates after which they can lose their effectiveness or even become harmful to health. Strict application of the FEFO principle ensures that the products that expire first are delivered and used first, which guarantees the safety and efficacy of the medicines. This is important not only for health reasons, but also for legal and ethical considerations, as patient care is the top priority.
In the chemical industry, the FEFO principle is particularly important to ensure the stability and safety of chemical products. Many chemicals have a limited shelf life and can change their properties or even become dangerous after this time. Adhering to the FEFO principle ensures that the products that expire first are used first, which increases safety when handling chemicals and reduces the risk of accidents and unexpected reactions. It also contributes to efficient storage and minimization of losses due to expired products.
In all the industries mentioned, the FEFO principle not only helps to ensure the quality and safety of products, but also to increase operational efficiency and reduce financial losses. The implementation of this principle is therefore an essential part of effective inventory management and contributes significantly to the success and sustainability of companies.
To successfully introduce the FEFO principle, companies should go through the following steps:
Challenges that often arise with the FEFO warehouse strategy:
Monitoring the warehouse efficiently and clearly requires continuous monitoring work. If monitoring is neglected, companies lose the overview, which reduces the efficiency of the warehouse strategy.
The application of the FEFO strategy quickly reaches its limits if the employees involved are not sufficiently trained. In order to achieve this in the long term, companies must provide sufficient time and resources.
In order to be able to plan products and their use sensibly, they must be clearly and comprehensibly labeled in advance. If such labeling is missing, questions arise, confusion arises and the functioning of the warehouse strategy is impaired.
Depending on demand, delivered fresh products may expire and have to be disposed of. This not only creates work, but also costs. After all, the products were paid for when they were purchased and disposal also incurs costs.
The Yaveon 365 industry-specific ERP solution offers comprehensive solutions to support the FEFO strategy and ensures optimized warehouse management and processes.
Some typical storage strategies are
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