Definition
FEFO stands for first expiry, first out. It is an inventory rotation method where the stock with the earliest expiry date is always picked and dispatched first, regardless of when it was received.
How FEFO works
When a warehouse receives multiple batches of the same product with different expiry dates, FEFO ensures that the batch expiring soonest is used first. Pick lists are generated with the shortest-dated lot at the top, directing warehouse staff to the correct location.
- Receive: record the expiry date for each lot at goods-in
- Store: stock is stored with lot and expiry information linked to its warehouse location
- Pick: the system generates pick lists prioritising the lot with the earliest expiry date
- Alert: automatic notifications warn when stock approaches its expiry date
FEFO vs FIFO
FIFO (first in, first out) picks stock in the order it was received. FEFO picks stock based on expiry date. In most cases, FIFO and FEFO produce the same result because older stock typically has an earlier expiry. However, they differ when a newer delivery has a shorter shelf life than existing stock - FEFO ensures the shorter-dated batch ships first.
| Method | Picks based on | Best for |
|---|---|---|
| FIFO | Date received | Non-perishable goods |
| FEFO | Expiry date | Perishable goods with shelf life |
| LIFO | Most recently received | Non-perishable goods where newest stock is most accessible |
When to use FEFO
- Food and beverage distribution
- Pharmaceutical and supplement warehouses
- Cosmetics with shelf life limitations
- Any product with a printed expiry, use-by, or best-before date
Benefits of FEFO
- Reduced waste: short-dated stock is dispatched before it expires
- Customer satisfaction: customers receive products with the longest remaining shelf life available
- Compliance: food safety regulations often require FEFO or equivalent rotation
- Lower costs: less stock written off due to expiry