Why stock expires on a full shelf
Most expiry losses are not caused by slow sales. They happen because the wrong carton left the shelf. A picker takes the pallet nearest the aisle, a new delivery is stacked in front of older stock, or a return goes back on the shelf with nobody checking its date. Weeks later the older lot is found behind the newer one, already past its date.
The fix is a rule that does not depend on anyone’s memory: the stock that expires first leaves first. That rule is called FEFO, first expired, first out, and it only works when every lot carries its date in the system from the moment it arrives.
FEFO is not the same as FIFO
FIFO, first in, first out, sends out whatever arrived first. For goods with a uniform shelf life it gives the same answer as FEFO. For food, drinks, cosmetics and medicines it often does not. A supplier may ship an older production run after a newer one, or two plants may produce with different shelf lives.
FEFO looks at the expiry date, not the receipt date. When the two disagree, FEFO is the rule that keeps you from throwing stock away. In the example below, FIFO would leave 25 cartons that expire on 20 Dec; FEFO leaves 25 that last until 15 Jan.
TipBefore choosing a picking rule, list the items where a later receipt can carry an earlier expiry date; those are the items FIFO will get wrong.
Record the lot and expiry date at receipt
FEFO is only as good as the dates behind it. The receiving team must capture the lot number and expiry date of every lot as it is put away, not later from memory. A lot entered without a date cannot be ranked, and a lot entered with the wrong date will be picked in the wrong order.
- Mark each item that expires as lot-tracked before its first receipt.
- At the dock, read the lot number and expiry date from the carton, not from the delivery note.
- Do not put away a new lot until its expiry date is entered.
- If one delivery holds two lots of the same item, record them as two lines.
- Label the pallet with its lot and expiry date so pickers can confirm what they take.
TipAgree with each supplier the minimum shelf life you accept on delivery, and check it at the dock before signing for the goods.
Let the system choose the lot, not the picker
Once the dates are recorded, the pick should name the lot for the picker. When an order line names no lot, the system should take the soonest-expiring stock in the bin, then the next, until the quantity is covered. The picker’s job is to confirm the lot on the label, not to decide.
Name a specific lot only when the customer asks for one, for example a chain that wants a single production run in each delivery. Everyone else gets the default rule.
- Keep one item’s lots in as few bins as possible, so older stock cannot hide behind newer.
- Put new receipts behind or below existing stock, never in front of it.
- If the soonest lot is not where the pick says, stop and fix the bin record rather than taking the nearest carton.
- Count fast-moving lot items often, so the lot balances in the system match the shelf.
Act on short-dated stock while it can still be sold
FEFO slows expiry but does not stop it. Some customers will not accept goods with less than a set number of days left, so stock becomes unsellable to them before its printed date. Review lots against that threshold every week, not when they expire.
Short-dated goods have options while time remains: move them to a route or van whose customers turn stock faster, offer them at a cleared price, or agree a return with the supplier. Each option recovers more than a write-off.
TipSet the review threshold at the longest minimum shelf life any of your main customers demands, so no lot reaches a customer who will refuse it.
Vans and returns carry dates too
In van sales, the van is a small warehouse, and its stock ages the same way. Load vans from the soonest-expiring lots that the route can sell before the customers’ threshold, and unload slow stock back to the warehouse before it ages on the road.
Returns are the other leak. A carton that comes back from a customer must come back with its lot, be checked, and either return to sellable stock with its own date or be set aside. A return put back on the shelf without its lot breaks the order that FEFO depends on.
Keep picking and costing apart
Which lot leaves and what it costs are two different decisions. You can pick first expiry and still value stock at weighted average cost, or choose to value it by first expiry as well. Decide the costing method per item with your accountant, and do not change the picking rule to settle a costing question.
Checklist: FEFO checklist
- List every item with an expiry date and mark it lot-tracked
- Record lot and expiry on every receipt line
- Agree a minimum shelf life on delivery with each supplier
- Pick soonest expiry first unless the customer names a lot
- Stack new receipts behind existing stock
- Review short-dated lots weekly against customer thresholds
- Load vans from lots the route can sell in time
- Bring every return back with its lot and check it