All About the FEFO Stock Rotation Rule
Keeping your stock rotated is essential to ensure it’s fresh, ready and safe to use, and to minimise wastage. Correct stock rotation must alway follow the FEFO rule, that is ‘first to expire is first out’.
So, what is the FEFO rule?
According to the Australian Food Cold Chain Logistics Guidelines, the FEFO rule ensures that stock that has been stored for the longest time is used first. This stock rotation principle is used in many cold chains internationally to minimise wastage.
However, without a proper management system, it is usually the most recently arrived stock that is easily accessible, and so the first used, resulting in the opposite of FEFO.
It’s important to take note of your product’s expiry dates, rather than simply how long you have been storing them. FEFO may seem the same as FIFO (first in, first out), which assumes that the product in storage for the longest has the earliest expiry date.
This is not always the case, as variations in stock supply and rotation earlier in the cold chain may mean that products arrive out of expiry date sequence. So, focus on ‘expiry date’ rather than ‘arrival date’ to determine which products to use first.
How can you implement the rule?
To use correct stock rotation in your business, you need:
- Product identification: Make sure all products are clearly labelled with product identification details, received date and expiry date.
- Product location: Create a system to record and monitor the location of your products within storage.
- Product handling: Manage your storage system to ensure correct product handling and that products with the soonest expiry are used first.
There are third party inventory management systems available ranging from off-the-shelf computer programs through to full automated receipt, storage and dispatch systems. However, for small companies a simple pen and paper system might be enough.