FIFO means first in, first out. FEFO means first expiring, first out. They are not interchangeable. When shelf life matters, the newest delivery may need to ship first if it expires sooner than older inventory. Your operating rules should follow product requirements and applicable safety standards.
Start with accurate lot-level records. At receipt, capture the item, lot or batch number, quantity, manufacturing or expiry date when available, storage location, and any quality hold status. Confirm the label before creating an electronic batch record. An incorrect expiry date is worse than a missing one because it can make unsafe stock appear eligible for sale.
Example: Batch A arrives on October 3 and expires November 20. Batch B arrives on October 10 but expires November 5. FIFO would usually pick Batch A. FEFO picks Batch B first because it expires earlier, assuming both batches are acceptable for release. Quality holds and customer minimum-shelf-life rules still take precedence.
Keep a review list of batches near a business-defined expiry threshold. Sort by earliest expiry, then estimate quantity at risk using unit cost. Assign a person to review the list and decide whether stock should be prioritized, transferred, discounted under permitted rules, or written off. Do not automatically sell product that fails safety or customer standards.
Make physical storage support the system. Separate batch labels, use readable location tags, and avoid combining loose units from different lots in unlabeled bins. Train pickers to verify lot and date, not just SKU.
At count time, count by batch when traceability matters. A system total of 90 units is not adequate if 30 units expired yesterday and 60 expire next quarter.
A simple batch tracker can include: item code, lot, received date, expiry date, quantity, reserved quantity, available quantity, location, and days remaining. Add conditional formatting for upcoming expiry and zero or negative availability.
FEFO succeeds when receiving accuracy, physical rotation, and stock reports agree. A spreadsheet can help flag risks, but it cannot replace inspection and product-handling procedures.