Expiration tracking involves tracking and controlling the shelf life of perishable products such as food, medicine, or cosmetics. This is important because most of these products have a usable lifespan. For example, fresh milk can have a shelf life three weeks, while products like toilet paper can have a useful life of several years. If items are simply stacked in a warehouse without proper expiration tracking, staff must manually check expiration dates each time an order is fulfilled. This increases the risk of accidentally shipping expired products to customers and makes it harder to identify items that have already expired but continue to occupy storage space.
With expiration tracking, items are assigned a "timer", systems record the expiration dates of the products and issue alerts for items approaching their expiration dates. This ensures that timely action can be taken before products reach the end of their shelf-life.
Accurate inventory control requires more than simply monitoring expiration dates— It often involves setting a standard practice for packing orders. Which items should be shipped first?
First In, First Out
FIFO (First-In, First-Out) means that items received first— those purchased or product earliest— are shipped out first. For industries with basic expiration management needs, FIFO is a simple and effective approach. If product costs increase over time, FIFO is also beneficial for financial reporting, as it ensures that lower-cost inventory is sold out first, resulting in higher reported margins.
First Expired, First Out
For products with very short shelf lives, FEFO (First Expired, First Out) may be a more suitable option. For example, let's say we have two batches of milk. The first batch of milk will expire in 15 days, while the second batch was transferred in from another sales channel and will expire in 10 days. Under FIFO rules, the system would suggest shipping the first batch, even though the second batch is closer to its expiration date.
With FEFO, the system prioritizes items based on expiration date rather than arrival time, ensuring that the batch expiring soonest is shipped first. While FEFO may sound more advanced, it can be less intuitive during packing and requires accurate, real-time expiration data. Any errors in expiration records can lead to confusion and operational issues.
In inventory management, it is not always enough to solely rely on the printed expiry date, In many cases, businesses must also consider the Minimum Remaining Shelf Life (MRSL) required by buyers. What's the difference?
Typically, a product is considered within its acceptable shelf-life window if at least half or two-thirds of its total shelf life still remains. For example, if a carton of fresh milk has a 14-day shelf life, it may still be considered acceptable until day 4 after production. Once it reaches day 5, retailers may no longer be willing to purchase it, even though it has not technically expired.
Products that fall outside the MRSL window are often treated as near-expiry items and sold at discounted prices. This is why some near-expiry products may still appear to have a long time before expiration; that's because their original shelf life is relatively long and they remain safe to use even after passing the MRSL.
