FEFO/FIFO is a technique for managing loads that aims to supply products (to make them flow through the supply chain) by selecting those closest to expiration first (First Expired, First Out), and when the expiration is the same, the oldest first (First In, First Out).
- The main concept behind FEFO / FIFO is the batch.
- The “E” in FEFO gives us a date linked to a product’s life cycle that tells us when it will no longer be usable.
- The “I” in FIFO refers to the date on which a product’s logistical distribution cycle began with its receipt and stocking.
Importance of FEFO / FIFO
-It is a requirement demanded by the market.
-It is a quality target.
-In some industries it is legally regulated.
The cost of making FEFO / FIFO mistakes
-Cost of stock expiring on the shelf.
-Cost of a product with visible signs of deterioration.
-Cost of items returned by clients.
-Cost of time lost looking for a product in the warehouse.
Opportunity cost of the unsatisfied demand.
-Cost of the damage to the brand’s image, potentially even leading to legal claims when the product’s properties are altered, thus affecting the consumer.
Common requisites of FEFO / FIFO
1. Identification: product and layout elements.
2. Information systems: ERP (Enterprise Resource Planning) / WMS (Warehouse Management Software).
3. Resources: warehouse systems, layout, transport and personnel.
4. Organization: procedures, task synchronization and work stations.
Identification to optimize FEFO/FIFO
- Any element subject to a logistics task is labeled: aisles, areas docks, doors, locations etc.
- Labeling and identifying products, or batches, is more involved. At which task within the logistics cycle to intervene in (reception, storage, picking, packaging, dispatch, etc.) must be determined and also the degree of information, depending on the sophistication of the ERP/WMS.
- Aside from label design and printing, it must be ensured that labels are easily readable by the scanner under the operator’s ordinary working conditions.
Information System ERP/SAP will be considered to ensure:
-Expiry date.
-Batch creation date (when entered into the system).
-entrance of the Warehouse
Read also: Pharmaceutical Warehouse Interview Questions and Answers
Resource Person: Hassan Hussein
