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A WMS (Warehouse Management System) enables the digital management of product, stock, location, lot, and movement information within a warehouse. FIFO and FEFO tracking are particularly important warehouse management methods for determining the order in which stocks will be used or shipped.
FIFO (First In, First Out) means that the product that arrives first in the warehouse leaves first. FEFO (First Expired, First Out) is based on the principle that the product with the nearest expiration date is used or shipped first. WMS supports the systematic application of these rules by using information such as product arrival date, lot number, production date, and expiration date.
How to set up the basic structure of FIFO and FEFO tracking with WMS?
1. Product arrival dates are recorded in the system.
To implement FIFO tracking, it is necessary to know the date the product entered the warehouse. When a goods receipt transaction is performed on WMS, the product's entry date can be recorded automatically or in a controlled manner.
Stocks of the same product arriving on different dates are tracked with separate movement records. This allows the system to determine which stock group entered the warehouse first and prioritize these records during picking.
2. Lot and Batch Information is Associated with Products
In FIFO and especially FEFO management, lot or batch-based tracking is important. Different lots of the same product code may have different production and expiration dates.
WMS can store information such as lot number, receipt date, production date, and expiration date under the same stock record. This allows products to be managed not only by total quantity but also by lot.
3. Expiration dates are recorded upon receipt of goods.
For the FEFO method to function correctly, the expiration dates of the products must be entered into the system accurately. This information can be read from the barcode during goods receipt or entered into the system by the user.
When the expiration date is associated with a product or lot record, WMS can calculate which stock will run out first and direct picking operations accordingly.
4. FIFO and FEFO Rules are Defined on a Product Basis
It may not be necessary to use the same stock release rule for every product. While FIFO may suffice for products without a shelf life, FEFO may be more suitable for food, pharmaceutical, cosmetic, or chemical products.
Stock withdrawal strategies can be defined on WMS based on product group or product card. This allows the system to offer stock recommendations during the picking process, according to the rules applicable to that product.
5. Locations are managed to support stock queuing.
FIFO and FEFO are not merely systemic sequencing; the physical warehouse layout must also support these rules. Leaving older stock in hard-to-reach locations can lead operators to shift to newer stock.
WMS can offer suitable location suggestions during product placement and direct picking tasks to the correct stock group. This ensures that physical warehouse movements are aligned with the stock sequence defined in the system.
How are FIFO and FEFO principles applied in daily warehouse operations?
6. The correct lot size is recommended during order picking.
When a customer order or production request is placed, WMS can determine which lot or stock group will be used first according to the stock release rule.
If FIFO is applied, the stock with the oldest receipt date is prioritized; if FEFO is applied, the stock with the nearest expiration date is prioritized. The system can show the operator which lot to pick from which location.
7. Correct Stock Selection is Checked Using Barcodes
When the operator scans the product or lot barcode, WMS can check whether the selected stock matches the stock suggested by the system.
The user can receive a warning if an incorrect or newer lot is selected. This structure allows for a more controlled application of FIFO and FEFO rules, without relying on personal preference.
8. Stocks with Approaching Expiration Dates are Monitored
In FEFO management, not only the picking order but also upcoming expiration dates should be tracked. WMS can report stocks with expiration dates approaching within a specific period.
This information allows warehouse managers to identify risky stocks in advance, prioritize shipments, or initiate necessary quality assessments.
9. Blocked or Unavailable Stock is Excluded from the Ranking.
In terms of FIFO or FEFO, the oldest stock may not always be available. The product may be awaiting quality control, blocked, or in quarantine.
WMS can only include usable products in the picking queue, taking stock status into account. This prevents the shipment of stock that is not suitable in terms of quality simply because it is older.
10. FIFO and FEFO Performance is Reported
WMS allows you to report which lots were used on which dates, how many stocks are nearing their expiration date, and the extent to which stock release rules were followed.
These reports help analyze losses due to inventory aging, spoilage, destruction, and expiration dates. They also allow for the evaluation of whether warehouse operations are complying with established inventory policies.
What is FIFO?
FIFO stands for "First In, First Out." It is based on the principle that products that arrive at the warehouse first are used or shipped before stocks that arrive later.
What is FEFO?
FEFO stands for "First Expired, First Out," meaning "The product with the earliest shelf life is removed first." It is particularly used in the management of products with a limited shelf life.
What is the difference between FIFO and FEFO?
While FIFO is based on the product's date of entry into the warehouse, FEFO considers the product's expiration date. Even if a product entered the warehouse later, it can be used earlier under the FEFO method if its expiration date is closer.
Which products should use FEFO?
FEFO (Feed-From-Open) method is frequently preferred in food, pharmaceuticals, cosmetics, chemicals, and other products with a limited shelf life. The aim is to prevent stocks nearing their expiration date from remaining in the warehouse and exceeding their shelf life.
Can WMS automatically apply FIFO and FEFO rules?
Depending on the system configuration, WMS can automatically suggest the appropriate lot and location. If the operator selects a different stock item, a warning or additional confirmation mechanism may be applied.
Is lot tracking mandatory for FIFO and FEFO?
FIFO can be applied solely based on the date of entry. However, lot tracking provides a significant advantage in structures where different batches of the same product need to be separated. For FEFO, accurate tracking of the expiration date information is required at the lot or stock level.
Can expired products be managed with WMS?
Yes. Stocks that have passed their expiration date or reached a specified threshold can be blocked or redirected to separate locations. This prevents these products from being accidentally used in picking or shipping operations.
Which systems can WMS integrate with?
WMS can integrate with systems such as ERP, QMS, EBR, and LIMS. Order and stock information can be retrieved via ERP, quality status can be shared via QMS or LIMS, and raw material lots to be sent to production for EBR can be selected according to FEFO or FIFO rules.
What are the benefits of FIFO and FEFO tracking for a business?
FIFO and FEFO tracking helps reduce inventory aging, decrease product losses due to expiration dates, improve inventory turnover rate, and strengthen lot-based traceability. It also establishes a standard method for operators to determine which inventory to use first.
Conclusion
WMS enables FIFO and FEFO tracking by managing data such as product entry date, lot information, and expiration date within the system, and directing stock withdrawals according to these rules. This eliminates the need for manual decisions on which product to use first in warehouse operations.
Especially in businesses where shelf life or lot-based traceability is important, FIFO and FEFO management is a crucial WMS function for reducing inventory losses and strengthening warehouse discipline. When used in conjunction with barcode, location, and quality status controls, inventory exit processes become more controlled and traceable.
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