Supply chain glossary
FEFO and FIFO
Which unit leaves the warehouse first – and why the expiry write‑off is decided by the order, not by picking.
28. september 2026
3 min
FEFO (first expired, first out) and FIFO (first in, first out) are stock rotation rules that decide which unit of an item leaves a storage location first: FEFO picks the unit with the earliest expiry date, FIFO the unit that was received earliest. For goods with a limited shelf life FEFO prevents expiry write‑offs; FIFO is enough where stock age matters but no expiry date is tracked.
The two rules give the same result only when batches arrive in the order of their expiry. They diverge when one item comes from several suppliers or production lines with different remaining shelf life, when returns go back into stock, or when an older batch arrives after a fresher one. FEFO therefore needs batch and expiry date recorded at the level of the storage location, which is the job of a warehouse management system; an ERP that holds stock only at warehouse level cannot reliably enforce either rule.
FEFO and FIFO in practice
A picking rule cannot save stock that was ordered beyond its shelf life. If an item arrives with 10 days of remaining shelf life, sells 20 units a day and the supplier ships in lots of 300, one delivery covers 15 days, and with steady demand at least 100 units expire whatever the warehouse picks first. The write‑off is decided when the order quantity is set against the remaining shelf life, not at the pick face, so expiry belongs among the replenishment parameters next to the minimum order quantity and lead time.
Strict FEFO also has a limit towards the customer. Where retail chains or pharmacies accept deliveries only with a minimum remaining shelf life, a warehouse that always ships the shortest‑dated batch produces rejected deliveries. FEFO is then combined with a minimum remaining shelf life per customer or channel, and stock below the threshold goes to a channel that still accepts it or to a markdown. In the store, rotation depends on shelf filling: if new goods are placed in front of old ones, FEFO in the distribution center is lost on the last meter. In pharmaceutical distribution the EU Good Distribution Practice (GDP) guidelines require stock to be rotated by FEFO and exceptions to be documented.
Veritico STOCK manages stock with regard to shelf life to reduce write‑offs and discounted clearance sales, and proposes stock transfers of surplus and near‑expiry stock between locations. Which batch physically leaves the bin remains the task of the WMS. See expiry management, stock transfers and overstock, automated and efficient warehousing and the Dr. Max case study.
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