Stock Rotation in a Medicine Warehouse

FEFO, not FIFO

First In, First Out assumes the oldest delivery expires first. With medicines that assumption breaks regularly. A batch received in March might expire in eighteen months; one received in June might expire in four, because it was already well into its shelf life when it reached you.

First Expiry, First Out sorts by the date that actually matters. It is a small change in rule and a large change in outcome, and it is the single most effective thing most warehouses can do about expiry waste.

It starts at goods-in

You cannot rotate on data you never captured. Expiry and batch have to be recorded as stock is received, into the system, not onto a carton in marker pen.

Check incoming shelf life as well. Stock arriving with only a few months left is a problem you have just bought, and it is far easier to challenge on the day it lands than six months later. Many operators set a minimum acceptable remaining shelf life and reject anything below it.

Make the right pick the easy pick

If the correct carton is behind three others, people will take the front one. That is not carelessness, it is physics and time pressure.

So put the earliest expiry where the hand naturally goes. Have the system tell the picker which batch to take rather than leaving it to judgement. And where the same product sits in more than one location, direct the pick rather than letting the picker choose the convenient shelf.

Review before it becomes a write-off

Run a report every month of everything expiring within six months. Six months is early enough to still have options.

For each line: can it be pushed to a customer who will use it quickly, discounted, returned to the supplier under agreement, or transferred somewhere with faster turnover? Something can usually be done at six months. At six weeks the only remaining decision is how to dispose of it.

The report matters most for slow-moving lines. Fast movers rotate themselves; the long tail is where the money quietly goes.

Measure it, or it drifts

Track expired stock as a percentage of stock value each month, and look at the trend rather than any single month.

A number that is climbing usually points at one of three things: buying too much of slow lines, picking that ignores expiry, or short-dated stock being accepted at goods-in. Each has a different fix, and the monthly figure tells you which conversation to have.

Why FEFO breaks in practice

Almost every operation says it runs FEFO. Rather fewer do so reliably, and the failures are consistent:

• The same product in several locations. A picker takes the nearest, and the nearest is not the oldest.
• Split batches. One batch spread across three pallets in two aisles turns rotation into a memory exercise.
• Manual overrides at busy moments, which are rarely recorded and therefore never reviewed.
• Expiry dates captured at the wrong level — per delivery rather than per batch — so the system cannot distinguish what it is holding.
• Replenishment that ignores expiry, refilling the pick face from whichever pallet is easiest to reach.
• Returns re-shelved into the pick face ahead of older stock.

None of these are procedural failures exactly. They are the natural consequence of a layout that makes the wrong pick easier than the right one.

Short-dated stock and what to do with it

Stock does not become a problem on its expiry date. It becomes a problem at the point where nobody will accept it any more, and that point arrives well before.

Customers frequently apply their own minimum shelf life on receipt, so a product with a few months remaining may already be unsellable through normal channels even though it is entirely within date. The practical consequence is that your review horizon has to sit ahead of the market’s tolerance, not ahead of the expiry date.

Once identified, the options narrow quickly: prioritise it for allocation while it still has commercial life, agree a return with the supplier where the contract permits, or accept the write-off and destroy it under a documented process. What matters is deciding early enough that the first option is still available.

The one thing that must not happen is short-dated stock quietly remaining in the pick face in the hope somebody takes it.

Slow movers and the write-off trap

Expiry loss concentrates in slow-moving lines, and slow movers are precisely the lines nobody looks at. A fast product rotates itself; a line that turns twice a year will sit until it is too late unless something forces attention onto it.

Two habits prevent most of it. First, review by remaining shelf life against rate of sale, not by expiry date alone — six months is comfortable for a line that moves weekly and hopeless for one that moves twice a year. Second, look at what you are ordering as well as what you are holding, because most expiry write-offs are created at the purchasing decision rather than in the warehouse.

Warehouses get blamed for expiry loss. Buying patterns usually cause it.