An inventory management system is essential if you want to manage your stock efficiently. Such a system also makes it easier to process sales orders. However, many companies struggle with inventory management when dealing with products that have an expiry or best-before date. These products require a special approach since you don’t want to ship items past their expiration date. In this blog, we will cover some important aspects.
What Is an Expiry Date?
An expiry date or best-before date is a legally required label on food products that informs consumers about the final date the product can be consumed or how long it can be stored.
It is widely known that many food products come with an expiry date. These items cannot be stored indefinitely. On the packaging, you will always find a lot number. Additionally, other abbreviations may appear on the packaging of products with a best-before date. Below are the most common abbreviations:
- Use By Date (UBD): This is typically found on highly perishable products such as meat or fish. Consuming products after this date can pose health risks. Therefore, it is crucial that these products leave your warehouse well before the expiration date.
- Best Before Date (BBD): Many people throw away products after their best-before date, but this is often unnecessary! The best-before date indicates the period during which the manufacturer guarantees the product’s optimal quality. After this date, the product may change in appearance or taste, but it can still be safely consumed.
- Production Date: Some products also indicate a production date, sometimes accompanied by a code that refers to a specific stage in the production process.
⚠️ Note: The date on the packaging applies as long as the packaging remains sealed. Once opened, the shelf life decreases rapidly. Some manufacturers include additional details on how long the product remains usable after opening. Furthermore, manufacturers of fresh daily products are not required to indicate an expiry date, as these products are meant to be consumed within 24 hours of preparation.
The Batch or Lot Number
Most food products are produced in batches, as production machines cannot create an unlimited quantity at once. By printing a batch or lot number on the packaging, businesses can precisely track which production batch a product belongs to. If an issue arises with one of your products, the lot number allows you to quickly identify the affected batch.
Which Inventory Management Method Should You Choose?
There are various inventory management methods. You are free to choose whichever method suits your business best. However, for products with an expiry date, we recommend using either the Just-In-Time (JIT) or First-In, First-Out (FIFO) principle.
- Just-In-Time (JIT): This method is used when there is an optimal coordination between supplier and customer. Goods are shipped to the customer immediately upon delivery, minimizing stock levels and reducing storage costs. This system is particularly effective for perishable products since there is no unnecessary storage time.
- First-In, First-Out (FIFO): In this system, the oldest stock is used first. This is the most commonly used inventory management system for products with an expiry date. In this specific case, it is sometimes referred to as First Expired, First Out (FEFO), which prioritizes the products with the closest expiry date.
Expiry Date and Inventory Management Systems
Managing products with an expiry date is a complex task. You must constantly monitor several parameters to ensure that only non-expired products are shipped. Additionally, it is crucial to dispatch the oldest products first. Otherwise, you risk forgetting about them, allowing their expiry date to pass, rendering them unsellable. This type of revenue loss must be avoided. How can you keep track of everything? The solution is simple: a smart Warehouse Management System (WMS).
Such a system allows you to add key parameters like expiry dates, lot numbers, and inventory management methods to your products. Based on the selected inventory management method, the system will automatically recommend the best product to pick for sales orders. In short, it saves you an enormous amount of time. Manually checking these parameters for each order is time-consuming, whereas a smart inventory management system automates the process.
Webship Online: The Ideal Solution
Do you work with expiry dates? Then Webship Online is the WMS you need. Webship Online automates the entire inventory management process for products with expiry dates. When receiving incoming stock, you can enter the expiry date and lot number. Webship Online takes care of the rest, ensuring that you never ship expired products.
Once a product’s expiry date has passed, it can no longer be sold. To prevent unpleasant surprises, Webship Online offers an “Expiring Products” report, which provides an overview of products approaching their expiry date. You can select a time frame of 3, 7, 14, or 30 days, or enter a custom period (e.g., 180 days). This report includes:
- Product name
- Storage location
- Quantity expiring
- Reserved stock
- Expiry date
If you notice that certain products are about to expire, you can launch a special promotion (e.g., a discount campaign) to liquidate the stock before it becomes unsellable.
Does this system sound like the perfect solution? Contact Webship Online at hallo@webship.online and request your free trial! Want to learn more about Webship Online’s inventory management system? Request a live demo today.