Inventory with expiry dates is an essential part of operations for most warehouses. Managing such products is a complex task that requires a precise tracking system and a well-planned sales strategy. A lack of proper oversight can lead to serious issues — expired goods will need to be written off. Even worse, they could reach the customer. For a business, this means wasted time, financial losses, and damage to its reputation.
How can you establish a process that ensures products leave the warehouse on time, generating profit instead of losses? In this article, we’ll explain how to effectively manage expiry dates and optimize the handling of perishable goods.
What is an Expiry Date?
The expiry date is the period during which a product retains its consumer properties and remains safe for use. This is a key parameter for companies dealing with food products, pharmaceuticals, cosmetics, or other goods that require storage time control. It is important for both consumers and businesses, as it directly impacts product quality, customer satisfaction, and regulatory compliance.
It is important to note that shelf life does not always indicate the exact date after which a product becomes unsafe. Often, it is an approximate estimate of the period during which the product maintains optimal quality. After the shelf life expires, the product may gradually lose its properties but does not necessarily become unusable immediately.
Expiry date is directly linked to the storage conditions of a product. Dairy products or meat, for instance, require specific temperature settings to remain fresh until the indicated shelf life. Failure to adhere to storage conditions can result in premature spoilage even before the stated expiration date. Therefore, when discussing expiry date management, it is crucial not only to monitor these dates but also to ensure compliance with all storage requirements.
Why is it important for businesses to monitor expiry date compliance?
Expiry date management is a key process for businesses dealing with perishable goods. Neglecting this aspect can lead to a range of serious consequences.
Expired products or medications can pose serious health risks to customers. This, in turn, may lead to legal consequences and a loss of trust in your brand. Therefore, the first and perhaps most obvious argument for effective tracking of expiration dates is ensuring consumer safety.
Unsold or expired goods result in direct losses for the company. Proper inventory management allows you to identify expired products in a timely manner and remove them from circulation. This reduces the likelihood of write-offs and the associated financial losses.
Another important aspect is compliance with the law. Most countries have strict regulations governing the sale of products with limited shelf life. Failure to adhere to these rules can result in fines and other penalties.
Customers expect the products they purchase to be fresh and of high quality. Selling items nearing or past their expiration date undermines trust in the brand and can lead to a loss of customer loyalty.
Organized expiry date management enhances the overall efficiency of a company’s operations. Optimizing storage and product distribution processes helps reduce order processing times, improve customer service quality, and boost market competitiveness. In a highly competitive environment, the ability to respond quickly to changes in demand and offer fresh products becomes a key factor for success.
How to Manage Expiry Dates?
For a business, shelf life is a guide that helps plan logistics, control inventory, and minimize write-offs. Depending on the scale of your inventory and available resources, you can choose one of the following tracking methods:
Manual method
The simplest and most accessible method. Inventory with expiry dates is tracked using paper records. Dates of product arrival, expiration dates, and sales information are recorded in logs or cards. This option may be suitable for businesses with a small range of products, but when dealing with a large volume of goods, manually entering data becomes difficult and risky. Additionally, data can easily be lost in this format. Any mistake can lead to the use or sale of expired products.
Tracking in Excel spreadsheet
For a more organized approach, Excel spreadsheets can be used. They allow for easy organization and systematization of data. Additionally, this method offers the possibility to automate certain processes using formulas. Furthermore, spreadsheets are easy to edit and update, making this method more flexible and accurate. However, Excel is not far removed from paper records. It still relies on manual data entry, and a single error in the spreadsheet can be enough to cause disruptions or inaccuracies in the entire inventory system.
Using software
The most effective method is using specialized software to track expiration dates. Such programs offer numerous features, including automatic notifications of approaching expiration dates, integration with other inventory systems, and data analysis capabilities.
Automation significantly reduces the time required for expiry date management and minimizes the likelihood of errors. Despite the high cost and the need for staff training, this method is the most reliable and convenient for large enterprises.
Tips for Effective Expiry Date Management
Expiry date helps consumers avoid unpleasant consequences and maintain their health. If you provide them with expired products, it could result in serious fines and, even worse, criminal liability. Below, we’ve provided several tips to help you avoid the risks of product spoilage, optimize warehouse management processes, and increase overall business efficiency. This is particularly important when dealing with products that directly affect the health and safety of consumers.
1. Implement a rotation system
Inventory rotation is the foundation of effective expiry date management. Use the FIFO (First In, First Out) method for products with a long shelf life. This method ensures that the products that arrive first in the warehouse are the first to be sold or used. As a result, products with earlier arrival dates won’t stay in the warehouse too long and will not spoil. To implement this approach, you can organize the warehouse so that new arrivals are placed behind older batches, making it easier to prioritize the sale or use of older stock.
For perishable products, such as food or pharmaceuticals, the FEFO (First Expired, First Out) method is more suitable. By using this method, a company sells or uses the products with the earliest expiration dates first. This helps minimize the risks of spoilage and loss of products with expired shelf lives. FEFO requires careful tracking of each product’s expiration date and continuous monitoring of this data. Implementing a good Warehouse Management System (WMS) is necessary for this approach.
Regular rotation will help maintain the natural flow of goods and prevent them from expiring.
2. Organize proper storage
Storage conditions have just as much impact on the shelf life of products as their production date. Ensure that optimal parameters for temperature, humidity, and lighting are maintained in the warehouse. For food products and pharmaceuticals, use specialized refrigeration units. Divide warehouse zones by product types to avoid mistakes during storage and ensure each product is kept under the proper conditions.
3. Conduct regular inventory audits
Scheduled inventory checks help to promptly identify products approaching their expiration dates and prevent spoilage. Inventory audits also allow you to verify the accuracy of data in accounting systems. For large warehouses, it is recommended to conduct sample checks on a weekly basis, while for smaller ones, full audits should be performed monthly.
4. Optimize purchase volume
Excess inventory is a common cause of write-offs. Analyze sales data, seasonality, and demand patterns to order the optimal volume of products. For goods with a short shelf life, aim to minimize stock levels while maintaining enough inventory to meet current demand.
5. Work with reliable suppliers
Choose partners who guarantee stable product quality and provide sufficient shelf life upon delivery. Check the storage and transportation conditions provided by the suppliers. A reliable supplier not only reduces the risk of expired products but also ensures the quality of the products you offer to your customers.
6. Run promotions for products with expiring shelf life
Organizing discounts and promotions for products nearing their expiration date is an effective way to boost sales. You can offer discounts on individual items or create “bundle deals” with other products. This not only helps reduce excess inventory but also attracts new customers, increasing sales and customer loyalty.
7. Train employees
Staff working with inventory should know how to check expiration dates, store products correctly, and sell them in a timely manner. Regular training sessions will help minimize mistakes, such as overlooking products with approaching expiration dates. Train warehouse employees on FIFO/FEFO methods and the use of inventory management software to ensure smooth and efficient operations.
8. Keep records and analytics
Collect and analyze data on inventory movement, expiration dates, and the frequency of write-offs. Using reporting allows you to not only track the effectiveness of current processes but also find ways to improve them. For example, with analytics, you can identify slow-moving products and adjust purchase volumes or marketing strategies accordingly.
9. Track expiration dates with technology
Automation of inventory tracking is a step toward minimizing errors. Software like WMS Ysell.pro can track expiration dates, send notifications about approaching expirations, and automatically generate priority lists for products that need to be sold first. This is especially useful for large warehouses with a high volume of goods.
With the implementation of technology, your business will be able to focus on growth while confidently avoiding risks associated with expired goods. Investments in such solutions will pay off through increased accuracy, speed, and efficiency of all warehouse processes. By choosing automation, you are laying a solid foundation for the growth and stability of your business.
Frequently Asked Questions
1. How does the expiration date differ from the storage period?
The expiration date defines the period during which a product remains safe for consumption. After this period, the product may become harmful to health. The storage period refers to the time during which the product retains its quality. After this period, it may still be suitable for use.
2. How to properly organize the rotation of products with an approaching expiration date?
The best practice is to use FIFO (First In, First Out) or FEFO (First Expired, First Out) methods. These approaches prioritize the sale or use of products with the nearest expiration date, helping to minimize losses.
3. Is it necessary to manually update expiration date information in software systems?
Inventory management software allows for automatic tracking of expiration dates, which significantly reduces the need to manually update information. However, in some cases, it is important to correctly enter data when goods arrive at the warehouse for the system to work properly. If the packaging has a barcode containing expiration date information, it can be scanned with a barcode scanner.
4. How often should expiration dates be checked in the warehouse?
If you have an automated accounting system in place, it will notify employees about products whose expiration dates are approaching. However, it is important to conduct periodic checks to ensure the accuracy of the data in the system and the timeliness of the notifications, such as once a month or quarterly.
5. What should be done if a product’s expiration date has passed but the product has not been sold yet?
If a product with an expired expiration date has not been sold, it should be immediately removed from circulation and disposed of if it poses a health or safety risk. By automating expiration date tracking, you can prevent expired products from reaching customers.
