It may be a piece of news, but do you know that around one-third of food produced globally is lost or wasted every year, which is almost 1.3 billion tonnes? This huge figure is stated by the Food and Agriculture Organization (FAO) and highlights the pressing need for adopting efficient inventory management techniques in the food industry.
Implementing smart strategies like FEFO (First Expired, First Out) can help us reduce such waste, especially in our agricultural operations where product freshness is the top priority.
Peter Drucker says, “What Gets Measured, Gets Managed,” and this is so true for inventory management.
In this blog, we will discuss the concept of FEFO in the food industry, its importance in agriculture, practical applications, benefits, and the technologies that help us in its implementation.
What is FEFO (First Expired, First Out)?
FEFO is an inventory management technique that assigns priority to each item that is to be dispatched or used based on its expiration date.
The products that are near the end of shelf life are used first. Another famous method is the FIFO (First In, First Out) method that focuses on the dates when the inventory arrived, and utilizes the inventory that came in first.
But FEFO gives priority to product freshness and safety by considering expiration dates over its time of arrival. This method is very important in the food industry, where perishable goods require careful handling to prevent spoilage and warrants the safety of the consumer.
For example, if a warehouse stores dairy products, then the FEFO method would indicate that the milk cartons with the earliest expiration dates are distributed before those with later dates, despite of when they arrived at the facility. This method minimizes the risk of selling expired products and cuts waste that can occur due to spoilage.
Why FEFO Matters in Agriculture
Most of the agricultural products are highly perishable, and they usually have short shelf lives. Seasonal produce like berries, tomatoes, or leafy greens can spoil quickly if they are not managed correctly and timely manner.
If you do not follow a system like FEFO, which prioritizes food perishability, then there is a high risk of spoilage, leading to more food waste and possible regulatory issues.
By implementing FEFO in agriculture, you, as a farmer or producer, can guarantee that the freshest products reach consumers while maintaining quality and adhering to the safety standards.
FEFO also aligns with food safety regulations, such as those set by the FDA and HACCP, by making sure that products that are expired or are near-expiry are not sold or consumed. In Addition, by reducing waste, FEFO helps in sustainability efforts and leads to notable cost savings for agricultural businesses.
FEFO Use Cases in Agriculture and Agribusiness
FEFO can be applied across many aspects of agriculture. Let us take a few examples:
Cold Storage for Fruits and Vegetables:
Facilities that store perishable produce use FEFO to manage their inventory. This way, they make sure that the items with the earliest expiration dates are always dispatched first to the market. This reduces spoilage and waste.
Packhouse Operations and Warehouse Management:
In packhouses, FEFO helps in organizing produce according to its shelf life. Hence, making the packaging and distribution processes highly efficient.
Dairy and Milk Processing Units:
Dairy products are highly perishable. Implementing FEFO will help in making sure that milk and other dairy products are processed and distributed in a manner that prioritizes their freshness. And they are distributed long before getting spoiled.
Poultry, Meat, and Egg Handling:
These products must comply strictly with the regulations regarding their expiration dates. FEFO helps in managing their inventory to prevent health hazards that can occur due to spoilage.
Food Packaging & Export-Grade Commodity Logistics:
Maintaining product quality is non-negotiable when it comes to export. FEFO guarantees that only products within their defined shelf life are shipped abroad. This protects the reputation of the brand and also helps in compliance with international standards.
Benefits of Implementing FEFO in Agricultural Supply Chains
You can enjoy many benefits by adopting FEFO in your agricultural operations. Let us have a look at a few:
Minimizes Food Wastage:
By giving priority to the products that are near their expiry and using them first, FEFO helps you reduce the number of goods wasted due to spoilage.
Ensures Better Customer Satisfaction with Fresher Goods:
Customer satisfaction is paramount when it comes to food and its freshness. By delivering the freshest products, you can enhance customer trust and satisfaction, leading to repeat business and a positive brand image.
Maintains Product Traceability:
FEFO systems often integrate with tracking technologies. This lets you monitor the product movement and shelf life precisely.
Increases Operational Efficiency in Warehouses and Dispatch:
You can easily streamline picking and dispatch processes by organizing your inventory according to its expiration date. This saves time and resources.
Enhances Regulatory and Audit Compliance:
FEFO advocates food safety regulations and facilitates compliance during audits and inspections.
How FEFO Works: Step-by-Step Agricultural Example
Now, consider this example where a warehouse is receiving a batch of tomatoes:
1. Receiving a Batch of Tomatoes:
When it arrives, each batch is inspected for quality and assigned an expiration date according to its expected shelf life.
2. Each Batch is Tagged with an Expiration Date:
After this, labels or digital tags that indicate its expiration date are put on each batch for easy identification.
3. System Automatically Prioritizes Dispatch Based on Earliest Expiry:
Inventory management systems sort batches and place the ones with the nearest expiration dates at the front for dispatch.
4. Packed Orders Assembled Accordingly:
When orders are being fulfilled, the system guides the staff to select batches in the FEFO order, hence making sure that older stock is sold first.
This process reduces waste and warrants that customers receive the freshest products.
Tools & Technologies for FEFO Execution in Agriculture
To implement FEFO effectively, you must integrate various technologies. Such as the following:
Modern Farm Management and ERP Systems like AgriERP:
Powerful farm management platforms provide a complete set of tools that help you in tracking inventory, managing expiration dates, and automating FEFO processes.
Barcodes and RFID Tags:
RFID and Barcodes are modern technologies that enable you to track your product in real-time. Hence, allowing for efficient sorting and dispatch based on expiration dates.
Warehouse Management Systems (WMS) Integration:
Warehouse Management Systems can be configured to support FEFO. This way, you can maximize your storage and picking sequence.
Real-Time Alerts for Nearing Expiry Items:
Real-time alerts can be a lifesaver for you when managing fresh produce. You can set your system to notify staff when products are nearing their expiration dates. Thus, triggering timely action.
Mobile Apps for Inventory Validation in the Field:
Modern mobile solutions enable on-the-go inventory checks. You can adhere to the FEFO method even outside traditional warehouse settings.
By benefiting from these technologies, agricultural businesses can boost efficiency, minimize waste, and maintain high standards of food safety.
Conclusion
Implementing the FEFO method, especially if you belong to the food industry and handle agricultural operations, is a must for reducing waste and ensuring that your products reach the customers in the freshest state.
It is also highly helpful for maintaining compliance with safety standards. By understanding and implementing FEFO principles, you can boost your business’s operational efficiency and customer satisfaction.
So, if you are looking for smart methods to streamline your inventory management, then solid solutions like AgriERP offer comprehensive tools to support the implementation of FEFO.
By integrating such technologies, your agricultural businesses can boost their bottom line and also contribute to a more sustainable and efficient food supply chain.
Always remember that effective inventory management is not about keeping track of products; in fact, it is about delivering the best quality products and striving for the safety of your customers! So, do not wait anymore and join hands with AgriERP to boost your inventory management!
