FEFO Inventory Management for Medicine Distributors

FEFO versus FIFO

FIFO (first in, first out) ships the oldest receipt first by arrival time. FEFO (first expiry, first out) ships the lot that expires soonest — even if a newer receipt arrived yesterday with an earlier expiry. For medicines, expiry risk usually beats “which carton landed first.”

How automatic batch selection works

In a FEFO system, when you add a product to a sale the software looks for batches that are saleable (available quantity, not expired) and sorts them by expiry ascending. It proposes the top batch. Staff can override when needed; good systems record that override for audit.

Why earliest-expiry stock should move first

Pharmacies and clinics reject short-dated stock. If you keep selling long-dated lots while short-dated ones sit, you convert working capital into write-offs. FEFO is not bureaucracy — it is cash protection.

How expired batches are prevented from sale

Saleable FEFO pools exclude batches whose expiry has already passed (and typically those not marked available). That stops “we still have 40 units” from quietly including dead stock. Pair this with batch and expiry tracking at purchase time.

A realistic example

You hold Panadol batch A (expires in 40 days, 80 units) and batch B (expires in 8 months, 200 units). A pharmacy orders 50 units. FEFO allocates from batch A first. Without FEFO, staff might open the fresher carton because it is closer to the counter — and batch A becomes a write-off three weeks later.

Related reading: reducing medicine expiry losses.