Inventory Stock Management System on Food: Guide to FIFO and FEFO

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When will your products sell out? Is there a best time for restocking? Questions like these about inventory are hard to answer if you solely rely on restocking the same amount when you run out. This will be inefficient and may not cater to the dynamic nature of demand, especially during peak seasons.

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The top priority is to ensure that products remain fresh, safe, and ready for consumption. An inventory stock management system is the answer for that, especially if you’re a business within the food industry. In fact, the US Department of Agriculture (USDA) expects that in 2024, food industry sales in the Philippines will go up by 10%. According to their recent report, sales are predicted to reach $14.045 billion this year, which is more than the $12.768 billion estimated for 2023 which then motivates these businesses to improve and stay in the competition by starting with inventories.

Among the numerous methods utilized are FIFO and FEFO or the First-In, First-Out (FIFO) and First-Expired, First-Out (FEFO) when it comes to managing perishable inventory. This article delves into these methods, providing insights into their benefits, importance, and other methods to achieve efficient inventory management.

The Difference Between FIFO and FEFO

First-In, First-Out

FIFO is one of the widely adopted inventory management strategies, especially pertinent in the food industry. It is predicated on the principle that the first items stocked are the first ones sold or used. This helps avoid having outdated items, keeps track of store stocks more accurately, makes sure products are of good quality, follows accounting rules, and makes keeping records easier.

First-Expired, First-Out

FEFO, on the other hand, takes FIFO a step further by prioritizing the dispatch of goods based on their expiration dates, not just on their arrival times. This approach is particularly beneficial for items with varying shelf lives, ensuring that no product goes to waste due to expiration.

Inventory Stock Management System Benefits

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How is FIFO and FEFO Important in the Food Industry?

Implementing FIFO and FEFO can significantly impact the food industry by:

Ensuring Product Freshness

These methods ensure that the oldest products are sold or used first, maintaining product quality and customer satisfaction.

Minimizing Waste

By efficiently managing perishables, companies can significantly reduce the amount of food waste, translating to cost savings and environmental benefits.

Optimizing Storage Space

Effective stock rotation through FIFO and FEFO maximizes storage utilization and prevents overstocking.

Other Methods

Regular Auditing

Conduct regular audits of your warehouse and inventory. There are several methods, including physical inventory checks, spot checking, and cycle counting. Regular audits help ensure that the inventory data in your management system matches the actual stock on hand, allowing for more accurate forecasting and decision-making.

Partner with a Reliable Delivery Service Provider

Collaborating with a dependable delivery service, such as Transportify, can greatly enhance your inventory stock management system. A reliable delivery partner can provide flexible and efficient transportation solutions, enabling faster restocking and reducing the need to hold excessive inventory. This partnership can also improve order fulfillment times, enhancing customer satisfaction by ensuring products are delivered promptly. Transportify offers a variety of vehicles that are flexible enough to attend different logistics needs of your business.

Vehicle TypeDimensions/
Weight Limits
Base Price
(Metro Manila)
Base Price
(Outside Metro Manila)
Base Price
(Visayas/Mindanao)
wing-van-iconWing Van 32 to 40 x 7.8 x 7.8 ft
12000kg to 28000kg
7000 PHP6500 PHP6500 PHP
6w-fwd-truck-icon6w Fwd Truck18 x 6 x 7 ft
7000kg
4850 PHP4850 PHP4850 PHP
closed-van-iconClosed Van10 to 14 x 6 x 6 ft
2000kg to 4000kg
1600 PHP1450 PHP1450 PHP
open-truck-iconOpen Truck10 to 21 x 6 ft x open
2000kg and 7000kg
2300 PHP1950 PHP1950 PHP
l300-van-iconL300/Van8 x 4.5 x 4.5 ft
1000kg
415 PHP330 PHP310 PHP
small-pickup-iconSmall Pickup5 x 5 ft x open
1000kg
310 PHP250 PHP220 PHP
light-van-iconLight Van5.5 x 3.8 x 3.8 ft
600kg
250 PHP192 PHP225 PHP
mpv-iconMPV/SUV5 x 3.2 x 2.8 ft
200kg
160 PHP130 PHP140 PHP
sedan-iconSedan3.5 x 2 x 2.5 ft
200kg
140 PHP110 PHP120 PHP

Implement Dropshipping

For certain items, consider dropshipping, which allows you to fulfill orders directly from a supplier to the customer. This method can reduce the need to hold large amounts of inventory and can be especially useful for ‘C’ category items or products that are bulky and difficult to store.

Food businesses to work at their best, having a great inventory stock management system is crucial. This system is most effective when it uses FIFO and FEFO methods, which help keep food fresh and reduce waste. Adding regular checks, partnering with dependable delivery services like Transportify, and trying out dropshipping can also improve your business. These approaches help you adjust to changing demands, especially during busy times, making sure you meet customer needs. Keeping up with these strategies ensures your business stays successful, eco-friendly, and keeps customers happy. In short, a robust inventory system with FIFO and FEFO is vital for doing well in the food industry here in the Philippines.

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