Lot Codes, Expiry Dates and FEFO: Fulfilling Products That Can Go Out of Date
For dated goods, FIFO is the wrong rule. How to capture lot and expiry at receiving, enforce a minimum remaining shelf life per channel, allocate under FEFO, and pass the one-hour recall test.
For most catalogues, a unit is a unit. Two identical cases on a rack are interchangeable, and it does not matter which one ships. For supplements, food, cosmetics, pet products, adhesives, batteries and a long list of others, that assumption is wrong — and building a fulfilment process on it is how brands end up with unsellable stock, rejected marketplace shipments, and a recall they cannot trace.
Products that carry a lot code or a date need inventory control at a finer grain than the SKU. Here is what that involves in practice.
FIFO is not FEFO
The two get used interchangeably and they are not the same rule.
FIFO — first in, first out — ships the oldest received stock first. It is a good default for anything that degrades slowly or goes out of fashion.
FEFO — first expired, first out — ships the stock with the earliest expiry date first. These diverge more often than you would expect: a shipment received in March may carry a shorter remaining life than one received in January, because manufacturing dates and receipt dates are unrelated.
If your product has a date printed on it, FEFO is the rule. Running FIFO on dated goods will quietly strand the short-dated pallet at the back of the rack.
Capture the date at receiving or not at all
Lot and date control is decided at the inbound dock. If the lot number and expiry are not captured when the pallet is broken down, no downstream process can reconstruct them — someone will be reading bottles with a torch six months later.
A workable inbound standard looks like this:
- Every receipt is booked against a purchase order and a lot identifier.
- The expiry or best-before date is keyed at the case level and inherited by every unit in that case.
- Mixed-lot pallets are split into separate license plates rather than received as one quantity.
- Short-dated receipts are flagged at the door, before putaway, while rejecting them is still an option.
None of this works on a spreadsheet at volume. It needs a warehouse management system that treats lot and date as first-class attributes of a location, not a note in a comment field. The rest of the inbound discipline that makes this stick is covered in our guide to receiving and putaway.
Minimum remaining shelf life is a contract term
The clause that catches brands out is not expiry itself — it is the buffer their channel demands before expiry.
| Channel | What they typically require |
|---|---|
| Marketplaces | A minimum remaining shelf life at the point the goods are received, commonly in the region of 90 days for consumables |
| Grocery and drug retail | A fixed percentage of total shelf life remaining at delivery, negotiated per account |
| Direct-to-consumer | No formal rule, but customer expectations are effectively similar |
Requirements change and vary by category, so treat the numbers above as a prompt to check your own agreements rather than as a spec. What matters operationally is that the buffer becomes a hard rule in the system: stock that falls below the threshold should stop being allocatable to that channel automatically, not when someone notices. Marketplace shipments in particular are rejected for exactly this class of error, which is why date rules belong in the same repeatable process as the rest of your marketplace prep.
Picking under FEFO
Once dates are in the system, allocation becomes the enforcement point. Three rules cover most operations:
- Allocate by earliest expiry, not by nearest location. The picker should be directed to the correct lot even when a closer one exists.
- Confirm the lot at the pick, not at the pack bench. A scan at the shelf catches the substitution; a check at packing catches it after the travel is already spent.
- Never mix lots in one pick face. If two lots must share a location, they need separate bins. A single commingled bin destroys traceability for both.
The one common exception is a customer with a contractual minimum shelf life that the earliest lot cannot satisfy. That is a real business rule, and it belongs in the system as one — not in a picker's memory.
The one-hour recall test
Here is a useful self-assessment. Pick a lot number from a receipt six months ago and ask two questions: which orders did units from that lot ship on, and what is still on hand from it?
If the answer takes more than an hour, you do not have lot control — you have lot records. The gap between the two only becomes visible during a recall, which is the worst possible moment to discover it.
What to ask a 3PL before signing
If you are outsourcing dated goods, four questions separate providers who genuinely handle this from providers who will handle it manually and hope:
- Does allocation run FEFO automatically, or does a person choose the lot?
- Can you enforce a per-channel minimum remaining shelf life?
- Can you produce a forward and backward lot trace on demand, and how long does it take?
- What happens to stock that crosses the threshold — is it quarantined automatically or does it stay sellable?
Providers who handle dated inventory well will answer these in a sentence each. Those are the same questions worth putting to any partner running your order fulfilment, whether or not your catalogue carries dates today.
Expiry control is one of the places where the system underneath the warehouse matters more than the building. AIDWMS enforces FEFO allocation and channel-level shelf-life thresholds as rules rather than reminders — a short look at how it handles lot-controlled inventory is a reasonable next step if dated stock is currently being tracked by hand.
