Stock rotation means using older stock before newer stock, so nothing sits at the back of the shelf until it expires. There are three methods: FIFO (first in, first out) uses what arrived first, FEFO (first expired, first out) uses what expires first, and LIFO (last in, first out) uses the newest, which is almost never right for food. For anything with a date, rotate by FEFO. The method is the easy part, though. What makes rotation work is a handful of shelf habits (new stock goes behind, everything carries a readable date, short-dated stock moves to one spot) written down, taught to everyone and checked once a week. Below are the methods, the habits, a procedure to print, and what it saves.
The short version
- FIFO: oldest arrival first. Fine for packaging and anything without a date.
- FEFO: soonest date first. The rule for anything perishable or dated.
- LIFO: newest first. Only for things that don't age; never for food.
- Put new stock behind or under old stock, never in front or on top.
- Date everything you can't read a date on, and date every opened container.
- Pull anything due in the next few days to a use-first spot, daily.
- Check it weekly, shelf by shelf. A procedure nobody checks fades within a month.
- TaroStack picks the soonest date first, every time, everywhere. More below.
The three methods
| Method | Uses first | Right for | Wrong for |
|---|---|---|---|
| FIFO, first in first out | What arrived first | Packaging, jars, labels, dry goods without dates | Anything where a newer delivery can carry an earlier date |
| FEFO, first expired first out | What expires first | Dairy, meat, produce, finished goods, anything dated | Nothing, as long as dates are recorded |
| LIFO, last in first out | What arrived last | Stock that doesn't age, where reaching the oldest isn't worth the effort | Food, cosmetics, anything with a date |
FIFO and FEFO agree until a delivery arrives with a shorter date than something already on the shelf, which in a food business happens most weeks. When they disagree, FEFO is right. The difference, with numbers, is in FIFO and FEFO in the food industry. And note that "FIFO" is also a costing method for your books; that one is about which price goes with which sale, and has nothing to do with which box you pick up.
The shelf habits that make rotation happen
| Habit | How it works | Good for |
|---|---|---|
| Back-loading | New stock goes behind the old, so the oldest is always in front | Any shelf you reach from one side |
| Bottom-loading | New cases go under the old ones in a stack | Cases on the floor or on pallets |
| Flow-through racks | Shelves slope forward; you load at the back and pick at the front | Busy coolers; they cost money but rotate themselves |
| Two bins | Use one container; when it's empty, refill it and put it behind the full one | Small parts, packaging, bulk ingredients |
| Day dots | A colored dot for the day it was opened or made | Prep, opened tubs, the line |
| A use-first spot | One shelf per area for anything due in the next few days | Every cooler and dry store |
Back-loading is the one that matters most and gets skipped most, because putting a delivery in front is faster. It's why the procedure below names who puts stock away. Ideas for the date and status labels that go with these habits are in inventory labeling ideas.
A stock rotation procedure to pin up
| Step | What to do | Who |
|---|---|---|
| 1 | At delivery, check every date. Set aside anything shorter-dated than you accept. | Receiver |
| 2 | Label anything without a clear date with the date received and its use-by, in large print. | Receiver |
| 3 | Put new stock behind or under what's already there. Never on top, never in front. | Receiver |
| 4 | Take from the front, and from the soonest date when two dates are on the shelf. | Everyone |
| 5 | Write the date opened and the new use-by on every opened container. | Whoever opens it |
| 6 | Daily: look along each shelf for anything due in the next 3 days and move it to the use-first spot. | Shift lead |
| 7 | Anything past its date comes off the shelf at once, is written off with a reason, and never goes back. | Shift lead |
| 8 | Weekly: check the procedure was followed, shelf by shelf, on the check sheet. | Owner or manager |
Download the stock rotation procedure and weekly check sheet. It has these eight steps with who does each and how you know it's done, to print and pin where stock is put away, and a weekly check with one line per storage area where any "N" turns red. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
What rotation saves
Windward Roots, the made-up taro business I use in these examples, looked at one month of write-offs before it wrote its rotation down:
| Written off in September | Quantity | Cost |
|---|---|---|
| Coconut cream, found behind newer cartons | 6 cartons at $4.80 | $28.80 |
| Butter, opened and undated, thrown out to be safe | 3 kg at $9.00 | $27.00 |
| Taro chips, finished bags past their best-by | 12 bags at $2.10 | $25.20 |
| Ube paste, an opened tub nobody claimed | 1 tub | $18.00 |
| Total | $99.00 |
Ninety-nine dollars a month is about $1,190 a year from one small kitchen, and none of it was spoiled by anything except its place on the shelf. The finished chips are the costly kind: they carried the ingredients, the frying and the bag. If you sell wholesale, a buyer's rule about how much shelf life must be left at delivery makes rotation stricter still, as in minimum remaining shelf life.
Where this stops working
Rotation by habit depends on people reading dates, and people are busy. A delivery goes in front because the back is full. The new person opens a fresh case because the old one is on the top shelf. Two lots of the same cream sit side by side and nobody can tell which is older without turning every carton. And the habits only cover the shelf: when you send stock to a market stall, fill a wholesale order or make a batch, someone still has to choose which lot to take, and the easiest one to reach wins.
How TaroStack does it
TaroStack makes FEFO the default, so the right lot is the one you're told to take, not the one you remember to look for.
The oldest date goes first, everywhere stock is picked. Every lot carries its dates: your lot code, the supplier's, the production date and the best-by or use-by. When you make a batch, fill an order, move stock between sites or ship, TaroStack chooses the lot that expires first, unless a customer's own rule says otherwise. A store that wants at least 60 days left gets a lot with 60 days left, and with planning, a batch made too early for a customer's minimum is flagged before it's made. The rotation the procedure asks of people is what the system does on its own.
You hear about it before it expires, not after. Alerts tell you which lots are expiring, in the app and by email, one per problem or one summary a day. Better still, TaroStack forecasts what will expire before it's sold and what that will cost, while there's still time to use it in a special, a staff meal or a discount. That's step 6 of the procedure, done by the system every day.
Dates are on the shelf as well as in the system. Lot labels print with the lot code, the date and a barcode, so the date is the first thing anyone sees. Scanning a supplier's GS1 case label at receiving fills in its lot and use-by date, so step 1 and step 2 take a scan rather than a pen. Stock on hold sits apart from what's available, so a doubtful case can't be picked by mistake.
And the write-offs tell you what to fix. Every adjustment carries its reason (expired, spoiled, damaged, sample), so the losses report shows what expired, where and what it cost, by item and site. If the coconut cream keeps expiring, the reorder list shows it in days of cover at the rate you use it, with reorder points suggested from how it actually moves, so you can buy less, more often.
| Step | By habit | In TaroStack |
|---|---|---|
| Which lot to take | Whoever reads the date | The soonest date, chosen for you |
| Short-dated stock | A daily look along the shelf | An alert, and a forecast of the cost |
| Dating a delivery | A pen, at receiving | A scan of the supplier's label, or a printed lot label |
| What expired | A guess at month end | The losses report, by reason, item and site |
Lots, first-expired-first-out picking, expiry alerts, the expiry forecast and the losses report are on every plan, from $49 a month; planning, with its shelf-life checks before a batch is made, is on Standard at $99. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.