What does perishable means?
Perishable goods refer to products that have an expiration date, such food that will go bad if not consumed in a certain amount of time. Food items like milk and cheese, produce, and meat are all perishable.
The problem:
Inventories with perishable goods must be setup to ensure they sell off their stock before their goods become unsellable, in other words, losing money in the process.
Because perishable items go out of date, there is only a short window of time that a business can purchase, stock, and sell those products before they lose their value.
The strategies:
There are several know strategies to solve this problem but the must effective ones are the “first in first out” (FIFO) and the “first expired first out” (FEFO).
- What is FIFO?
The FIFO method means you aim to sell the products that arrive first in your store. It’s is a simple technique that focuses on stock rotation; older products are placed at the front of the shelf, newer products near the back.
- What is FEFO?
FEFO is an approach that uses expiry dates at your warehouse. This allows you to ensure expiration date for a product isn’t reached before it’s delivered to the customer.
If you sell perishable goods, food and beverages, it’s best to use the FEFO method. FIFO, FEFO and batches work well together, but can also be used independently of one another.
An organization does not procure all input materials at one go. In most cases, they also do not order one unit at a time. They order in batches, usually in lot sizes that are larger than those demanded by customers. For example, a manufacturing firm requiring 50,000 tons annually may order 4000 tons of steel to start with. The next order would be placed when the on-hand inventory is nearly depleted. Cycle inventory is the result of ordering materials in batches. Batch ordering is preferred by firms because they derive benefits of economies of scale.
The benefits:
- Reduced obsolete inventory
- Quality control
- Recalls (batches)
- Improved cash flow
- Customer satisfaction
- Inventory auditing
What’s the best perishable goods inventory software?
In order to stay on top of your perishable stock with low stock alerts, batch management, reports to see which products are expiring soon, date tracking of goods, purchase orders fully integrated with suppliers, stock quantities in multiple locations and all in one place, Telesto inventory management (www.telesto.app) is the perfect tool for the job, it will help you achieve and regain your inventory control for perishable and nonperishable goods; it will also help you save time, money, and effort.
Telesto runs on iOS, Android, Windows and MacOS.