Fe Fi Fo! How to use FEFO to Reduce Spoilage in Food Inventory Systems with Microsoft Dynamics NAV

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Time seems to have a way of complicating things.  And if you work with food, you understand the complications of time all too well.  When you manufacture or distribute food, you not only have to generate adequate inventory turns to maintain and grow profit levels, but you also have to ensure that those turns do not exceed the shelf life of your goods.  Reducing spoilage in food inventory is a must and your bottom line depends on it. When it comes to inventory movements and picks in food manufacturing, some arbitrary accounting methodology just isn’t going to cut it.  You absolutely must have a method that considers one of your most important factors–time.  So you probably use, or want to use, First Expiry First Out (FEFO) to reduce spoilage in food inventory systems for inventory movement, especially picking.

The APICS Dictionary defines First Expiry First Out (FEFO) as “a picking methodology assuring that the usage shelf life of items is optimized.”  At eSoftware Professionals, we understand how important FEFO is to food-related businesses, and that is why our eFood-ERP system leverages the FEFO capabilities of Microsoft Dynamics NAV.  eFood-ERP is an effective, mid-market food and beverage solution built on the flexible and robust Microsoft Dynamics NAV ERP system.  When configuring your warehouse locations in eFood-ERP, you can specify that all inventory movements and picks for that location be done using FEFO.  This is done simply by placing a check in the “Pick According to FEFO” box under Bin Policies.

But, in order for this policy to take effect, some additional criteria must be met.

  • The location must also be configured to require picks.
  • The item being picked must have a serial and/or lot number.
  • The item’s item tracking code must have either SN Warehouse Tracking or Lot Warehouse Tracking turned on.
  • The item must have been posted to inventory with an expiration date.

When all of those criteria are met, then serial and/or lot-numbered items to be picked are sorted with the FEFO on all picks and movements, except for items that use serial number-specific or lot-specific tracking.  If there are serial or lot number specific tracked items on the pick or movement, then those are honored and listed first, and then the remaining items are listed in order of expiration. Now that’s how to get the job done.

In addition to FEFO, eFood-ERP provides a wealth of food-related ERP functionality with which to manage your business.  eSoftware has been working with food companies for over 25 years, and we were the first Navision (now Microsoft Dynamics NAV) partner in North America. Find out more about how eFood-ERP can help your food manufacturing operations today. Ask us how we can help you improve your food business’ bottom line at 503.608.3601 or [email protected]

By eSoftware Professionals - Food ERP Food and Beverage Software Partner

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