What Rule Should You Follow For Effective Stock Rotation?

When it comes to the best practices of inventory management, stock rotation is near the very top of the list. This is because stock rotation is an approach that helps you to ease the problem of stock loss. It gives you better control over the movement of products into and out of your store. In turn, this allows you to organise your stock so that you avoid loss by way of expiration or obsolescence. On top of this, effective stock management also increases food safety as it reduces the chances of expired products causing customers harm.

To learn more about food hygiene standards, take a look at our article, ‘What Is Due Diligence In Food Safety?’ 

There are two main stock rotation or inventory replenishment methods worth noting. These include: 

First-In, First-Out:

The first-in, first-out (FIFO) method is the most common stock rotation rule used. It involves selling the products that arrive first in your store. In other words, you’ll place your slightly older products at the front of the shelf, with the newer products at the back. Essentially, it’s about replenishing your shelves from the back.

This will benefit your food establishment because it will allow you to stay on top of your stock, knowing what products to use first, thereby reducing waste. It also enables you to keep track of your stock, keeping colleagues informed and up to date as new products are delivered. Remember to keep your shelves looking pleasant as this will show customers that all of your products are worth buying.

First-Expired, First-Out

First-expired, first-out (FEFO) is the second well-known stock rotation method used. This organised approach is used to deal with perishable products or those with a specific expiry date that begins at your warehouse and ends at your store. The expiry or sell-by date of a product triggers this process.

Here are our simple steps to carrying out this type of stock rotation:

1. When products enter your food establishment, the first thing you should do is check the expiry dates.
2. Place the products with the shortest shelf-life near the front of the shelves. This will encourage you to use these products first.
3. It can be helpful to assign expiry dates to your various batches so that everyone in your supply chain knows what is happening right up to when your product reaches the shelf.

A robust inventory management system that tracks information will let you know exactly when to push stock from your warehouse to your store so that it doesn’t become obsolete. 

To learn more about how to stay on top of your food hygiene, take a look at our article, ‘Essentials of Food Hygiene: 10 Rules You Must Follow’.

Stock rotation is essential when it comes to inventory management. Whilst the main benefit of stock rotation is that it lowers the total losses due to obsolescence and deterioration, there are several more advantages. Below, we’ll highlight some other benefits of following the different stock rotation methods.

What Are The Benefits of FIFO?

• Avoids dead stock - Dead stock can cause serious damage to your business. By implementing the FIFO rule, you can avert the problem of dead stock by selling the inventory that arrives first in your store. As long as you arrange it accordingly on your shelf, you shouldn’t need to worry about facing dead stock.
• Reduces inflation - First-in, first-out reduces inflation because you’re selling your oldest items first. If you assume that inflation is constant, the purchase price of older inventory is lower than that of the stock you bring in thereafter. 

What Are The Benefits of FEFO?

• Product quality - First-expired, first-out allows you to guarantee product quality. This in turn leads to customer satisfaction and a boost in reputation. To find out more about maintaining quality in your food establishment, have a look at our article, ‘What Are The Food Hygiene Ratings & What Do They Mean?’.
• Food freshness - This type of stock rotation allows you to maintain top quality fresh products at all times, which is great for both you and your customers.
• Avoids dead stock - Like the first-in, first-out method, FEFO allows you to avoid dead stock. In this context, it involves avoiding obsolete inventory at a warehouse level, which is just as devastating for your business.
• Reduce costs - By following the first-expired, first-out method, you can reduce the cost of stock expiring on your shelf, the cost of the damage to your brand image and the cost of customer returns.

Here is an outline of how to work out which stock rotation method to follow:

FIFO method

This method is ideal for those who stock seasonal categories, fresh food or have a policy of displaying and selling older stock first. This includes catering companies, kitchens, pubs, restaurants and cafes, to name a few. It also works well for those who stock products that have short demand cycles. An example of this is a clothes shop where styles can quickly become obsolete. 

FEFO method

The ‘E’ for expired is what drives this stock rotation method. It’s best to use this approach if you sell perishable goods. Such industries include:

• Food and beverage
• Pharmaceutical
• Agriculture

What Is Stock Rotation?

Stock rotation is the process of organising inventory or produce to reduce stock loss caused by expiration or obsolescence. The most basic form of stock rotation involves moving products with impending sell-by dates to the front of the shelf and moving products with later expiration dates to the back.

How Do I Rotate My Stock?

To keep your stock rotated effectively, it is essential to have a system in place. Start by organising your inventory based on the products’ use-by dates and create separate areas for older and newer stock. You may want to make a habit of placing older items closer to the entrance of your cellar or storage area, and newer items further away. This will help you keep track of your inventory and ensure that older items are sold first.

How Do You Implement Stock Rotation At Your Premises?

First things first, you should make sure that all of your staff are aware of the importance of stock rotation and understand how your system works. The following steps are essential when it comes to implementing a solid food stock rotation:

• Storing or displaying food with a short shelf life at the front of the shelf
• Checking dates on food when it is delivered, used or put on display
• Storing or displaying food with a longer shelf life at the back 
• Always using food in the correct order
• Checking that food is in good condition before using it
• Removing any out-of-date stock from storage or display

If you work in the food industry, then our online Level 2 Food Hygiene certificate course is for you. An incredibly important part of food and safety hygiene, stock rotation is vital for those who sell or produce products with sell-by dates. Beginning at just £4.99, our comprehensive online food hygiene training covers key rules for your kitchen including the Four Cs, HACCP, temperature control, and personal hygiene, to name a few.

All successful candidates are entered on the national training register and certificates can be verified by employers by clicking Validate a Certificate and typing in the certificate number. If you have any questions, need advice, or you’d simply like to speak to a member of our team, don’t hesitate to contact us.