- January 20, 2022
- Posted by: simba001
- Category: Business Insights
As far as inventory management best practices go, stock rotation is right near the top. It’s alongside other methods such as product lifecycle management or employing a POS system that monitors what comes in and goes out of your store. Why? Because at its core, stock rotation is an approach that helps you to ease the problem of stock loss.
Managing inventory and stock rotation are keys to success and profitability to any retail organization. Many businesses have inventory and it has an expiration date. The question is, do you know how to manage it? We are going to explain my preferred way to manage inventory and eliminate potential loss of product due to expiration.
Managing inventory and stock rotation are keys to success and profitability to any retail organization. Many businesses have inventory and it has an expiration date. The question is, do you know how to manage it?
First In First Out (FIFO) Stock Management
Following the FIFO method means that you aim to sell the products that arrive first in your store. In other words, you’ll place your slightly older products at the front of your shelf with the newer products near the back. In this way, it’s about replenishing your shelves from the back. Moreover, you’re hoping that shoppers who walk into your store will choose those products facing them
At the back of each line is the newest product, with the product with the shortest date at the front. As products are needed they should be taken from the front of the line. As new stock comes in, this goes to the back of the line.
By using the FIFO method you ensure that products and stock are used in the right order. You will remove the risk of finding 5 products at the back of the shelf with a short date on, while the same stock with a long date is all used up.
Moving forward from the FIFO method you want to ensure that a rigid plan is implemented to ensure that perishable stock is consumed and isn’t left to rot. As stocktakers in Cambridgeshire we would recommend that you track weekly and monthly orders and set yourself a storage limit so the FIFO method can be used with ease.
As stock comes in, make sure you check the best before date and make sure it is later than the stock at the back of the shelf. Just because you follow the FIFO method, it doesn’t mean your suppliers do, so always double check dates.