Accounting for expiration dates in warehouses. Implementation options

Currently, in almost every warehouse you can find products with expiration dates. Of course, this is especially true for pharmaceuticals, food, but in other areas we can also find similar examples. In building materials there are paints, dry mixes, in warehouses that store spare parts these are various oils, sealants, and other liquids. How do companies solve the issue of accounting for such goods?

1. Shelf life is not taken into account at all. This option is the simplest and does not involve automation and accounting for storage locations. In this case, the storekeepers are given an oral recommendation on the selection of positions, having a residual shelf life as low as possible. The problems posed by such a solution are obvious. After some time, expired goods accumulate on the residues, which must be written off and disposed of.

However, such a decision may be justified if:

1.1. The turnover of this nomenclature position is at least 5 times its expiration date.

1.2. The goods are not stored in stuffed racks and the storekeeper has access to any storage unit.

2. Accounting for expiration dates on paper cards. In the information system, expiration dates are not taken into account. However, at each storage location, storekeepers record information about the remaining shelf life. As a rule, this is marked with a marker on the packages, or the corresponding tag.

This option gives a speed increase in the selection of goods compared to the first, but also has a number of disadvantages:

2.1. Labor costs for the placement of goods are increasing.

2.2. An organizational restriction is introduced on the placement of goods with different expiration dates in one cell. This does not allow optimizing the use of warehouse space.

2.3. In case of violation by the storekeepers of the rules for the placement of goods, control by the information system is impossible. In this case, all the benefits of accounting for this information are lost, moreover, false information ultimately even slows down the process of selection!

3. The selection of goods with expiration dates by FIFO. The main idea of ​​this option - the selection of goods is carried out in the same sequence as its receipt (FIFO - First In First Out, first come - first leave). In this case, the expiration dates for the goods in the system are not maintained, which greatly simplifies the processing of goods, in contrast to the full accounting of expiration dates. Along with this, this option can significantly reduce the likelihood of stocks remaining in the warehouse with an expired shelf life.

However, it is worth noting that this option implies a significantly higher level of warehouse automation, namely:

3.1. Storage cells in the warehouse should be labeled.

3.2. In the information system, the goods should be listed by cells.

3.3. Placement of goods in cells. Either the system should recommend a location, or based on the results of goods placement, the address of the product location should be recorded in the accounting system.
In practice, this option is quite feasible for goods with expiration dates of six months.

4. The full account of expiration dates in a warehouse. Work on FEFO (First end - first out leaves the goods with the expiration date earlier), or BBD (Best before date - shipment taking into account the expiration date). This option, of course, is one of the most time-consuming from the point of view of accounting, however, it brings the best result. For this option, you need to implement a WMS system in the warehouse.

Subject to the technology of work in the warehouse, the probability of overdue balances tends to zero. Of course, it is impossible to exclude the situation that such a product may simply not be sold, however, the information system will be able to pre-warn about upcoming problems and the sales department, using the tools it has to motivate customers (sales, promotions, etc.), can stimulate the departure of such nomenclature items.

It should be noted that such functionality is quite difficult to implement. However, the biggest difficulties in implementing such a work scheme will be associated with the organizational component of the implementation. Such a process requires a complete revision of the paradigms in stock. I would also like to note that such an implementation in an accounting (or ERP) system significantly complicates the processes of all participants.

In this case, a reasonable compromise is the integration of accounting and WMS systems with the following details:

4.1. Accounting (ERP) system operates with balances and reserves. Sales managers reserve positions based on total balances. If necessary, they can obtain information on the remaining shelf life of stocks.

4.2. The WMS system operates with residuals by shelf life and storage cells. At the entrance, she receives applications for shipment and ships the items according to the technology of work installed in the warehouse.

This article did not address such an important point as control of the remaining shelf life upon acceptance and shipment (Often, contracts with suppliers and customers indicate the minimum percentage of the remaining shelf life at which the goods can be taken to the warehouse or shipped to the client. Often there are even more complex situations when the same client needs to ship goods with different minimum remaining shelf life, depending on the remoteness of the unit where the goods are sent. This problem will be described in Noah of the following articles.

Brief features of the types of accounting are shown in the following table:

Type of accountingType of information systemPros of the solutionCons DecisionsThe conditions under which the option is most optimal
Shelf life is not keptIs absentEase of useHigh probability of overdue balances in warehouses. There are no data on balances by shelf life.The shelf life of a position is more than a turnover of 5 times or more. Outdoor storage. Stuffed racks Storekeepers have a very low qualification. The accounting system in the company is absent, or, provides a minimum of business processes of the company. The IT department of the company is absent, or, if necessary, an outsourced employee is involved.
Accounting for expiration dates on paper cardsAccounting systemEase of use. Ability to prevent expiration dates.Complicating processes in the warehouse. The need for frequent inventories. There is no way to optimize position selection routes. The search for a position with the required expiration date may delay the selection process.The shelf life of a position is 3-5 times more than a turnover. A significant part of the positions are kept open. There are no stuffed racks. Storekeepers are of average skill and higher. The accounting system in the company is absent, or, provides a minimum of business processes of the company. The IT department of the company is absent, or, if necessary, an outsourced employee is involved.
FIFO Product Departure ControlPerhaps in the accounting system, however, a WMS-based solution is recommendedThere is no need to enter expiration dates on goods acceptance. Minimization of overdue balances. Work with goods with expiration dates does not differ from work with other goods. There is an opportunity to build optimal routes for the selection of goods.There is no data on the actual expiration dates in the system. Situations are possible when later batches received at the warehouse have shorter shelf life. Such situations are not handled.The option is used, as a rule, for working with dry mixes used in construction. They have a shelf life of 0.5 years or more, which virtually eliminates the situation with overdue balances.
FEFO Care ControlShelf life is maintained in the WMS systemMaximum control over expiration dates.A more complicated way of stock accounting. Strict discipline of storekeepers when working with goods. Installing WMS and providing the infrastructure that ensures the operation of the system requires financial investment.Food (especially dairy products). Pharmaceuticals Other areas with short shelf life of goods comparable to the turnover of these items

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