Stock Rotation Compliance (FIFO/LIFO)

A Stock Rotation Compliance system transforms inventory management from manual, error-prone rotation into systematic, enforcement-based FIFO/FEFO compliance with automated expiration monitoring and regulatory-ready documentation. The system operates across four integrated workflows: receiving, inventory tracking, pick sequencing, and compliance verification.

**Receiving and Date Capture:** When product is received, the system captures critical data: product identity (SKU, batch number), manufacturer expiration date, received date, location placement (which shelf, bin, or aisle), and lot/batch traceability. The system integrates with receiving scanners or mobile devices; staff scan the product barcode and confirm expiration date (scanned from packaging or manually entered). The expiration date is highlighted visually if within 90 days of current date (amber warning) or within 30 days (red critical warning). The system automatically calculates shelf life: "This product expires 2024-11-15 (47 days remaining). Recommended rotation priority: High—ensure consumed within 30 days." Product placement is recorded spatially: "Batch 2024-0847 placed in Cold Room 1, Shelf 3, Position 1-4" (not just "Cold Room 1"). This granular location data enables physical verification during compliance audits.

**Inventory Tracking with Expiration Visibility:** The system maintains real-time expiration status for all inventory. A dashboard shows: (1) Expiration timeline—products expiring in the next 7 days, 30 days, 90 days—ranked by days-to-expiration; (2) Expiration risk—flagging product categories where waste is historically high; (3) Aging analysis—oldest product in each category, time-since-receipt. The system automatically triggers alerts: "Batch 2024-0847 of Product X expires in 6 days. Current inventory: 240 units. Recommended action: Prioritize this batch in customer picking, feature in promotional pricing, or initiate destruction." For perishable products (fresh food, biologics), the system can calculate "optimal consumption window"—the date range when product quality is best and consumption should be prioritized.

**Enforced FIFO/FEFO Pick Sequencing:** When a picking order is generated, the system automatically sequences picks by FIFO/FEFO rules. A customer order for 50 units of Product X triggers: (1) Identify all inventory of Product X with location, receipt date, and expiration date; (2) Sort by expiration date (nearest expiration first); (3) Allocate to this order from the soonest-expiring batch; (4) If allocation exhausts that batch, continue to next batch; (5) Generate pick list with location sequence that guides staff to the correct shelf/bin in the correct order. The pick list looks like: "Order #54321: Pick 50 units Product X from Cold Room 1 Shelf 3 Positions 1-4 (batch 2024-0847, expires 2024-11-15), then from Cold Room 2 Shelf 1 Positions 8-12 (batch 2024-0848, expires 2024-11-22) if needed." Staff follow the pick sequence; the system verifies that picked units match the sequence (via barcode scan). If staff attempt to pick from the wrong location, the system alerts: "You scanned position from Cold Room 2 Shelf 1, but your pick list says Cold Room 1 Shelf 3. Confirm the location or correct your scan."

**Expiration Alerts and Proactive Management:** The system continuously monitors approaching expiration dates and generates proactive alerts. Alerts escalate by severity: (1) Green—90+ days until expiration, normal operations; (2) Amber—30-90 days until expiration, recommend prioritization in picking; (3) Red—<30 days until expiration, immediate action required; (4) Critical—<7 days until expiration, this product must move today or be destroyed. For red-critical alerts, the system notifies the facility manager and can automatically generate: promotional pricing recommendations ("Reduce price by 20% to accelerate sales"), customer communication ("We have 240 units of Product X expiring 2024-11-15 at 15% discount—available for immediate shipment"), destruction work orders ("If not sold by 2024-11-08, destroy 240 units following protocol [waste disposal procedure]"). For high-value products, the system can suggest: alternative customers ("Hospital Network X routinely purchases this product; offer at cost to accelerate inventory turnover"), repurposing ("This medication formulation could be donated to disaster relief; contact partner NGO").

**Compliance Verification and Audit-Ready Documentation:** Regulatory compliance requires proof that FIFO/FEFO was followed. The system maintains immutable records: (1) Receiving records—date received, location placed, expiration date; (2) Pick records—batch picked, quantity, date, customer, employee; (3) Expiration timeline—age of inventory, expiration dates, disposal date if product expired. When a regulatory inspector arrives, the facility provides: (1) Receiving report—all inventory received in the past 12 months, sorted by expiration date; (2) Rotation audit—randomly selected customers, showing that product delivered to customer was received before newer product that remains in inventory (proving FIFO); (3) Expiration management—no expired product in inventory, all expiring product managed systematically. An inspector observing a physical product can ask the system: "Tell me about this unit (scan barcode)." The system returns: "Batch 2024-0847, received 2024-10-01, location Cold Room 1 Shelf 3 Position 2, expires 2024-11-15. 156 units of this batch received; 124 units picked and sold to [customer list with dates]. This unit was picked on 2024-10-28 and delivered to Customer X. 32 units remain in inventory (expected: should have been consumed by this inspection date; recommend destruction if compliance is priority)." This complete, time-stamped record is audit-ready.

**Integration with Supply Chain:** For facilities managing multiple SKUs across perishable and non-perishable categories, the system integrates product characteristics: perishable items (fresh food, biologics, medications) are flagged for aggressive rotation; slow-moving items are monitored more closely; high-value items trigger early warnings. For facilities with multiple distribution centers, the system provides roll-up visibility: "Across all 8 distribution centers, 12% of inventory is at red-critical expiration status (147 SKU-location combinations expiring within 7 days). Recommend: Network-wide promotion featuring these SKUs, inter-facility transfer if demand varies by location, or accelerated destruction scheduling."