It is currently impossible to know the exact expiration date of existing inventory in stores. If multiple batches of products exist simultaneously in a store, it is even difficult to get a decent estimate, as some consumers strive to find the freshest products.
However, distribution centers are a different story. In distribution centers, modern warehouse management systems ensure that inventory is shipped on a first-in, first-out basis. In addition, they track the exact expiration date of each batch of inventory.
Making full use of batch-level expiration data in inventory management reduces waste and improves service levels:
- When a planning system can calculate anticipated spoilage based on forecasted demand and the expiration dates of available inventory, it can order enough goods to replace soon-to-expire inventory before the products expire. This significantly improves the distribution center's service level to stores.
- First-class planning systems trigger early warnings when there is a risk of waste. This allows you to effectively disperse products to stores that are most likely to sell them at a high price, or gives you time to find other sales channels, such as discount stores, which may be willing to take these batches of products from you at a discount.
- Spoilage forecasts also show whether there is a systemic risk of waste, for example, due to products having large order batches compared to demand.