Virtually every business that stocks perishable inventory implements an inventory management strategy to ensure inventory is utilized before it can spoil or expire. This article will offer best practices for perishable inventory management.
What is perishable inventory?
Perishable inventory refers to inventory with a limited shelf life that could spoil or become unsafe. The most common types of perishable inventory include food and beverages, chemicals, and medications.
What is perishable inventory management?
Perishable inventory management refers to controlling, monitoring, and getting the most out of perishable goods before they are no longer safe, suitable, or legal. Typically, the best perishable inventory management strategies include expiration date tracking and the implementation of inventory control measures that ensure perishable goods can be sold or used before they spoil or expire.
Why is it so essential to practice inventory management for perishable goods?
Implementing inventory management for perishable goods is critical for two chief reasons: safety and profitability.
Safety, of course, comes first. The proper management of perishable goods greatly reduces the risk of selling, serving, or using expired or spoiled consumables. This is of utmost importance whether you work at a restaurant, a pharmacy, or a factory that utilizes perishable chemicals.
Profitability is the second reason why inventory management for perishable goods is of utmost importance. Inventory shrinkage occurs when inventory expires or spoils before it can be used. This means there is no way to recoup the costs of purchasing, maintaining, tracking, or disposing of that inventory. This includes wasted labor and unnecessary carrying costs.
Additionally, outside of safety and profitability, many businesses understand that it is environmentally irresponsible to let perishable inventory go to waste, significantly when a better inventory management strategy could have helped avoid such shrinkage in the first place.
How to track perishable inventory
When properly implemented, a perishable inventory management strategy should save your business time and money in the short term and in the long run. Here are six best practices you can implement to improve your tracking of perishable inventory.
1. Implement and utilize an inventory management system
Inventory management software is widely considered the easiest and most intuitive way to track inventory, especially if there is a sizeable amount or if that inventory turns over or expires quickly.
The best inventory management software makes it easy to set customized alerts for low stock levels and upcoming expiration dates. These alerts can work together to ensure your business always has enough inventory on hand to meet customer demand while nudging you when it’s time to move inventory before it expires.
This easy, comprehensive guide will help you:
Free Ebook: Getting Started With Inventory Tracking
2. Use a spreadsheet if software is not an option
If, for whatever reason, your business is not ready to implement inventory management software, then the next best bet is to utilize a spreadsheet that enables the tracking of expiration dates for all perishable inventory.
Related: A Guide to Tracking Expiration Dates (with Excel Spreadsheet Template)
3. Set calendar alerts for expiration dates
Suppose you choose to implement inventory management software. In that case, you won’t need to use a spreadsheet to track perishable inventory or create a calendar with reminders of expiration dates. However, if you’re not ready to adopt inventory management software yet, you’ll probably want to set up calendar alerts to work with your expiration date tracking spreadsheet.
If you stock more than a few dozen items, manually tracking these events on the calendar will likely take up too much time.
4. Create a standard operating procedure
Whether you use inventory management software or a spreadsheet to track perishable inventory, you’ll want to articulate your inventory management strategy fully in an SOP.
This standard operating procedure should be accessible to all employees and fully explain how perishable inventory is managed, tracked, controlled, and disposed of. Any time you change how much inventory is managed, the SOP should continually be updated.
5. Implement the FIFO method
Also known as the first-in, first-out method, FIFO is a favorite strategy in restaurants and medical practices. The technique ensures that the oldest stock is sold or used before the newer stock. This is mainly done by shelving the first expiring stock in front of the stock that expires later. Naturally, employees will reach for the items that are shelved first.
6. Perform regular audits
Regardless of what perishable inventory management strategy your business decides to implement, it’s essential that regular audits of expiring inventory and the standard operating procedure are performed. How frequently these audits should be performed will vary based on your industry, your profit margin, and the level of risk your business can tolerate.
About Sortly
Sortly is an inventory management solution that helps you track, manage, and organize your perishable inventory from any device, in any location. We’re an easy-to-use inventory software that’s perfect for large or small businesses. Sortly builds inventory tracking seamlessly into your workday so you can save time and money, satisfy your customers, and help your business succeed.
With Sortly, you can track perishable inventory and anything else that matters to your business. It comes equipped with smart features like barcoding & QR coding, low stock alerts, customizable folders, data-rich reporting, and much more. Best of all, you can update inventory right from your smartphone or tablet.
Whether you’re just getting started with inventory management or you’re an expert looking for a more efficient solution, we can transform how your company manages inventory—so you can focus on building your business. That’s why over 15,000 businesses globally trust us as their inventory management solution.
Start your two-week free trial of Sortly today.
