Materials with a shelf life break the ordinary logic of inventory management. Normal stock has a carrying cost. Perishable stock has a deadline, and past it the value is zero regardless of what you paid. That changes the calculation for ordering, storing, and issuing in ways that generic inventory rules don’t accommodate.

Shelf Life is More Than One Number

Several dates matter and they’re often conflated. Manufacture date, supplier expiry date, your internal retest or requalification date if you have one, and the remaining life you require at receipt.

That last is the one manufacturers most often fail to specify. Accepting a delivery with two months of life remaining on a material you consume over six is accepting a write-off. Put a minimum remaining-life requirement into purchase terms and enforce it at goods receipt — this single change eliminates a meaningful share of expiry losses in most operations that adopt it.

Issuing Rules

First-expiry-first-out should be the default, and it isn’t the same as first-in-first-out. A batch received later may expire sooner, and FIFO will happily leave the shorter-dated stock on the shelf.

This has to be enforced at the point of issue rather than left to judgement, because under time pressure people take what’s accessible. The system needs to direct which batch to pick, and picking a different one should require an override with a reason.

Ordering Against a Deadline

Standard economic order quantity logic breaks here. It trades ordering cost against carrying cost and will happily recommend a quantity that takes eight months to consume on a material with a six-month life.

The order quantity has to be capped by consumable life: however much you’d otherwise order, never more than you can reasonably use before expiry, with a margin for demand falling short of forecast. This makes smaller, more frequent ordering necessary for perishables, and the higher freight and handling cost is simply the price of the category.

Safety stock needs the same treatment. Buffer stock on a perishable item is buffer that expires. For short-life materials, supplier responsiveness is worth more than inventory, and it’s worth paying for.

Watching What’s Approaching

Expiry management should be forward-looking rather than a report of what already lapsed. Alert on batches approaching expiry with enough notice to act — prioritise them in production, reallocate to a site with faster consumption, or return them if terms allow.

Track expiry write-offs by material and by cause. The distribution usually points at a small number of items where ordering policy is systematically wrong for the shelf life, and correcting those handful is where the recovery is. Storage condition failures are worth separating out, since those are a facilities problem rather than a planning one and will not respond to better ordering.

The Forecasting Connection

Perishables punish forecast error asymmetrically. Over-forecast and you write off. Under-forecast and you expedite. Because both directions cost, these items justify more forecasting attention than their value alone would suggest.

ticktick.ai enforces first-expiry-first-out at issue, caps order quantities by consumable life, and alerts on batches approaching expiry.