Allocating Lot Numbers from the Oldest Available Using FEFO in Business Central

Jun Wang

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Allocating Lot Numbers from the Oldest Available Using FEFO in Business Central
In industries where managing inventory with expiration dates is critical, such as food and pharmaceuticals, ensuring that items are used in the correct order is essential. Microsoft Dynamics Business Central supports this through the First-Expired-First-Out (FEFO) functionality. This feature helps businesses manage inventory more effectively by ensuring that the oldest products are used first. Here's how to set up and use the FEFO feature to allocate lot numbers from the oldest available stock.
Understanding FEFO
FEFO ensures that items nearing their expiration are sold or used before fresher stock. This approach minimizes waste and enhances product safety. For FEFO to function, specific settings and conditions must be met within Business Central.
Prerequisites for Using FEFO

Item Tracking: Each item must have a serial or lot number to track its movement and expiration.
Item Tracking Setup: In the item’s tracking code setup, either the 'SN Warehouse Tracking' or 'Lot Warehouse Tracking' must be activated.
Expiration Dates: Items must be posted to inventory with an expiration date.

Configuring Your Environment

Enable FEFO on the Location: Navigate to the location setup where you want FEFO to be applied. Ensure that the 'Require Pick', 'Pick According to FEFO', and 'Bin Mandatory' toggles are turned on. This configuration makes sure that the system automatically selects the oldest lots during the picking process.

Implementing FEFO in Microsoft Dynamics Business Central is straightforward once the prerequisites are met. By following the steps outlined above, businesses can improve inventory accuracy, reduce waste, and ensure compliance with industry standards for product freshness and safety.