All About FEFO in Dynamics 365

Many are familiar with the term, FIFO, or first in, first out.  First Expired, First Out, or FEFO, is an inventory management and logistics methodology used when stocked products expire. The intent is to reserve and use the inventory to fulfill requirements using the shelf-life items with the earliest expiration date. FEFO is popular in the food and drug industry but can be applied in any situation where products have a limited useful shelf life.

To use FEFO to manage reservations in Dynamics 365 for Operations, a properly configured Item Model Group and Tracking Dimension Group must be created and they must be assigned to released products.

Setting FEFO Control

To utilize this feature, navigate to Inventory Management > Set Up > Inventory > Item Model Groups

setting up FEFO control in Dynamics 365 for Operations

  • Create the Item model group with the FEFO date-controlled check on.
  • Also select the Pick criteria to be followed for items assigned this group.
  • Assign the FEFO Item Model Group, just created, when created released products as needed.
  • Assign a Tracking Dimension Group which is active for batch number tracking, and primary stocking is checked.
  • Also assign to those items, the appropriate shelf life period in days, which will be a required field if the previous two bullet items are fulfilled.  Shelf Life is found under the Manage Inventory section of the released product form.

By making use of FEFO, companies can utilize Dynamics AX to minimize waste from having to dispose of expired items like frozen foods and meats, as well as increasing customer satisfaction.

FEFO option was first introduced in Dynamics AX 2009 Process Manufacturing module and is also available in Dynamics AX 2012.


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