Step-by-Step Guide to Stock rotation strategies for materials with shelf life

In the building materials industry, not all products are created equal. Some—like framing lumber or steel beams—can sit for months with minimal risk. Others, like adhesives, insulation rolls, and bagged concrete? They have a shelf life—and that means they require intentional stock rotation to avoid waste, warranty issues, and unhappy customers.

Poor stock rotation leads to:

Expired materials shipped to job sites

Lost revenue from unsellable products

Higher return rates

Damaged brand reputation

This step-by-step guide will walk you through how to build and enforce stock rotation strategies using best practices and ERP-driven workflows.

🛠️ Step 1: Identify Which Materials Require Rotation

Start by classifying your inventory by shelf life sensitivity.

Key product types to review:

Sealants, caulks, adhesives

Bagged or palletized concrete

Spray foam insulation or rolls

Waterproofing compounds

Paints, coatings, and epoxies

✅ Add an “expiration-sensitive” flag to these SKUs in your ERP for special handling.

🔁 Step 2: Choose the Right Rotation Strategy (FIFO or FEFO)

Not all rotation strategies are equal. The two most common are:

✅ FIFO (First-In, First-Out)

Oldest items are sold first

Ideal when manufacturing dates closely track with shelf life

✅ FEFO (First-Expired, First-Out)

Items are rotated based on expiration date, not receipt date

Better for SKUs where shelf life can vary between lots or suppliers

📌 Your ERP should allow per-SKU logic for FIFO or FEFO rules and track either lot number or expiry date.

📦 Step 3: Store Rotation-Based SKUs in Accessible Zones

Physical storage setup is crucial to support rotation.

Best practices:

Use pallet racking with front-facing pick sides for easy access

Keep date-sensitive items at eye level or lower to reduce pick errors

Create separate lanes or zones for each lot/expiration group

Avoid deep stacking that buries older product

✅ Pro Tip: Use color-coded labels or shelf markers for expiration awareness.

📲 Step 4: Enable Lot Tracking and Barcode Scanning

To rotate effectively, you need to know exactly which lot or batch is being picked and shipped.

Use barcode labels that include:

Lot number or batch ID

Expiration date

SKU and product name

Equip your team with mobile devices or scanners to:

Confirm correct lot at time of pick

Prevent picking expired or “blocked” lots

Update ERP inventory levels in real time

✅ Why it matters: Human error is drastically reduced when scanning validates picks against ERP rules.

🔔 Step 5: Set Expiration Alerts and Exception Reports in ERP

Waiting until stock expires to take action is too late. Your ERP should proactively flag:

Inventory within 30–60 days of expiration

Lots that haven’t moved in X days

At-risk SKUs by location or warehouse

Set up automated workflows to:

Notify purchasing and operations teams

Trigger markdowns or clearance pricing

Transfer slow-moving inventory to higher-demand branches

✅ Use these alerts to stay one step ahead of product loss.

♻️ Step 6: Train Staff on Rotation SOPs

Even the best tech won’t help if your team doesn’t follow through.

Create clear SOPs for:

Receiving and labeling new lots

Storing based on rotation priority

Picking from approved locations or batches

Flagging damaged, expired, or aging stock

✅ Include training on using mobile devices or scanners during putaway and picking.

💡 Step 7: Review and Optimize Based on Results

Track key rotation metrics like:

Stock write-offs from expired inventory

Fill rate on FEFO-flagged SKUs

Lot traceability reports

Frequency of rotation errors

Adjust your process based on:

SKU movement patterns

Seasonal demand

Supplier performance on shelf-life guarantees

✅ Your ERP reporting should help you find trends and fix gaps quickly.

Final Thoughts

Stock rotation isn’t just for perishable goods—it’s essential for any inventory that can expire, degrade, or become unsellable over time. With ERP-driven tracking, barcode integration, and disciplined SOPs, you can reduce waste, improve customer satisfaction, and protect your margins.

📦 Need help building a stock rotation workflow tailored to your product mix and yard layout? Let’s map it out step by step and set it up inside your ERP for accuracy and efficiency.