Removal strategies are used in warehouse operations to select the best products based on specific criteria. There are three types of removal strategies available in Odoo First in first out (FIFO), Last in first out (LIFO) and First Expiry first out (FEFO)Closest LocationThe removal from the closest location is a new feature introduced in Odoo 15. These strategies will help to manage our stock in an efficient way. Let’s discuss Removal Strategies of FIFO and LIFO In Odoo 15 with complete description with respective screen-shot.
Let’s see general information about FIFO and LIFO.
FIFO (First In First Out) : A First In First Out strategy states that If a product was stocked first, will move out first in delivery order, after confirming a sales order.Companies should use FIFO method, If they are selling perishable products, such as fruits, vegetables, flowers, meat and meat by-product, fish and seafood, dairy products, pharmaceutical products, and chemicals.
Also companies whose selling products have short demand cycles, such as clothes, these kinds of companies have to make sure that they are not stuck with outdated clothing products.
LIFO (Last In First Out) : A Last In First Out strategy is an opposite method of FIFO, it states that if a product was stocked last will move out first in delivery order, after confirming a sales order.
FEFO (First Expire First Out) : The First Expire, First Out strategy is a bit different from the two others. Here, it is the expiration date that is important and not the date the product entered the stock.
Now let’s see the FIFO method in work in action : For this go to the Inventory > Configuration > Setting
Here you have to make sure that you have selected two options.
Option-1 : Go Under Traceability section click on Lot & Serial Numbers
Option-2 : Go Under Warehouse section and click on Multi-Step Routes
After enabling these options you can save the setting. Now click on Set Put-away Strategies on Locations.
After enabling this option you can save the setting. Now go to the Inventory > Configuration > click on locations.
When you click on the Location you will get on the Location page just like the below screenshot. Now click on the WH/Stock.
Here you can see the removal strategy under the logistics section, Select the method from the dropdown list, the First In First Out (FIFO) and then click on the save button. For reference you can see the screenshot below.
After this go to the Inventory > Products > Products. For reference you can see the screenshot below.
From the below screenshot you can see the list of products which are already created. You can select from there or you can create a new one also, as per your choice. Right now I am creating a new product.
Now click on the “Create Button” and a new window will appear. Add a Product Name, Sales Price and make sure that Product Type is Storable Product, go to Inventory tab Under Traceability section check that your Tracking is By Lots or Unique Serial Number, here I have selected By Lots now click on the Save button, and also Update the Cost of a Product and click on the Apply button.
Here you can see that your product has 0 on hand quantity. For reference you can see the screenshot above.
In order to fill this on hand quantity we will make a RFQ ( Request For Quotation )
After that, we’ll be able to purchase the item. Make a purchase order to accomplish this. First, create a two-quantity order. The order should be confirmed. Before validating the receipt, a pop-up message will inform us to add a lot and serial number. Now click on the “Create Button”.
Add your vendor and product, which we have created recently. Here I have ordered 10 quantities of desk with Unit Price of $30 .00, now click on the Save button and then Click on Confirm Order.
Now click on the received products.
We may then add our product’s lot and serial number from there. We can set the lot number by selecting the produced receipt. Choose the sign displayed in the screenshot below to add a lot number.
To trace the product’s movement, assign a Lot number to it, such as LOT 01 in this case. After that, you will receive the item.
Now click on the confirm button and validate the item.
Now you may go back to your Purchase record and click on Action → Duplicate
Here I have added 15 quantities of desk with Unit Price of $30 .00, now click on the Save button and then Click on Confirm Order.
Now click on the Receive products.
Now click on the Icon as shown in the screenshot below.
LOT 02 is being added here. Now click on the “Confirm button” and validate the records.
Now go to the WH/Stock location to check out the products. There is a tab for the current location, and we can see these products from there.
For this go to the Inventory > Configuration > Location.
Go to WH/Stock record and click on Current Stock smart button, Here you can see that our stock is added for the cheese sandwich with two different lots one is Lot 01 and the other one is Lot 02 with quantities of 10 Units and 15 Units respectively.
We can see that the product is being removed from the stock while being sold. So that we can create a product sale order. Now, Create a Sales Quotation, with a product of desk with 5 quantities, Save your Sales Quotation and click on the Confirm button
Now your delivery order will be created, go to your delivery order and click on the button as shown in the screenshot below.
From the above screenshot you can see that right now I am on waiting stage because the product is not available. You can check the product availability with the “Check Availability Button”. When you click on the operation button you can see that there are no items in the reserved area because of the availability of the product. When a product will be available, the item will be reserved for delivery.
According to our configured Removal Strategy of FIFO, which was first stocked according to our Incoming date with a Lot Number of LOT 01. So I can say our FIFO strategy is working correctly.
For your better understanding I will explain this with an example. Let’s imagine that you have three lots of apples in your warehouse. Those three have the following lot numbers: 01, 02, 03, each with 12 kg apples in it. 01 entered the stock on the 22rd of june, 02 on the 25th of june, and 03 on the 1st of July. A customer orders you 15 kg of apples on the 15th of July. With the FIFO strategy selected, a transfer is requested for the 12 kg apples of 01 and 3 kg from the 02 because 01 has entered your stock before the others. The box from 02 is taken because it has the oldest entry date after 01.
So, for every order of a product with the FIFO strategy selected, Odoo requests a transfer for the good that has been in your stock for the longest period.
I hope through this you will have an idea about removal strategy and putaway rules in Odoo V15 Inventory Module. If you like to read our more blogs then you can go to the Planet-Odoo