Case Study: Cold Storage ERP + WMS with FEFO for Frozen Shrimp Operations

Context

At Sandhya Aqua cold storage, processed shrimp inventory is maintained at around -18C before dispatch. This environment is very different from regular warehouses:

• Product quality is time and temperature sensitive.
• Inventory age directly impacts business value.
• Mistakes in stock movement and lot selection create hidden dead stock.
• Manual reconciliation causes recurring gaps between physical and system stock.

During onsite operations, one core inventory principle became central to the system design:

• FIFO (First In First Out) is useful.
• LIFO (Last In First Out) is sometimes used operationally.
• But for perishables, FEFO (First Expiry First Out) is the control that protects both quality and profitability.

Problem

Before the solution maturity stage, operations faced predictable pain points:

• Lot/expiry-driven picking discipline was inconsistent.
• Dead stock accumulated due to delayed identification of near-expiry inventory.
• Weight reconciliation at each movement stage was not consistently tracked end-to-end.
• P&L impact of wastage and holding inefficiencies was visible only after delays.
• ERP and warehouse execution were not tightly synchronized for day-to-day decisions.

Objective

Implement a tightly integrated ERP + WMS operating model for frozen shrimp storage and movement that:

• Enforces FEFO at execution level.
• Tracks weight reconciliation across operational steps.
• Improves stock aging visibility and dead-stock prevention.
• Provides operational and financial insights for faster decisions.

What We Implemented

1. ERP + WMS Integrated Workflow

We implemented end-to-end process alignment between ERP transactions and warehouse execution states.

• ERP handled planning, accounting, and commercial control.
• WMS handled lot-level inventory authority, location control, and movement execution.
• Integration ensured no silent divergence between system intent and floor reality.

2. FEFO-Driven Allocation and Dispatch

We introduced FEFO as a practical execution rule, not just a reporting concept.

• Each lot carried expiry-aware attributes.
• Picking recommendations and validations were FEFO-prioritized.
• Exception handling was logged when non-FEFO picks were required for business reasons.

This directly reduced the probability of older lots getting stranded.

3. Weight Reconciliation Across Steps

Weight consistency was treated as a first-class control point.

• We captured weight checkpoints across inbound, internal movement, and dispatch stages.
• Reconciliation deltas were surfaced early instead of at period-close.
• Supervisors could investigate variance with transaction-level traceability.

4. Dead Stock and Wastage Insights

We built decision-oriented visibility for operations and management:

• Aging buckets for stock at risk.
• Lot-level movement velocity trends.
• Wastage-prone categories and process bottlenecks.
• Actionable indicators linked to business outcomes, not just raw logs.

5. P&L-Linked Operational Monitoring

Operational data was translated into financial relevance:

• Expiry risk and delay signals linked to potential value erosion.
• Faster identification of inventory that needed priority movement.
• Better planning inputs for procurement and dispatch decisions.

Results

The integrated model produced clear gains:

• Significant reduction in dead-stock build-up through FEFO discipline.
• Better control over wastage drivers through earlier visibility.
• Improved reliability of weight reconciliation across process stages.
• Stronger trust in inventory and operational reports.
• Better alignment between floor execution and business-level profitability monitoring.

Practical Lesson

In perishable cold-chain operations, warehouse success is not only about storing stock correctly. It is about moving the right lot at the right time with disciplined data controls.

FEFO + reconciliation + ERP/WMS integration is what turns cold storage from a static inventory space into a measurable, decision-ready operation.