FIFO, or First-in-First-Out, is an inventory management principle used in logistics and warehousing to ensure that the oldest stock is used, shipped, or sold before newer stock. This method prevents products from becoming obsolete, expiring, or deteriorating, making it especially important for perishable goods, pharmaceuticals, and time-sensitive materials. FIFO requires organized storage systems, accurate inventory tracking, and systematic picking processes in warehouses. When implemented correctly, FIFO improves stock rotation, reduces waste, and enhances supply chain efficiency by ensuring that goods move in a structured and predictable manner from receipt to dispatch.
Characteristics:
- Oldest stock is used first
- Prevents product expiration or obsolescence
- Enhances inventory control and stock rotation
- Requires organized storage and tracking
