What is FIFO?

FIFO, is a fundamental inventory management practice where the first items received are the first to be sold, consumed, or shipped.

While FIFO is most critical for managing perishable goods, it’s a smart best practice  across many manufacturing industries.

With this quick blog post, my end goal is to help you learn…

• Key advantages of using FIFO
• How RF Plus supports FIFO without Trace
• Warehouse setup to ensure your team maintains FIFO best practices

Key benefits of FIFO

The biggest benefit of FIFO lies in managing products that lose value over time – due to expiry or overall decline in quality. Key benefits aim to:

• Reduce inventory write-offs by ensuring old stock doesn’t sit unused for extended periods
• Consistently deliver high-quality products to customers to strengthen your reliability and reduce order returns
• Improve cash flow by selling old stock first, manufacturers can recover investments faster and improve liquidity

But what about parts that don’t require detailed tracking of serial no, lot/batch, or expiry date?

What warehouse operators see in RF Plus – as users choose their next pick location, RF Plus displays the oldest available stock locations at the top of their list.

With a new option in RF Plus, operators will see all available stock locations, sorted by the inventory with the oldest receive date in the warehouse. Or in other words, RF Plus prioritizes inventory that’s been sitting in your warehouse for the longest period of time. This gives warehouse operators clear guidance on where to find the oldest inventory. Most importantly, it allows manufacturers to encourage FIFO discipline without strict lot control.

Where This FIFO Logic Is Applied

Once the configuration is enabled, stock locations will be sorted by FIFO on all of the following supported screens:

• Inventory Lookup – Users can quickly view all locations that contain a part, along with the transaction date and the inventory’s age.
• Inventory Transfers – When transferring inventory by part, the location list automatically prioritizes the oldest stock in the current warehouse.
• Customer Order Picking – During regular CO picking, operators can view locations sorted by FIFO and select the oldest available inventory.
• IBT Picking – Inter-Branch Transfer (IBT) picking also uses the FIFO location sort when selecting inventory.

Best Practices – make FIFO a habit

A question we get often is how do I implement FIFO Picking AND also ensure my workers are sticking to it?

In our experience, the most effective warehouse management strategies are the ones that work for both the business and the team on the floor. When setting up FIFO, it’s extremely important to:

1. Make it easy for operators to find (and tell apart) inventory in your warehouse
   • Establish multiple storage locations throughout your warehouse. Assign location names using proper conventions like ZABL, which incorporate a hierarchy of Zone, Aisle, Bay, and Shelf Level.
   • Label both inventory and their storage locations (don’t forget to barcode both!)

1. • Use color-coded bins and shelf dividers
      
2. Use special warehouse racking solutions that support FIFO picking
   
   
   • Use flow racking or conveyors in operations handling palletized products, or individual cartons. These storage solutions are loaded from the back, and will roll product to the front on inclined lanes with roller wheels
      
3. Leverage your WMS. Systems like RF Plus will guide operators to go pick from the stock locations with the oldest inventory first

Contact our team to get started

For more details on this configuration or to get help implementing FIFO picking workflows in your operations, reach out to your Customer Success Manager