How to Implement an Effective FIFO Strategy in Your Operation
Many industries live or die by expiration or obsolescence dates. These dates can vary extensively, depending on whether the products are food and beverages, automotive or manufacturing parts, retail goods, or pharmaceuticals. But without a decent first-in, first-out (FIFO) strategy for distribution and material handling, companies in the food and beverage industry are prone to suffering both product spoilage and obsolescence.
Similarly, pharmaceuticals and electronics can be highly sensitive to product spoilage or obsolescence due to their time-sensitive warranties (electronics) or temperature and time sensitivity (pharmaceuticals). These products are all candidates for FIFO and FEFO inventory control strategies to ensure products are shipped and used by expiration or obsolescence dates.
Implementing FIFO allows businesses to streamline processes, limit material handling, maximize warehouse space, and even reduce carrying costs.
First In, First Out (FIFO)
FIFO, First-In, First-Out, is important for companies that distribute products with expiration dates or perishables, such as pharmaceuticals, food, and beverages. It's a safe practice that ensures your products will not expire or go bad. In a FIFO operation, the oldest products are used or picked first, ensuring product quality and safety.
FIFO works for items in any packaging, whether a can, bottle, or carton. FIFO can also be used for fresh, frozen, or canned items. It's important for good stock rotation to use the oldest stock first. When used correctly, the FIFO rotation method ensures companies serve safe products and reduce spoilage.
Implementing an Effective FIFO Strategy
FIFO works with random-access inventory (access to any part at any time) and sequential-access inventory (access to a part in a queue after removal of the part in front). The strategies below can help you while you're on your way to implementing an effective FIFO strategy:
Organization is the key to FIFO, beginning with a SKU and/or use-by, expiration, or received on date labels. Labeling is a critical step in the FIFO process.
Labels make your inventory trackable and increase visibility, your operators will quickly be able to identify misplaced and out-of-date items.
Related Article: FIFO Storage Racks and Food Date Labels
Using gravity carton flow racks automatically ensures proper FIFO rotation. With a carton flow rack, the oldest products are picked from the front as newer products roll forward — with fresh items stocked from the rear.
Overall efficiency is enhanced because restocking and picking can occur simultaneously. Carton flow keeps products organized, within reach, and fully visible. This increased visibility makes inventory easy to monitor and control.
UNEX SpanTrack Lane Carton Flow Rollers are loaded from the back and picked from the front. The first item you load is the first item you pick. If you load items in the order of expiration, fresh products slide forward from the back to replace the just-picked items when products are picked for an order. Replenishment occurs from the back of the shelves.
When adding new items, load shelves from the rear so that older items will be moved forward and used first. With the FIFO methodology, workers won’t have to continually check expiration dates, saving them time in picking operations because the worker will know they are picking older items first.
For healthy FIFO pallet rotation, use a gravity track or roller system. The wheeled rails or tracks allow the pallets to tilt downward, moving the pallets from the loading side to the unloading side.
In this way, your oldest pallet is always the first pallet removed. The pallet tracks can be mounted to the floor or supported by pallet rack beams. Gravity pallet systems increase storage density, minimize stock handling, and maximize warehouse space.
Learn more about UNEX Pallet Track for dynamic pallet flow
Gravity Flow Racks
Standalone structures like gravity flow racks create high-density FIFO storage. Inventory replenishment happens from the back, guaranteeing stock rotation without interrupting the pick line in the front.
Gravity flow racks also improve visibility, free up warehouse space for additional SKUs, improve access and sight lines, and reduce worker strain.
Gravity flow racks are denser than traditional pallet rack storage, which translates to an 80% reduction in travel time for pickers. Gravity flow racks are ideal for distribution, manufacturing, and retail environments that need carton flow but don't need to store pallets above the rack.
Sequencing With FIFO
FIFO is also used for sequencing. Sequencing (JIS) is part of the JIT (Just In Time) manufacturing process. Items are picked in sequential order based on when they will be used and delivered to production.
Flow Cell Carton Flow Racks help with part sequencing. On your auto assembly line, you may be building the interior of one brown, two blue, and one black van. The parts would be sequenced in order of production: one brown, two blue, and one black, ensuring the parts are available to the assembler at just the right time.
Optimize Your FIFO Strategy With UNEX
UNEX SpanTrack Lane or Wheel Beds help distributors ensure proper stock rotation when using the FIFO or FEFO method. Assemblers can increase pick efficiency and ensure parts arrive on the assembly line exactly when needed with Flow Cell Lineside.
To start maximizing your FIFO and/or FEFO operations, contact our space optimization experts for leading picking and storage solutions by UNEX.