FiFo (First in, First out)
In FIFO (First In, First Out), it is assumed that the oldest stock is sold or used first. This means that products are processed in the order in which they are received or produced. This method is particularly suitable for businesses dealing with perishable goods, such as food, pharmaceuticals, or cosmetics, as it helps prevent products from passing their expiry date or deteriorating in quality. By using older products first, you minimise waste and ensure more efficient inventory management.
An additional benefit of FIFO is that it better reflects the actual cost structure, as older, often cheaper products are accounted for first. This simplifies the calculation of profitability and provides a more realistic picture of the inventory value.
LiFo (Last in, First out)
In the LIFO method (Last In, First Out), the most recently received or produced goods are the first to be delivered. This system is particularly suitable for businesses storing homogeneous materials, such as sand, stones, bricks, or plastic. New deliveries are placed at the front of the warehouse, making them immediately available for distribution.
LIFO is often used in industries such as construction, where materials like glass, ceramics, and stone do not have an expiry date and maintain their value well. This method offers advantages when raw material costs are rising, as the newest, often more expensive products are written off first.
However, LIFO carries the risk that older stock may remain unused for longer, potentially causing inefficient use of warehouse space. Therefore, it is important to apply this method carefully and ensure that the products are suitable for long-term storage without quality loss.
Flow racks for lifo and fifo
Flow racks, also known as kanban racks, are versatile storage systems suitable for both FIFO (First In, First Out) and LIFO (Last In, First Out). In these racks, bins or products are placed on an incline, allowing them to roll forward due to gravity, which makes order picking efficient and easy.
In FIFO, products are replenished at the rear of the rack. They naturally roll forward due to the incline, ensuring that the oldest stock is used first, making it ideal for products with a limited shelf life or a fixed rotation cycle.
In LIFO, products are placed at the front of the rack and pushed back. This keeps the newest stock at the front for picking, while older stock is pushed further back. This method is particularly useful for goods that do not deteriorate in value or quality quickly.
Gravity flow racks thus provide a flexible solution for various inventory management strategies and are an efficient choice for warehouses with high throughput.
Fifo and Lifo in environments with specific requirements
FIFO and LIFO are not only valuable strategies in standard inventory management but also play a crucial role in environments with special requirements. In areas such as ESD-sensitive zones (Electrostatic Discharge) and cleanrooms, where strict hygiene and safety standards apply, these methods ensure orderly and controlled inventory management.
For these demanding applications, we offer specially designed ESD racks and cleanroom racks. These systems are tailored to meet the unique needs of such environments and support both FIFO and LIFO. They not only guarantee an efficient workflow but also contribute to the safety and integrity of the stored products.
With these customised solutions, it is possible to integrate inventory management seamlessly into sensitive production and storage processes without compromising the quality and safety of the working environment.
LiFo Kanban racks increase picking capacity at Smartphonehoesjes
A Smarthonehoesjes optimised its warehouse by installing LIFO Kanban racks beneath pallet racking, significantly increasing the picking capacity for fast-moving items. They created 640 picking positions with a customised design that efficiently utilised space and enhanced ergonomics.
This solution, consisting of four-level flow racks with 20 compartments, allows for quick inventory replenishment from the front. The result was a visual and operational improvement of the warehouse, with room for future growth.
Improve your inventory management with FIFO or LIFO
Whether you choose FIFO or LIFO, both strategies can help make your inventory management more efficient, reduce costs, and minimise waste. By selecting the right method and appropriate racking systems, you can enhance the speed, accuracy, and capacity of your warehouse. Want to learn more about how to implement FIFO or LIFO in your warehouse? Contact us for tailored advice and discover which solution best meets your business needs!