FIFO vs LIFO Inventory Flow

FIFO (First In, First Out) – An inventory flow where the first item in is the first item to leave the warehouse or racking solution.  Stock Keeping Units (SKU’s) enter and the first in is the first to leave a DC or warehouse.  This type of inventory flow is ideal for perishable goods and SKU types with expiration dates.

  • FIFO Advantages – Provides immediate access to products and is ideal for high turnover, high SKU stock count and quick product accessibility.  Also provides ultimate flexibility in SKU arrangement and SKU types.
  • FIFO Disadvantages – Poor use of cubic warehouse space and low-density applications can be limiting in a FIFO environment.
  • FIFO Racking Solutions

LIFO (Last In, First Out) – Inventory flow that operates under the assumption that the last SKU loaded into a racking system is the first to be distributed through the warehouse or DC.  LIFO inventory flow is ideal for less time sensitive products and non perishable items.

  • LIFO Advantages – LIFO inventory management is ideal for high-density storage where maximizing available warehouse space is paramount for DC operations.
  • LIFO Disadvantages – Decreased access to pallet positions with limited visibility of inventory in the back of racking solutions.  Supports a limited product mix and lacks flexibility in slotting design.
  • LIFO Racking Solutions

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