FIFO Systems vs LIFO Systems

Learn more about FIFO Systems & LIFO Systems, their differences, similarities, and what is right for you!


What is FIFO and LIFO?

While most people know that FIFO stands for “First In, First Out” and LIFO is “Last In, First Out” the general perception in the industry goes something like this: FIFO = Good, LIFO = Bad. Of course, as in most things in life, it’s more complicated than that. In a typical distribution center, many thousands of products are received and shipped every day and the volumes for each product vary from multiple pallets to a case or two. For the sake of this blog, we are going to only look at the items that are full pallets in/out as these are typically the products that suit FIFO storage and LIFO storage.

fifo system installed and designed by 3d storage systems

How does FIFO and LIFO pertain to my warehouse operation?

While Floor Storage, Double Deep Racking, Drive-in Racking and Pushback Racking are defined as LIFO storage products, depending on how the inventory is received and shipped, how many pallets are on hand and how the rack system is configured, FIFO can be achieved with these systems.

The simplest example is a project we are working on now where over 5,000 pallets of ketchup and vinegar are being stored. The products arrive by the truckload, with each truckload being one sku (stock keeping unit) and one lot code. Utilizing a combination of double stacked floor storage and pushback, multiple bays/lanes are filled with the same product. Within each lane or bay is all the same dated material. The warehouse operator simply ships out the oldest lane first and never puts new product in a partially filled lane – they wait until the lane is completely empty before refilling with new material.  In this example First In, First Out is easily achieved.

Furthermore, while Pallet Flowrack and Standard Selective Rack are considered FIFO storage products, care must be taken to ensure the oldest pallets are retrieved first. In a Pallet Flow System, there will usually be several lanes of the same product so it is crucial to empty the oldest lane first, otherwise FIFO is lost.

Choose 3D Storage Systems for Your FIFO and LIFO Needs

Learn more about FIFO and LIFO operations by contacting us directly or by reading The MHDEA Journal article “The FIFO Myth”, written by our very own President, Kevin Minkhorst.

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