Guides for Businesses

What Is FIFO in Stock Management and How Is It Applied?

FIFO is not software but a layout. Unless the physical arrangement of the shelf is right, record-keeping alone changes nothing.

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FIFO is among the best-known and least-applied rules in food businesses. The reason is that the rule is simple while applying it requires physical arrangement.

What does FIFO mean?

FIFO is short for "first in, first out".

It means using the product that entered the store first.

The purpose is preventing products ageing in storage.

Without it, new arrivals go to the front where they are easy to reach, and older stock stays at the back.

Those products eventually pass their date and get thrown away.

That is a direct cost line.

Even in a small business the loss can run to thousands of lira a month.

FIFO removes that loss almost entirely.

The rule is simple but applying it requires discipline.

How does it differ from FEFO?

The two abbreviations get confused but work differently.

FIFO orders by the date of arrival.

FEFO means "first expired, first out"; it orders by the expiry date.

In most cases the two give the same result; what arrives first also expires first.

But not always.

Dates can cross where products come from different suppliers or different batches.

Something that arrived later can carry a nearer date.

FEFO is correct in that case.

Food businesses should prefer FEFO; what decides is the expiry date, not the arrival date.

In practice both run together: the arrival date is recorded and the order of use follows the expiry date.

ConceptOrdering criterionWhere it suits
FIFODate of arrivalProducts without dates
FEFOExpiry dateFood products
LIFOLast in, first outUnsuitable for food
CombinedArrival record + date orderMost food businesses

How should shelves be arranged?

This is the heart of FIFO.

The rule is: new product to the back, old product to the front.

That sounds simple but applying it requires a physical arrangement.

Shelves should be deep and loadable from behind.

The best solution is shelving accessible from both sides; loaded from the back, picked from the front.

Where that is impossible, existing stock is pulled forward and new stock placed behind.

That means extra labour and is generally skipped.

Gravity shelving is another answer; products slide forward under their own weight.

It requires investment but makes the practice automatic.

In small businesses coloured labels can suffice; a different colour each week, with the older colour used first.

Shelves should also be divided by product group; a mixed shelf makes ordering impossible.

How is a labelling system built?

An unlabelled product is a product FIFO cannot be applied to.

Three pieces of information belong on every item.

The first is the arrival date: when it entered the store.

The second is the expiry date printed on the packaging.

The third is the opening date, where the pack has been opened.

The label should go on the visible face.

Colour coding is a practical addition; colours are assigned to days or weeks.

At a glance it is clear which product is older.

Labels should be durable; labels falling off in the humidity of a cold room is a common problem.

Waterproof labels or a marker pen should be used.

Labelling matters more on opened products; a container without an opening date has to be discarded because nobody knows when it was opened.

How is it applied in a cold room?

The cold room is where FIFO is hardest to apply.

The reason is limited space and difficult access.

Three practices are needed.

The first is zoning. The cold room is divided by product group: meat, dairy, vegetables, prepared items.

Each group has its own shelf.

The second is the height rule. Raw meat sits at the bottom and cooked product above.

That is a safety rule independent of FIFO, but it affects the layout.

The third is daily checking. The cold room should be reviewed daily and products approaching their date moved forward.

That check should be assigned to one person; a job that is everybody's responsibility becomes nobody's.

Products should not sit on the floor of a cold room; pallets or shelving should be used.

How often should stock be counted?

Counting is the control mechanism of FIFO.

It happens at three levels.

The first is a daily visual check, marking products approaching their date.

A five-minute task.

The second is a weekly partial count of high-turnover products.

The third is a full monthly count, compared against the records.

The difference reveals both waste and recording errors.

Count results should be recorded and compared month to month.

A rising waste rate means something is wrong with the FIFO practice.

Counting feeds purchasing decisions too; it reveals which products are overstocked.

How do staff adapt?

FIFO is not a system one person can apply alone.

Everyone entering the store has to follow it.

Three approaches help.

The first is making it easy. The right behaviour should be easier than the wrong one.

Gravity shelving and rear loading achieve that.

The second is visibility. Colour-coded labels make choosing the right product something done without thinking.

The third is the reason. Staff should know why the rule exists.

"We throw away this much product a month" is more effective than an abstract rule.

FIFO should be among the first subjects covered when training new staff.

The practice should be audited regularly; an unaudited rule breaks down within a week or two.

Where FIFO is properly established, date-related waste generally falls by 60 to 80 percent.

What tools support FIFO in practice?

The system becomes markedly easier with the right tools.

The first tool is colour-coded labels.

A colour gets assigned to each day and products are labelled with that colour on the day they open.

A visual check takes seconds.

The second tool is shelf arrangement.

Fresh deliveries go behind and older stock moves forward.

That physically enforces the right order.

The third tool is recording the opening date.

A date goes onto every pack as it opens.

The fourth tool is a weekly count; products nearing their date get listed and brought forward on the menu.

The fifth tool is digital tracking; a spreadsheet suffices in a small business.

Used together, those five markedly reduce waste and prevent problems during inspections.

The system only works where every member of staff applies it, so it should form part of induction training rather than existing as a written rule alone.

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Frequently asked questions

What does FIFO mean?

FIFO is short for "first in, first out".

How does it differ from FEFO?

The two abbreviations get confused but work differently.

How is a labelling system built?

An unlabelled product is a product FIFO cannot be applied to.

How is it applied in a cold room?

The cold room is where FIFO is hardest to apply.

How often should stock be counted?

Counting is the control mechanism of FIFO.

How do staff adapt?

FIFO is not a system one person can apply alone.

What tools support FIFO in practice?

The system becomes markedly easier with the right tools.

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