Glossary
FIFO
A rotation rule: the stock that was received first is the stock that ships first, so nothing sits at the back of the shelf for a year.
What it is
First in, first out. The oldest stock on hand is the next stock to leave. In a warehouse this is a physical rule about which pallet, which bin, which case the picker is sent to, and it is enforced by directing the pick, not by hoping.
Why it matters
Stock that is never rotated ages in place. Packaging fades, cartons get crushed, a product revision ships alongside its predecessor, and a customer receives a unit that looks like it was found in a basement. FIFO keeps the queue moving in the order it arrived, so the age of the oldest unit on hand is bounded by how fast the product sells.
It also matters for reconciliation. When every pick is directed to the oldest stock, a count that finds newer stock consumed before older stock is a signal that someone picked from the wrong place, and the ledger can show where.
A worked example
ITEM-01 has two receipts in stock: a pallet received in February in bay B-02-01 and a pallet received in April in bay B-02-03. An order for one case comes in. Under FIFO the picker is sent to B-02-01, the February pallet, even if B-02-03 is closer to the packing bench. When B-02-01 is empty, the system starts directing picks to B-02-03. Nobody has to remember which pallet is older; the receipt date on the movement row does.
How DockingWare does it
Every receipt is a ledger row with a timestamp and, for lot-tracked products, a lot identity, so the age of any unit on hand is a recorded fact rather than a guess. Picks are directed to a named location and verified by exact scan, and a count can be reconciled against the receipt history when the wrong pallet was touched. Where the product carries an expiry date, the question stops being age and becomes the date, which is FEFO’s job.
Questions
- Is FIFO an accounting method or a warehouse rule?
- Both, and people confuse them. Accounting FIFO decides which cost leaves the books first. Warehouse FIFO decides which physical unit leaves the shelf first. A warehouse can run physical FIFO under any accounting method.
- Does FIFO require lot tracking?
- Not strictly. A receipt date per location or per pallet is enough to order picks. Lot tracking makes it exact and auditable, and it is what you need the day a recall arrives.
- When should I use FEFO instead?
- Whenever the goods carry an expiry date. FIFO assumes older means less desirable; FEFO knows the actual date and sorts by it.