FIFO, LIFO and FEFO: differences and when to use each method.

Good stock management involves more than simply knowing how many products you have in storage. You also need to establish the order in which they should leave the facility, especially when handling food, raw materials or other products that may deteriorate or lose their properties over time.

The FIFO, LIFO and FEFO systems use different criteria to organise stock rotation. Although each follows a different principle, they all aim to simplify inventory control and adapt product dispatch to the needs of each storage facility.

Understanding the differences between them helps you choose the most suitable system based on the type of goods, their expiry date, and the characteristics of the facility.

What are inventory management systems?

Inventory management methods establish a criterion for deciding which products should leave the storage facility first. This helps maintain an orderly stock rotation and prevents problems such as an accumulation of older goods, losses caused by expired products or inefficient use of the available space.

The right choice depends on the type of product in storage. Perishable food requires a different approach from materials with no expiry date.

The best-known systems include:

• FIFO (First In, First Out): the first product to enter is the first to leave.
• LIFO (Last In, First Out): the last product to enter is the first to leave.
• FEFO (First Expired, First Out): the product with the nearest expiry or use-by date leaves first.

How does the FIFO method work?

The FIFO system follows a quite simple principle: products that have spent the longest time in storage should leave or enter use before more recent arrivals.

For example, if a storage facility receives one batch of food on Monday and another on Thursday, staff position the Monday batch so that they can remove it first. They place the new goods behind it or in another position where they will not obstruct the removal of the older stock.

This method works particularly well for products with a limited shelf life and supports continuous stock rotation. For this reason, food storage facilities, cold rooms, professional kitchens and other areas that handle time-sensitive goods commonly use it.

To apply it correctly, the storage layout must provide access to products in the order in which they arrived. Properly arranged cold room shelving, for example, can help keep batches organised, visible and accessible.

What does the LIFO method involve?

The LIFO (Last In, First Out) method works in the opposite way to FIFO: the last product placed in storage leaves first.

This physical system can work well in certain storage facilities where goods are stacked or arranged so that the most recently added items remain directly accessible. Staff therefore do not need to move the existing stock whenever they add or remove goods.

However, this system has a significant limitation when it comes to perishable products. If older batches remain in storage for too long, the risk of deterioration or expiry increases.

For this reason, LIFO generally makes more sense for non-perishable products, materials with a long service life or goods whose age does not affect their use.

What is the FEFO method and when should you use it?

The FEFO (First Expired, First Out) method prioritises the expiry or use-by date. The product that expires first must leave first, regardless of when it entered the storage facility.

Imagine that a batch received this week will expire in two months, while an earlier batch has a later expiry date. Under FEFO, staff should use the batch received this week first.

This criterion provides greater control over products with different expiry dates and reduces losses from goods that are no longer suitable for use or sale.

Sectors where FEFO is essential.

FEFO plays a particularly key role in sectors that handle perishable products or need to monitor shelf life accurately.

The food industry provides one of the clearest examples, especially in cold rooms, food storage facilities and preparation areas. The pharmaceutical and cosmetics sectors also commonly use this method, as accurate expiry-date control is essential in both.

In these environments, the rotation method must work alongside a suitable food storage system that makes it easy to identify, separate and access different batches.

Differences compared with FIFO

The main difference lies in the criterion used to decide which product leaves first.

FIFO uses the date of receipt, while FEFO uses the expiry date.

In many situations, both criteria produce the same result because products received earlier also tend to expire sooner. However, this does not always happen. Different batches may arrive with different expiry dates, in which case FEFO prioritises the product that needs to leave more quickly.

FIFO, LIFO and FEFO comparison

The following table summarises the differences between the three systems:

Advantages and disadvantages

The FIFO method is easy to understand and apply, encourages orderly stock rotation and reduces the accumulation of older products. However, the storage layout must provide easy access to the first units placed in storage.

The LIFO method can simplify handling when the most recently added products are the easiest to reach. However, it is not advisable when the age or expiry date of the goods affects their use.

The FEFO method gives you greater control over perishable products and helps reduce losses caused by expiry. However, it requires accurate monitoring of each batch's expiry date.

Which method should you choose for each type of storage facility?

No single method suits every facility. Your choice should consider the characteristics of the product and its rate of rotation.

Storage facilities that manage non-perishable goods can use a more flexible system and may even adopt LIFO when the physical layout makes it practical.

FIFO often works particularly well when storing food or products with constant turnover. If batches have different expiry dates, FEFO enables even more precise stock management.

In addition to choosing the right criterion, the layout and equipment must make it easy to access and identify products and rotate them correctly.

FIFO, LIFO or FEFO: choosing the right method for each product

Each inventory management method serves different needs. FIFO prioritises the age of the stock, LIFO makes the most recently stored units the first to leave, and FEFO focuses directly on the expiry date.

In food facilities, where hygiene, preservation and stock rotation are especially important, an organised storage area helps reduce waste and makes everyday work easier. Choosing the right method and using equipment that keeps products orderly and accessible are essential for efficient stock management.

At Decoplastic, we develop PVC storage solutions for professional environments. Our durable, hygienic and easy-to-maintain equipment keeps products organised and supports efficient stock management.