FIFO, FEFO, LIFO: What Is The Meaning? - ECA Academy

FIFO, FEFO, and LIFO are the three main strategies used in warehouse management. But what do these abbreviations stand for, and what do they actually mean?

FIFO = First In First Out

FIFO means that products stored first are to be retrieved first.

The no longer valid Guidelines on Good Distribution Practice of Medicinal Products for Human Use (94/C 63/03) required "a system to ensure stock rotation ("first in first out") with regular and frequent checks that the system is operating correctly". Further on it said: "Products returned to saleable stock should be placed such that the 'first in first out' system operates effectively."

FEFO = First Expiry First Out

FEFO is to ensure that products with the shortest expiry date are placed on the market first. This makes it possible to reduce business overheads from wastage and the additional work and cost associated with returns. It also helps to ensure that products reaching end users have sufficient remaining shelf life.

The EU GDP Guidelines for medicinal products for human use ("Guidelines of 5 November 2013 on Good Distribution Practice of medicinal products for human use (2013/C 343/01)") prefer the FEFO principle. In Chapter 5.5. (Storage) it states that "stock should be rotated according to the ‘first expiry, first out’ (FEFO) principle. Exceptions should be documented." According to Chapter 6.3. (Returned medicinal products) "products returned to saleable stock should be placed such that the ‘first expired first out’ (FEFO) system operates effectively."

A corresponding requirement can also be found for active substances in the EU GDP Guidelines for active substances for human medicinal products (“Guidelines of 19 March 2015 on the principles of Good Distribution Practice for active substances for human use (2015/C 95/01)”). Chapter 6.10 states: "There should be a system to ensure stock rotation, e.g. ‘first expiry (retest date), first out’, with regular and frequent checks that the system is operating correctly."

"Commission Implementing Regulation (EU) 2021/1248 of 29 July 2021 as regards measures on good distribution practice for veterinary medicinal products in accordance with Regulation (EU) 2019/6 of the European Parliament and of the Council", Article 24, contains the following requirement: "Stock shall be rotated according to the ‘first expiry, first out’ principle. Exceptions shall be documented."

Similarly, Article 16 of the "Commission Implementing Regulation (EU) 2021/1280 of 2 August 2021 as regards measures on good distribution practice for active substances used as starting materials in veterinary medicinal products in accordance with Regulation (EU) 2019/6 of the European Parliament and of the Council" states: "There shall be a system to ensure stock rotation, such as ‘first expiry or retest date, first out’, with regular and frequent checks that the system is operating correctly."

According to the WHO Good storage and distribution practices for medical products (Annex 7, WHO Technical Report Series 1025, 2020) "Materials and medical products should be stored in conditions that assure that their quality is maintained. Stock should be appropriately rotated. The “first expired/first out” (FEFO) principle should be followed."

LIFO = Last In First Out

Working according to the LIFO principle means that the last goods to be stocked are the first goods to be removed.

LIFO is mentioned in the WHO Good storage and distribution practices for medical products (Annex 7, WHO Technical Report Series 1025, 2020) where it states that "vehicles and containers should be loaded carefully and systematically on a last-in/first-out (LIFO) basis, to save time when unloading, to prevent physical damage and to reduce security risks. Extra care should be taken during loading and unloading of cartons, to avoid damage."