FIFO, FEFO, LIFO: What is the meaning?

Recommendation

4/5 October 2023

The GDP Compliance Manager - Live Online Training

FIFO, FEFO and LIFO are the three main strategies for warehouse management. But what do the three abbreviations actually stand for and what exactly do they 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The no longer valid Guidelines on Good Distribution Practice of Medicinal Products for Human Use (94/C 63/03) required "a system to ensure stock rotation ("first in first out")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 Expire First Out

FEFO is to ensure that product with the shortest expiry date is placed into 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 (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 is stated 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."

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 says 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."