How to implement the right Picking Strategy (FEFO & FIFO)

Last updated: September 4, 2025

This article covers different picking strategy supported by

In modern warehouse management, inventory control is key to avoiding losses, ensuring operational efficiency, and meeting customer demands. Two critical strategies that help streamline warehouse operations are FEFO (First Expired, First Out) and FIFO (First In, First Out). Both methods ensure products move through the supply chain effectively, but they are used for different types of goods and objectives. Here, we’ll explore both strategies in detail and provide insights into how they can be implemented to improve your warehouse management.

Understanding FEFO (First Expired, First Out)

FEFO is a picking strategy designed specifically for perishable items or products with a limited shelf life, such as food, pharmaceuticals, and cosmetics. The goal of FEFO is to ensure that items closest to their expiration date are picked first. This minimizes the risk of products expiring before they are sold or consumed, reducing waste and maximizing the usability of inventory.

Key Benefits of FEFO:

  • Waste Reduction: By always selecting products with the earliest expiration date, warehouses reduce the amount of expired or unsellable stock.

  • Compliance: For industries like pharmaceuticals or food, there are strict regulations regarding expiration dates. FEFO helps warehouses maintain compliance with these regulations.

  • Inventory Accuracy: FEFO ensures that older items are used before newer stock, which helps maintain accurate inventory levels and improve stock turnover rates.

How to Implement FEFO:

  1. Labeling and Tracking: Ensure all items are labeled with expiration dates. Use warehouse management software (WMS) that tracks these dates to make picking decisions.

  2. Automated Alerts: Use systems that provide real-time alerts when an item is nearing its expiration, so it can be prioritized in picking.

  3. Layout Optimization: Store items in a way that makes those with closer expiration dates easily accessible to pickers.

Understanding FIFO (First In, First Out)

FIFO is another essential picking strategy, commonly used for non-perishable items or goods that do not have expiration dates but may still need rotation to avoid long storage times. In FIFO, the first items to be received into the warehouse are the first to be picked and shipped out. This method ensures that older inventory moves out first, preventing overstocking and maintaining product quality.

Key Benefits of FIFO:

  • Prevents Obsolescence: FIFO helps prevent older stock from becoming outdated or obsolete, especially important for products with long but finite shelf lives.

  • Improved Stock Rotation: The method ensures a smoother flow of inventory, maintaining freshness and relevance, even for non-perishable items like electronics or apparel.

  • Warehouse Organization: FIFO encourages a more organized storage system where items are arranged in a manner that supports efficient picking, minimizing errors and delays.

How to Implement FIFO:

  1. Date-Based Storage: Store products in a way that allows the oldest items to be accessed first. This may involve setting up racks or zones where items are organized by their receiving date.

  2. Real-Time Inventory Tracking: A WMS with advanced inventory tracking capabilities is essential for managing FIFO, ensuring that items picked match the chronological order of their arrival.

  3. Cycle Counting: Regularly conduct inventory cycle counts to ensure that items are being picked in the correct order and that no old stock remains unsold.

Real-World Applications of FEFO and FIFO

  1. Food and Beverage Industry: For industries that deal with perishable products like dairy, meat, and beverages, FEFO is crucial to ensure freshness and prevent product expiration. This method ensures that the products closest to their expiry are shipped to customers first, minimizing waste and meeting health regulations.

  2. Pharmaceuticals: FEFO plays a pivotal role in pharmaceuticals where drugs must be consumed before their expiration. FEFO picking ensures that expired or near-expired drugs do not remain in stock or get shipped to customers.

  3. Retail and E-Commerce: In industries with large amounts of inventory, like retail and e-commerce, FIFO is often employed to manage fast-moving items. This ensures that the oldest stock is sold first, preventing overstocking and preserving product quality.

  4. Manufacturing: For industries that deal with raw materials or components, FIFO ensures that materials used in production follow a logical sequence, reducing obsolescence and maintaining consistency in product quality.

Conclusion

Both FEFO and FIFO picking strategies offer significant benefits to warehouse management by ensuring product freshness, reducing waste, and optimizing stock rotation. FEFO is best suited for perishable goods with limited shelf life, while FIFO works effectively for non-perishable goods that still require timely movement through the supply chain. By implementing these strategies effectively, businesses can maintain a well-organized, efficient, and compliant warehouse environment.

Choosing the right picking method will depend on your product types and warehouse operations. However, using a combination of these strategies can ensure smooth inventory flow, reduced waste, and improved customer satisfaction.