When we think of warehouses, many people imagine a space filled with various products. You picture items neatly arranged on shelves, staff packing goods, and machinery used for various functions. However, an important aspect that is often overlooked is the system of stock picking or inventory management, which ensures everything is well-organized and efficient. Poor handling of stock picking or inventory management can lead to delays or damage to products, affecting the entire operation and potentially harming the organization's reputation.

Inventory management and stock picking principles are crucial in warehouse operations, retail stores, and any business dealing with inventory. There are various methods suited for different types of products. CPLINTER would like to share useful information on the principles of inventory management, focusing on FIFO, LIFO, and FEFO.

FIFO, or First In, First Out

FIFO is a method where the first products to enter the warehouse are the first to be distributed. This method is ideal for products with limited shelf lives, such as food, beverages, pharmaceuticals, and other perishable goods. FIFO helps prevent the degradation of items that have been stored for a long time and ensures that products reaching customers are fresh. It is also easier for accounting departments to manage since the cost of inventory matches the cost of goods sold, making it easier to calculate monthly profit margins. FIFO is internationally recognized and commonly used.

LIFO, or Last In, First Out

LIFO is the opposite of FIFO. The most recently added products are the first to be distributed. LIFO is suitable for products with raw materials or limited shelf life, such as chemicals. It helps businesses keep production costs up to date with the current market value, and it can be used to reduce taxable profits. However, it may involve more complex documentation and accounting practices compared to FIFO.

FEFO, or First Expire Date, First Out

FEFO is a method where the products with the earliest expiration date are distributed first. This method is ideal for items with a clearly defined expiration date, such as fresh food, medicines, and pharmaceuticals. FEFO helps reduce the risk of delivering expired goods to customers, which is critical for maintaining customer satisfaction and legal compliance. It is one of the easiest and most popular inventory management methods.

Each inventory management method—FIFO, LIFO, and FEFO—has its own advantages and disadvantages. The choice of method depends on factors such as product type, business requirements, and tax considerations. It is important for business owners to consider these factors when deciding which system to use. CPLINTER offers comprehensive logistics services, including international shipping by air, land, and sea, along with packaging, document preparation, and customs clearance. Our services make it easier for businesses to manage imports and exports efficiently. For inquiries, please contact CPL at 02-519-4426 or 091-519-4426. You can also reach us via Line @cplinter or visit www.cplinter.com for more information.