What is the FIFO Method in Warehouses?
First In, First Out (FIFO) is an inventory management principle widely used in warehouse operations.
A warehouse cycle count is a systematic, periodic process of counting a small subset of inventory on a continuous or regular schedule, rather than performing a full physical inventory count of all items at once. Instead of shutting down operations to count everything at the end of the year, cycle counting involves selecting
A warehouse cycle count is a systematic, periodic process of counting a small subset of inventory on a continuous or regular schedule, rather than performing a full physical inventory count of all items at once. Instead of shutting down operations to count everything at the end of the year, cycle counting involves selecting specific SKUs, bins, or product categories to count daily, weekly, or monthly. The goal is to ensure ongoing accuracy of inventory records, identify discrepancies early, and maintain smooth warehouse operations without the significant disruption of a complete annual inventory check.
Description:
In this approach, inventory items are classified into A, B, and C categories based on their value, usage, or importance—often as determined by ABC analysis. “A” items are high-value or fast-moving and are counted more frequently than “B” items, which are in turn counted more frequently than “C” items.
How it Works:
Ensures that the most critical items receive the highest attention, improving overall inventory accuracy where it matters most.
Description:
A control group method involves repeatedly counting the same small group of SKUs to identify systemic errors in counting methods or data integrity. By using the same set of items as a benchmark, the warehouse can fine-tune its counting processes over time.
How it Works:
Helps improve the overall counting process, reduces systemic errors, and validates that counting methods and team training are effective.
Description:
Counting occurs in response to specific triggers or exceptions rather than on a set schedule. Examples include when a certain product’s on-hand quantity hits zero, after processing a large outbound order, or following a known discrepancy or unusual transaction.
How it Works:
Targets problem areas promptly, ensuring that anomalies are caught and corrected as soon as they appear.
Description:
A simple approach involves counting specific areas or product lines on a regular schedule (e.g., every Tuesday one aisle is counted, every first week of the month all SKUs starting with a certain letter are counted). Counts are randomized or scheduled to cover the entire inventory over a set time frame.
How it Works:
Simple to implement and ensures all inventory is eventually counted, though it may not differentiate based on value or importance.
A mid-sized e-commerce company sells a wide variety of products: electronics, apparel, and home goods. With thousands of SKUs and fluctuating seasonal demand, the warehouse can’t afford to shut down for a full physical inventory. Yet, maintaining accurate stock levels is essential for quick order fulfillment and customer satisfaction.
Warehouse cycle counting is a strategic, continuous inventory management approach designed to maintain accurate stock records, prevent supply chain disruptions, and improve operational efficiency. By counting select items regularly and adjusting frequency based on their importance, warehouses can sustain high levels of accuracy without halting operations, ultimately enhancing service quality and profitability.
First In, First Out (FIFO) is an inventory management principle widely used in warehouse operations.
ABC analysis is a widely used inventory categorization technique rooted in the Pareto principle (the
Palletization refers to the method of stacking, storing, and transporting goods on pallets—flat, sturdy