Warehouse operation details

In today’s fast-paced world, “quick fulfillment” has become the mantra for every business across all industries. With increasing competition and rising customer expectations, retailers, suppliers, and distributors are constantly seeking solutions for the most efficient warehouse storage.

What is a warehouse?

A warehouse is a facility for storing goods. Regardless of the industry they serve, all warehouses follow the principle of inbound – storage – outbound, meaning products come in, are stored, and then shipped out.

Warehousing operations require a specific strategy. There can be several warehousing solutions such as FIFO, FEFO, LIFO,… But always choose the solution that suits your business operations. Regardless of the type of solution, choosing the right shelving system for your storage needs is an essential factor to consider. Give yourself some storage requirements and the type of shelving you want to come to Viet POS Rack so our staff can advise you on the most suitable shelving type. If you need to buy warehouse shelves, please contact us immediately via hotline: 0796 700 777.

You need to know: Selective industrial pallet racking system

Warehousing Solutions

Let’s take a look at some warehousing solutions and their benefits for warehouse operations.

1. FIFO – First In First Out

This is the most common storage solution applied in many warehouses. FIFO stands for First In First Out. The oldest goods are moved out first, and the newest inventory remains stored until the old ones are moved out. The FIFO strategy is used for products with expiration dates/shelf lives. Items such as batteries, beauty products, etc., all need to move quickly.

The FIFO process will help improve overall warehouse operations. Therefore, regardless of the shelf life of the product, FIFO can be implemented by carefully aging inventory using one of the methods below.

– Expiration date: If the product has a defined expiration date, use this to organize inventory. Dates allow for easy identification of older products.

– Sequential pallet arrangement: FIFO is easily implemented for undated inventory; by attaching sequential license plates to storage pallets as they enter the system. With this method, older pallets will receive lower sequential IDs; and therefore will be moved out first.

– Batch control: Similar to license plates, all pallets received on a given day can be grouped with a batch tag. Batch tags can be pre-printed with barcodes; and used on all products (not necessarily packaged) received on a specific day. Groups can be aged by date received

As mentioned, implementing any warehouse system requires careful strategy. Implementing FIFO also requires some considerations as follows:

• FIFO requires an efficient racking system so that older items can be easily retrieved. Choosing the right racking manufacturer solves half the problem.
• Stacking pallets is essential for a successful FIFO solution. New pallets must not be stacked on top of old pallets. This method will require significant effort to move old pallets first.
• The most important thing is to clearly label products and pallets; so that operators can easily identify old inventory.

This solution helps us avoid your inventory from becoming obsolete by shipping the oldest items first.

2. FEFO – First Expired, First Out

This is similar to FIFO. In this system, products that expire first are shipped first. The FEFO strategy is often considered for products with a short shelf life. Most food warehouses use this strategy to maintain the freshness of their inventory. The pharmaceutical and food industries take advantage of the FEFO strategy

3. LIFO – Last-In, First-Out

In this strategy, products that have recently entered the warehouse will be shipped first. This is used for non-perishable products such as bricks, sand, etc. LIFO allows operators to match costs with recent revenues. When your production costs are increasing, this is an excellent method. For example, the most recent products have increased production costs. If you sell those products at prices produced in the past, you will see low production costs and high profits. This is because you are working with outdated information that is different from the actual information at the present time. Therefore, using LIFO, you will have more updated and accurate information about your revenue, costs, and profits.

Regardless of the storage strategy followed, it is important to choose the right type of storage system to effectively utilize space. This is an important thing that we always want you to know.

Learn more here:

– What is a warehouse mezzanine floor system?

– Benefits of FIFO pallet storage

– How to optimize warehouse space?