FIFO (First-In, First-Out) – Prioritizing the Oldest Usable Inventory for Issue, Pick, and Ship

This topic is part of the SG Systems Global regulatory & operations glossary.

Updated October 2025 • Inventory Governance & Traceability • WMS, MES, QA/QP

First-In, First-Out (FIFO) is an inventory control principle that requires the earliest received, qualified stock to be issued, picked, or shipped before newer stock—provided it remains within status, specification, and any applicable expiry or retest date. FIFO minimizes aging, obsolescence, and write-offs; supports predictable shelf-life control; and stabilizes process inputs by preventing “fresh bias” or the silent accumulation of near-expired materials. In regulated manufacturing, FIFO is not a suggestion; it is encoded into procedures, Directed Picking logic, and scan-based interlocks that prevent users from bypassing the oldest suitable lot unless a justified exception is recorded and approved under Approval Workflow. As a governance concept, FIFO spans receipt (dating, labeling, and location assignment), storage (location strategy and segregation), and consumption (issue to order/batch, kit build, pack-out, shipment) with traceability to Batch Genealogy and shipping events (e.g., EPCIS).

“FIFO is not a warehouse preference; it’s a risk control. Either your system enforces ‘oldest suitable first’ or your write-offs and compliance exposure will do it for you.”

Unlike FEFO (First-Expired, First-Out), which sorts by expiry/retest, FIFO sorts by receipt/put-away chronology and then applies suitability filters (released status, correct condition, not reserved, compatible with order attributes). In practice, mature programs combine FIFO with FEFO for life-limited items: the candidate set is “all released, matching items not expired or beyond retest,” sorted by expiry and then by receipt; for items without expiry control (spares, non-critical packaging), pure FIFO is appropriate. Effective FIFO requires accurate barcode identity, disciplined Bin / Location Management, and system-recorded moves; with those in place, audits and mock recalls reconstruct what should have happened and what did happen with minimal ambiguity.

1) What It Is

FIFO governs the sequence of consumption for inventory units with the goal of minimizing dwell time and preventing quality, financial, and service risk that accrues when older stock sits behind newer receipts. Implementation starts at receiving: each lot is uniquely identified and dated, its quality status is set (e.g., quarantine → released after Component Release), and it is directed to appropriate storage by temperature, humidity, or hazard classifications defined in the master data (see eMMR and specifications under Document Control). The WMS maintains a queue of eligible inventory for each item and site and exposes that to Directed Picking so that pick tasks, issue to batch, or pack-out are automatically assigned from the top of the queue. The queue is filtered by lot status (released), hold flags (e.g., suspect supplier change, EM excursion), reservations for specific orders, compatibility attributes (e.g., allergen variant, potency, UDI variant), and environmental constraints. FIFO is then the tie-breaker rule that chooses the oldest among equally suitable candidates, ensuring that the system’s default behavior matches the procedure.

2) Why FIFO Matters in Regulated Supply Chains

For pharmaceuticals, biologics, medical devices, foods, and supplements, FIFO stabilizes inputs and simplifies release/review. Old inventory is inherently higher risk of label changes, spec updates, or condition drift; FIFO reduces the window in which “wrong art,” “superseded spec,” or “expired retest” failures can occur. It reduces waste by cycling stock more predictably and improves customer experience by avoiding mixed-age shipments unless justified. More importantly, FIFO shortens the traceback window in complaints and recalls: by constraining which lots were candidates for issue/ship on a given date, genealogy and EPCIS event history can isolate exposure faster. In food and dietary supplement operations governed by a Food Safety Plan (FSP), FIFO complements FEFO to ensure preventive controls remain effective at the point of use; for devices, FIFO applied to labels and packaging components lowers UDI mismatch and non-scannable risk by avoiding stale template stock. Because release decisions must reference the eBMR and CoA with the actual lots used, FIFO also streamlines review by reducing exceptional justifications.

3) Core Elements of a FIFO Program

Master data & attributes. Define FIFO applicability per item class. For life-limited items, pair FIFO with explicit expiry/retest logic from the specification; for non-critical components, FIFO can remain pure but still respect status/holds. Include compatibility attributes (e.g., allergen variant, grade, potency range) and packaging variants (e.g., label language). Location strategy. Use Bin / Location Management to reduce “honeycombing” and to present the physically oldest stock to pick faces. Racks and pick faces are organized to minimize bypass; deep-lane storage should be configured so loads leave in the same sequence they arrived. Directed Picking & interlocks. Enforce FIFO through system-generated tasks and block ad-hoc picks that violate the queue unless an exception with reason code is opened; require positive scans of item and lot to confirm identity and pick sequence with Barcode Validation. Reservations & Dynamic Lot Allocation. When orders require specific attributes, let Dynamic Lot Allocation choose the oldest suitable stock within the compatible subset, and visibly record any manual overrides. Exception handling. If physical realities (damage, inaccessible pallet, consolidation need) force a departure, the system should capture photos, reason codes, and trigger a Deviation/NC when the risk is material, routing to QA under Approval Workflow.

4) FIFO vs. FEFO and Special Cases

FEFO prioritizes the soonest-to-expire stock, which may not be the oldest by receipt date (e.g., a late receipt with a nearer expiry). In life-limited materials—APIs, reagents, perishable ingredients—FEFO is usually primary, with FIFO as the secondary tie-breaker. For items with retained sample or age-conditioning needs, FIFO prevents premature use of newly qualified lots; for returned goods or reworked lots, FIFO is applied after suitability is restored and documented under Change Control and, where necessary, CAPA. For labels and printed components, FIFO avoids mixed artwork versions by consuming older, still-approved stock first; any superseded art should be hard-blocked and scrapped under Document Control. For medical devices with DHR traceability, FIFO on labels/UDI media minimizes cross-version confusion and dependencies during Batch/Finished Goods Release.

5) Data Integrity & Evidence

FIFO must be provable. That starts with unique lot IDs, attributable scans, and immutable movement history. When records are electronic, apply 21 CFR Part 11/Annex 11 expectations: unique logins, e-signatures with meaning, and secure audit trails for put-away, moves, cycle counts, and picks. Cycle counting should confirm both quantity and age sequence at pick faces. If system-suggested and user-executed picks differ, capture justification and supervisor approval. For inspection and customer inquiries, be able to render the FIFO decision context: candidate list at time of pick, the chosen lot with scans, and any blocked attempts where a newer lot was presented and refused by the interlock—valuable leading indicators that the control is doing work.

6) Common Failure Modes & How to Avoid Them

• Bypass via manual picks. Users select an accessible pallet instead of the oldest. Fix: enforce system-generated tasks, require scans, and hard-block non-FIFO picks without authorized exception.
• Stale stock hidden by location strategy. Deep-lane storage traps old pallets. Fix: configure lanes for FIFO flow-through; periodically re-slot old stock to pick faces.
• Mismatched lot status. “Released” flag lags QMS decision. Fix: integrate Component Release with WMS; block issue until status handshake completes.
• Label/template supersession. Old, still-approved labels used after art change. Fix: treat label stock as controlled; on art change, quarantine old stock and update pick eligibility.
• Reservation collisions. Customer/order attributes reserve younger lots, starving older stock. Fix: visibility of reservations and periodic review to release stale holds or split attributes.
• Data capture gaps. Moves without scans or un-attributable picks. Fix: require scans at each movement; audit login integrity; review audit trails.
• Policy drift. SOP says FIFO; system does not. Fix: align Document Control with system configuration; validate behavior and train users.

7) Metrics That Prove FIFO Is Working

Track average days on hand and age distribution by item; FIFO adherence (percent of picks that consumed the oldest eligible lot); blocked non-FIFO attempts (leading indicator); write-offs due to expiry/obsolescence; reservation aging; cycle count discrepancies that reveal hidden old stock; and mock-recall time-to-trace. Trend by warehouse zone, shift, and item class, and feed outcomes into APR/PQR and CPV where process inputs drive product performance.

8) How This Fits with V5

V5 by SG Systems Global enforces FIFO where it matters—at the point of scan and task execution—so the rule survives real-world pressure. In V5 WMS, Directed Picking presents the oldest suitable lot; attempts to scan newer lots are blocked with actionable prompts and optional exception routing under Approval Workflow. Dynamic Lot Allocation respects attribute filters (allergen, potency, UDI/label language) then applies FIFO inside the subset; Bin / Location logic and task interleaving keep old stock visible at pick faces. In V5 MES, eBMR steps require scans that confirm both identity and FIFO order for issue-to-batch; equipment status and SPC hooks ensure stability downstream. QA sees FIFO adherence, blocked attempts, and exceptions during release; shipping confirms SSCC scans, with EPCIS events captured for rapid trace. All records observe Data Integrity and Part 11 controls, and analytics surface where FIFO is eroding and why.

9) FAQ

Q1. FIFO or FEFO—Which should we use?
Use FEFO for life-limited items, with FIFO as the tie-breaker inside the eligible set. For items without expiry/retest constraints, FIFO is usually sufficient. Your SOP should define which rule applies by item class.

Q2. Can operators override FIFO for efficiency?
Only through documented exceptions with reason codes and approvals. System interlocks should block non-FIFO picks; repeated patterns indicate a layout or slotting problem, not a policy gap, and should trigger Change Control or CAPA.

Q3. How does FIFO interact with reservations and customer attributes?
Reservations restrict the candidate subset; apply FIFO within that subset. Periodically review aging reservations to avoid starving older stock and causing write-offs.

Q4. What evidence proves FIFO during an audit?
Candidate list at time of pick, the selected lot, scan logs, any blocked attempts, exception records, and physical location history. For shipments, SSCC event history and genealogy should reconcile with orders.

Q5. Where should FIFO be validated?
In WMS/MES during performance qualification: scripted scenarios that attempt non-FIFO picks, deep-lane rotations, reservation conflicts, and label/template changes. Validation evidence should include audit-trail behavior and user-role segregation.

Related Reading
• Warehouse & Picking: Directed Picking | Bin / Location Management | Dynamic Lot Allocation | Barcode Validation
• Shelf Life & Release: Expiration & Shelf-Life Control | Batch / Finished Goods Release | CoA
• Traceability & Governance: Batch Genealogy | EPCIS | Data Integrity | 21 CFR Part 11 | Deviation / NC | Change Control