What is the LIFO (Last-In-First-Out) Warehouse Management Method

The LIFO (Last-In-First-Out) warehouse management method along with the FIFO (First-In-First-Out) method is a tool that is widely used in warehouse management.

The LIFO method is the opposite of the FIFO method since the last unit to be loaded into the rack will be the first one out. The LIFO method prioritizes the last product rather than the first.

When is the LIFO method used?

The LIFO methods is utilized when the product that is being stored is homogenous, does not lose value over time or is does not have an expiry date.

Some example products that are stored using the LIFO method are building materials such as glass, ceramics and stones. 

However, it is more advisable to use the FIFO method whenever possible even with homogenous products as it generates more efficient stock turnover and it is allows to move the products with the oldest storage date even for homogenous products.

Benefits and Advantages of the LIFO Method

• Reduction in distance traveled by operators: Since the forklift drivers have direct access to the last pallet that was stored, this results in less movement of the pallets from one area to the other.
• Higher occupancy rate: This is achieved since only since one aisle is used for loading and unloading.

Which Racking Systems Allow For LIFO Method?

The below racking systems allow for the LIFO method to be utilized:

• Drive-In Racking: The drive-in racking only allows the forklift driver to enter the aisle from one side, which allows for the LIFO method to be utilized rather than FIFO. The warehouse density is higher since the additional aisles that are utilized in the FIFO method are removed.
• Automated Shuttle Racking: The automated shuttle racking is a versatile system that allows for both the LIFO and FIFO method to be utilized depending on the requirements and design being utilized. For the LIFO method to be utilized in the automated shuttle racking, goods are loaded and unloaded from the same side of the aisle. Extra aisles can be removed which results in higher density storage that when FIFO method is utilized.

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