Supply Chain
Supply Chain Update - July 2025
Updated July 21, 2025
How FIFO Maximizes Inventory Management
In the dynamic world of inventory management, businesses constantly seek efficient methods to track, value, and move their goods. Among the most fundamental and widely used approaches is FIFO, an acronym for "First-In, First-Out." This principle dictates that the oldest inventory items in stock are the first ones to be sold or used, mirroring the natural flow of goods in many industries.
- When a company receives inventory, it creates a new "layer" with the cost and quantity.
- As inventory is used or sold, the system consumes from the oldest layer first.
- The cost of goods sold reflects the cost of the earliest inventory.
Understanding and properly implementing FIFO is crucial for optimizing operations, maintaining product quality, and accurately reflecting a company's financial health.
- Minimizes Waste and Spoilage: Older stock is sold first, businesses reduce the risk of products expiring before they reach the consumer.
- Ensures Product Quality: FIFO ensures older seasonal items are moved before they become outdated.
- Promotes Product Safety: Prevents the distribution of expired goods.
Careful, accurate inventory management allows Chadwell Supply to consistently deliver what our customers need when they need it. That’s one reason why our fill rate, which measures how often we get everything delivered on the first order, remains one of the best in multifamily supply.
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