FIFO in the real world
First in, first out simply is a term used to describe a system of using the oldest raw materials before using newer raw materials. This is useful and important for a couple of reasons:
Raw material traceability is the major reason; by controlling what raw materials we use and when we use them we can control the life of that raw material throughout its lifecycle. This is important in most manufacturing organisations and is critical in many. In the event of a recall from the raw material supplier we can recall a smaller quantity of our output if we have good FIFO controls in place. Without these controls we would have to recall a far greater sample of our outputs which will damage not only our financial position but also and more detrimentally it will damage our brand and reputation.
Secondly, many raw materials have a shelf life; with FIFO control we can reduce our wastage, and improve the quality of our outputs by always using the freshest of inputs. This will provide more consistent processes; even for long shelf life raw materials there can often be some deterioration without “going off” this deterioration will have an impact on your process control.
So how do we use FIFO? I’ve seen many different systems used for FIFO, from the very basic to extremes of complexity. Some organisations use software applications for batch control, others rely on their kanban system for stock control. From my experiences there is no real “best method”, but there is best practice (best practice is proven by process measurement). Most of the high performing organisations in FIFO are relying on more simple systems for their FIFO control; simple lanes, card systems, even warehouse matrices over technology. While it is true, software can provide more consistent accuracy, it is very dependent on data entry being accurate and is often removed or away from the place of storage. A simple live system at the place of use and/or storage is the way to go.
Yesterday, I had to go to the doctor; I made an appointment by phone, went to counter and registered on their system, and sat in the waiting room. There were about 5 doctors on duty and about 12 customers in the waiting room. Rather than each free doctor taking the next file in line the doctors were allocated patients as they registered (some were seeing certain doctors others were not). One doctor while I was waiting saw 5 patients (many of these had appointment times after mine), the doctor who I was queued with saw only 2 before me. Some patients were waiting longer than others. Bad FIFO
Today I had to have a blood test at the pathology next door. They don’t take appointments so I walked up to the desk to register but the desk was unattended. Instead there was a simple numbered ticket. I took ticket number 5 and sat down to wait. There were 2 pathologists on duty and 5 of us sitting in the waiting room. Each number was called in turn and the patients seen in the order they arrived. As there were 2 pathologists on duty they serviced the patients in quick time and each patient waited about the same time; if one patient took longer the next pathologist would see the next in line. Good FIFO
Now, I realise in a doctors office there can be emergencies that take precedence and extend the waiting times; and some patients need to see certain doctors, however by assigning the cases early they are inadvertently extending the average waiting time and creating a bottle neck.