First in, first out, FIFO is an Inventory Management Methodology used by manufacturing businesses to prioritize the use, production, selling, management, and disposal of first-acquired assets or products in inventory. This methodology is popular in different manufacturing verticals including healthcare manufacturing. In the Medical Product business, the methodology holds great significance due to the shelf life of raw materials used in development.  

Being a Lean Six Sigma Medical Device Manufacturing organization it’s important to adopt strategies that reduce wastage. The FIFO inventory management system helps in reducing wastage and maintaining a proper workflow.  

Key Aspects of First In First Out  

First In, First Out is a cash flow assumption process to maintain the track of inventory and lower the dollar value. In manufacturing, the cost associated with a product at later stages is classified as an expense. The methodology is one of the most popular methodologies for Inventory Management globally. It is easier to understand and transparent. It lowers the impact of inflation as the cost of buying new assets will be higher than the one lying in the inventory. It also helps in managing the obsolescence & shelf life of the product. Most manufacturing companies use the FIFO Methodology to maintain their cash flow. In some countries, it is mandatory while in others most companies opt for it due to comprehensibility and ease. 

Benefits of FIFO in Medical Device Manufacturing 

  • Easy to monitor  
  • Easy to understand  
  • Easy to implement 
  • Based on the natural flow of the inventory  
  • Keeps the pricing of raw materials stabilized  
  • Reflects the current value of the inventory  

Best Practices to Implement FIFO in Medical Device Manufacturing  

1.) Use an accounting software 

Refrain from using conventional ways of pen-paper accounting. Make sure your organization has advanced accounting software. This helps in compiling information better without missing important details.  

2.) Maintain transparency  

Communicate with project managers to understand the inventory timelines and project priorities.  

3.) Monitor the type of inventory flow  

Every organization has a different product. In Medical devices, the components and parts have a shelf life. While using the FIFO methodology the first – raw materials are used first and the last entered material are used last. This helps in managing component obsolescence.  

4.) Set Timelines  

Set realistic timelines and maintain records accordingly. Missing timelines of entries and exists of raw materials, goods, etc. can dissolve the whole purpose. 

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  • Our team has specially trained experts for the diversity of healthcare and medical devices 
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