{"id":12547,"date":"2026-09-07T13:57:42","date_gmt":"2026-09-07T13:57:42","guid":{"rendered":"https:\/\/grupoakoma.com\/?p=12547"},"modified":"2026-10-20T08:25:37","modified_gmt":"2026-10-20T08:25:37","slug":"lifo-inventory-method","status":"publish","type":"post","link":"https:\/\/grupoakoma.com\/en\/blog\/metodo-lifo-almacen\/","title":{"rendered":"LIFO method in warehouse: When to use it and advantages"},"content":{"rendered":"<p>The <strong>LIFO method<\/strong> (Last In, First Out) defines an inventory management system where the last goods to enter the warehouse are the first to leave. Unlike the FIFO system, rotation prioritises the most recent stock.<\/p>\n<p>As a supply chain manager, you know that choosing the incorrect valuation and dispatch criterion leads to unnecessary operating costs. We analyse the real-world operations of this method, its risks and its suitability for industrial warehouses.<\/p>\n<h2>How the LIFO warehouse system works<\/h2>\n<p>The physical flow of goods under LIFO requires a specific arrangement of racking and aisles. Operations are simplified when the loading point coincides with the unloading point.<\/p>\n<h3>Compatible storage systems<\/h3>\n<p>Implementing LIFO requires making the most of cubic capacity. The most common systems are:<\/p>\n<ul>\n<li><strong>Drive-In pallet racking:<\/strong> They allow a single entry and exit. The fork-lift truck driver enters the structure to deposit the pallet.<\/li>\n<li><strong>Push-Back Racking:<\/strong> The pallets slide along trolleys or rails by gravity. When a new one is introduced, it pushes the previous one backwards.<\/li>\n<li><strong>Block stacking:<\/strong> Stable loads stacked directly on top of each other without racking.<\/li>\n<\/ul>\n<h2>Practical example of LIFO in a warehouse<\/h2>\n<p>Imagine a street of shelves <em>drive-in<\/em> with a capacity for four pallets of the same construction material reference, which does not expire:<\/p>\n<ol>\n<li><strong>Monday:<\/strong> pallet A enters and is placed at the bottom of the street.<\/li>\n<li><strong>Tuesday:<\/strong> The pallet B enters, in front of the A.<\/li>\n<li><strong>Wednesday:<\/strong> pallet C enters, in the position closest to the aisle.<\/li>\n<li><strong>Thursday:<\/strong> A pallet order arrives. The cart pulls out pallet C, the last one to enter, without touching A or B.<\/li>\n<\/ol>\n<p>The operation is quick because there is never any need to move pallets to get to another one, and the street does not need intermediate aisles. The price to pay is that pallet A may remain immobilized for weeks or months if the street never completely empties. That is why LIFO only works with homogeneous goods that do not lose value over time.<\/p>\n<h3>LIFO vs FIFO: quick comparison<\/h3>\n<table>\n<thead>\n<tr>\n<th>Criterion<\/th>\n<th>LIFO<\/th>\n<th>FIFO<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Which comes first<\/td>\n<td>The last commodity that enters<\/td>\n<td>The first commodity that enters<\/td>\n<\/tr>\n<tr>\n<td>Type of product<\/td>\n<td>Non-fragile and homogeneous (aggregates, materials, pieces)<\/td>\n<td>With expiration date, lot or season (food, cosmetics, pharmaceuticals, fashion)<\/td>\n<\/tr>\n<tr>\n<td>Common shelves<\/td>\n<td>Drive-in, push-back, stacked in blocks<\/td>\n<td>Conventional, drive-through, gravity dynamics<\/td>\n<\/tr>\n<tr>\n<td>Space utilization<\/td>\n<td>Very high<\/td>\n<td>Medium-high<\/td>\n<\/tr>\n<tr>\n<td>Main risk<\/td>\n<td>Old stock immobilized<\/td>\n<td>It requires more location control<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>If your product requires the opposite criteria, we explain how to implement it in our guide. <a href=\"https:\/\/grupoakoma.com\/en\/blog\/fifo-method-warehouse-logistics\/\">FIFO method in the warehouse<\/a>.<\/p>\n<h2>Operational advantages of the LIFO method<\/h2>\n<p>The main benefit lies in the optimisation of physical space. By reducing manoeuvring aisles, you increase the available storage capacity in square metres.<\/p>\n<p>In sectors with high stock density and rapid turnover of identical SKUs, it speeds up initial placement. You do not need to reorganise the back of the racking to locate new merchandise arriving on the lorry.<\/p>\n<p>To better understand how to optimise workflows in different industries, you can review our experience in <a href=\"https:\/\/grupoakoma.com\/en\/our-centres\/\">our centres<\/a> logistical.<\/p>\n<h2>Risks and disadvantages to control<\/h2>\n<p>The main critical point of the LIFO method is the obsolescence of old stock. The pallets located at the back of the structure can remain immobilized indefinitely if rotation is not perfect.<\/p>\n<h3>The impact on accounting and taxation<\/h3>\n<p>In terms of inventory valuation, LIFO assumes that the most recently costed units are the first to be sold. This directly affects the calculation of gross margin depending on the inflationary context. However, international accounting standards such as IFRS limit or prohibit its financial use because they do not reflect the actual cash flow in many industrial sectors.<\/p>\n<p>If you manage goods with a strict expiry date, as happens in the <a href=\"https:\/\/grupoakoma.com\/en\/food-logistics\/\">Food logistics<\/a> or in environments regulated by <a href=\"https:\/\/grupoakoma.com\/en\/blog\/iso-22716-complete-guide\/\">ISO 22716 standard<\/a>, LIFO is strongly discouraged compared to the FIFO method.<\/p>\n<h2>When should you use LIFO in your supply chain?<\/h2>\n<p>This system proves efficient under very specific conditions:<\/p>\n<ul>\n<li><strong>Homogeneous raw materials:<\/strong> Bulk products, minerals or aggregates that do not degrade over time.<\/li>\n<li><strong>No expiration date:<\/strong> Durable goods with no best-before date.<\/li>\n<li><strong>Critical space optimisation:<\/strong> Warehouses where the cost of a square metre forces maximum vertical and horizontal space utilisation.<\/li>\n<\/ul>\n<p>In practice, many companies combine both criteria according to the product family. An operator with <a href=\"https:\/\/grupoakoma.com\/en\/warehousing-and-integral-logistics\/\">Integrated storage and logistics services<\/a> You can assign each reference its location and its output rule from the warehouse management system (WMS), without having to invest in your own shelves.<\/p>\n<p>If your operatives handle complex goods or you require advice on specific workflows, you can contact our team via the page of <a href=\"https:\/\/grupoakoma.com\/en\/contact\/\">contact<\/a> to study your case.<\/p>\n<p><!-- akoma-cta-blog --><\/p>\n<div class=\"akoma-cta-blog\" style=\"background:#F0F5FA;border-left:5px solid #0F7690;border-radius:14px;padding:24px 26px;margin:36px 0;font-family:'Inter Tight',sans-serif\">\n<p style=\"margin:0 0 6px;font-size:12px;font-weight:700;letter-spacing:.08em;text-transform:uppercase;color:#0F7690\">Grupo Akoma \u00b7 Warehousing in Barcelona<\/p>\n<p style=\"margin:0 0 10px;font-size:20px;line-height:1.3;font-weight:700;color:#14232b\">Need pallet storage in Barcelona?<\/p>\n<p style=\"margin:0 0 16px;font-size:16px;line-height:1.55;color:#33434c\">Pallet storage in the Vall\u00e8s area with over 73,000 m\u00b2, batch and expiry control and a WMS connected to your ERP. From 100 pallets per month.<\/p>\n<p><a href=\"https:\/\/grupoakoma.com\/en\/pallet-storage\/\" style=\"display:inline-block;margin:4px 8px 4px 0;background:#0F7690;color:#ffffff;border:2px solid #0F7690;padding:11px 22px;border-radius:999px;font-weight:600;text-decoration:none;font-size:15px\">See pallet storage<\/a><a href=\"https:\/\/grupoakoma.com\/en\/logistics-operator-barcelona\/\" style=\"display:inline-block;margin:4px 8px 4px 0;background:#ffffff;color:#0F7690;border:2px solid #0F7690;padding:11px 22px;border-radius:999px;font-weight:600;text-decoration:none;font-size:15px\">Logistics provider in Barcelona<\/a><\/div>\n<h2>Frequently asked questions<\/h2>\n<h3>What does the acronym LIFO stand for?<\/h3>\n<p>It corresponds to Last In, First Out. It indicates that the last unit received is the first one to be dispatched from the warehouse.<\/p>\n<h3>Is it legal to use LIFO for financial accounting?<\/h3>\n<p>International Financial Reporting Standards (IFRS) do not permit the use of LIFO for inventory valuation in financial statements because it can distort the true value of accumulated stock.<\/p>\n<h3>What is the difference between FIFO and LIFO?<\/h3>\n<p>FIFO (First In, First Out) issues the oldest stock first, ideal for perishables. LIFO prioritises the newest stock, focused on maximising storage density in non-perishable products.<\/p>\n<h3>Which racking systems are required to apply LIFO?<\/h3>\n<p>Mainly Drive-In pallet racking, Push-Back dynamic systems and direct floor block stacking are used.<\/p>","protected":false},"excerpt":{"rendered":"<p>\ud83d\udce3 M\u00e9todo LIFO en almac\u00e9n: Cu\u00e1ndo usarlo y ventajas<\/p>\n<p>El m\u00e9todo LIFO (Last In, First Out) define un sistema de gesti\u00f3n de inventario donde la \u00faltima mercanc\u00eda que entra en el almac\u00e9n es la primera en salir. A diferencia del sistema FIFO, la rotaci\u00f3n prioriza el stock m\u00e1s reciente. Como responsable de supply chain, sabes que elegir el criterio de valoraci\u00f3n y salida incorrecto genera costes operativos innecesarios. Analizamos&#8230;<\/p>\n<p>\ud83d\udc49 M\u00e1s informaci\u00f3n: https:\/\/grupoakoma.com\/blog\/metodo-lifo-almacen\/<br \/>\n\ud83d\udccc Categor\u00eda: Blog<\/p>","protected":false},"author":1,"featured_media":12549,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"_mbp_gutenberg_autopost":false,"footnotes":""},"categories":[12],"tags":[],"class_list":["post-12547","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>M\u00e9todo LIFO en almac\u00e9n: qu\u00e9 es, ejemplo y cu\u00e1ndo usarlo<\/title>\n<meta name=\"description\" content=\"M\u00e9todo LIFO en almac\u00e9n: c\u00f3mo funciona, un ejemplo pr\u00e1ctico, estanter\u00edas compatibles y cu\u00e1ndo conviene frente a FIFO. 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M\u00e1s de 350 profesionales y cuatro centros log\u00edsticos propios en el Vall\u00e8s gestionan almacenaje, picking y packing, copacking y transporte para empresas de cosm\u00e9tica, parafarmacia, alimentaci\u00f3n, textil y editorial.\",\"sameAs\":[\"https:\\\/\\\/grupoakoma.com\\\/sobre-nosotros\\\/\"],\"url\":\"https:\\\/\\\/grupoakoma.com\\\/en\\\/author\\\/equipo-akoma\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"LIFO method in a warehouse: what it is, example, and when to use it","description":"LIFO method in the warehouse: how it works, a practical example, compatible shelves, and when it is advisable versus FIFO. 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