What Is FIFO Method and How to Use It to Deliver on Your Commitments

Hey there! My name is Sonya Siderova, founder & CEO at Nave. I help managers make reliable delivery commitments and hit their targets consistently, all while growing happy, engaged and motivated teams! Today, we’ll explore what FIFO is, how the FIFO method is used in Kanban and we’ll reveal the tremendous impact it can have on your performance.

Did you know that almost one-third of all food produced for human consumption is wasted every year? For many of us, food waste has become a habit: buying more food than we need, letting fruits and vegetables spoil at home or taking larger portions than we can eat.

These habits put extra strain on our natural resources and damage our environment. What bothers me the most though, is that when we waste food, we waste the labor, effort, investment and precious resources (like water, seeds and feed) that go into producing it.

We should break this vicious behavior. In fact, there is a very simple way to get started.

What Is FIFO Method?

So how can we reduce the waste of food at home? Here is my best advice: get a labrador. Or even better, get two of them! 😁🐕🐾

Now, if you’re not a dog lover, I still have a solution for you and it’s called the FIFO method. FIFO stands for First-In-First-Out. It denotes that the item that enters the system first should go out of the system first as well. Essentially, old items always have a priority over the new ones.

And here is a great example of how to use the FIFO method to reduce food waste.

When you unpack your grocery items, always remember to move older products to the front of your refrigerator and put the new ones at the back. That way, you get to use your older products before they expire instead of keep buying new food.

How simple is that? It certainly made the difference for us (the doggies felt it too, where did all these treats go?!).

Now, you’ll be astonished by how the FIFO method can actually enable you to keep your cycle times consistent and deliver on your commitments just by making a small tweak to your management practices.

How to Use FIFO Method in Kanban

So, how can implementing the first-in-first-out method actually help you deliver results in a consistent predictable manner?

Let’s explore how the concept works in Kanban.

With the FIFO method, every task that goes onto the next process state is immediately placed at the bottom of the column. Then, once a team member has the capacity to handle new work, they pull in the task at the top of the previous column.

A word of caution here! In Kanban, we only apply the FIFO method for work items that are ready to move on to the next state. If an item has been started first but is still in progress, don’t block your team until that first item is finished. Pick the oldest already completed item and move it to your next activity.

Let’s illustrate the concept here.

In this example, we have a Kanban pull system. In a pull system, every process state has a ‘Queue’ and ‘In progress (IP)’ column. ‘Queue’ columns are done states. They are passive, no one works on tasks in the queue states.

So, all tasks in the Queue states are ready to move on to the next process state. For example, in the Development column, item M is still in progress, however items L and N are in the Testing Queue state. Even though M has been started first, it’s not ready to move to Testing just yet.

So, the QA specialists have to choose which item to pick from Testing (Queue). Using the FIFO method, we know that L has been started first (it is positioned on the top of the column). So, L moves on first and N will have to wait its turn.

What Are the Advantages of First-In-First-Out Method on Your Performance?

Introducing the FIFO method as an explicit process policy will stabilize your delivery times by keeping the waiting time in your workflow to a minimum.

By using this approach, tasks are no longer artificially delayed or forgotten, because each work item is processed and begun in the order that it arrived – regardless of its nature or complexity.

Reducing the overall waiting time inevitably leads to improving the predictability of your delivery system. And the more predictable your system is, the more accurate forecasts it will produce.

The size of your work items doesn’t matter. The amount of data you have collected doesn’t matter either. The only prerequisite to coming up with reliable delivery commitments and hitting your targets consistently is to optimize your workflow for predictability. And implementing the FIFO method is just an example of how to get there.

It’s all about taking control of your management practices to ensure you deliver customer value in a consistent manner. That’s all it takes! It all boils down to building predictable workflows.

And today, I’d like to invite you to join me in our upcoming free masterclass 3 little-known mistakes most managers make when building predictable workflows (+ what to do instead). If you’re committed to making this the year you hit your targets consistently, I can’t wait to help you slash that learning curve and see real results, faster.

Here is your action item: Introduce the FIFO method to your team as early as tomorrow morning. Remember, you only change the order of the work items you are working on. It’s as simple as that!

Use your Kanban analytics to track how this initiative affects your cycle times and report the results. You’ll see the tremendous impact this small tweak has on your performance in just a few weeks.

And if you have a colleague or friend who is struggling to deliver on their commitments, do me a favor and share this article with them. It will mean the world to me if you spread the word.

Alright my friend, I hope you found today’s article valuable! I’ll see you next week, same time, same place for more managerial goodness. Bye for now!