Green Belt in Lean Six Sigma

Thiago has a degree in Production Engineering, a graduate course in statistics and a degree in administration from the Federal University of Juiz de Fora (UFJF). Black Belt in Lean Six Sigma, worked with methodologies for cost reduction and process optimization at Votorantim Metais, subsequently joining MRS Logística as a trainee, where he held positions of manager and specialist in continuous improvement. With Microsoft Office Specialist (MOS) certification and ISO 9001 Auditor Lead Advisor, attended several companies in consulting projects, in addition to training and lectures related to Lean Six Sigma, Career Entrepreneurship in nationally renowned congresses such as ENEGEP (National Meeting of Production Engineering) and international as International Six Sigma Brazil congress. In the academic environment, he works as a professor of undergraduate and graduate courses in the areas of management and entrepreneurship. Thiago had the opportunity to participate in projects of several segments. Founder of the Voitto Group, he was selected in the Promessas Endeavor Program, having the opportunity to receive valuable mentoring to accelerate his business. He is currently a business mentor and dedicates himself to the executive front of Voitto, carrying with his team the vision of being the best online school of management in Brazil.

Founder of Voitto Group, currently a business mentor and dedicated to the executive front of Voitto, carrying with his team the vision of being the best online business school in Brazil.

Discover the main uses of the FIFO system, as well as how to apply it in your enterprise!

What is FIFO? Find out how to improve your logistics!

In times when the production processes must be carried out in an increasingly efficient way, it is evident the importance of planning and managing the inventory flow by the companies, aiming at increasing efficiency and reducing waste. And that is what FIFO is there for.This system was created to control the storage of products in order to evaluate the volume of incoming and outgoing goods.If you are curious to learn more about this system, continue reading this article. In it you will learn:<ul><li> What is FIFO?</li><li>Difference between LIFO, FIFO and FEFO</li><li>Examples of FIFO application</li><li> How to use FIFO?</li><li>Advantages of FIFO</li></ul>Let&#39;s go?<h2>What is FIFO?</h2>FIFO is an acronym for &quot;First In, First Out&quot; and its primary concept is simple: the company must work with queues, in which as the new products are placed in the queue, the old ones are removed, obeying the order of arrival of the items in stock. <Image quality="95" width="564" height="111" src="https://images.prismic.io/voitto-blog/86ea3514-484d-4359-b174-2ba61b5a6228_1.jpg" alt="FIFO process line" title="FIFO process line" /><h2>What is FIFO for?</h2>The name FIFO is an abbreviation of the expression &quot;First In, First Out”. This methodology is generally used by companies that work with perishable products, such as supermarkets, to avoid the loss of products due to expiration, for example.Besides FIFO, there are other ways to plan and manage inventory. Below you will see the difference between them.<h2>Difference between FIFO, LIFO and FEFO</h2>FIFO is not the only system that exists for inventory planning and control. Other methods have been created that can be useful according to the needs of each company, such as LIFO and FEFO. Below we will understand the definition of each one:<h3>LIFO</h3>LIFO stands for &quot;Last In, First Out&quot;. This is an inventory methodology that works in the opposite way to FIFO, that is, the last product to enter the storage should be the first to leave it.This methodology is recommended for companies that work with stocks that do not offer risk of loss due to expiration or obsolescence, for example.The logic of this method allows an increase in the purchase price of the goods from the supplier to be quickly passed on to the consumer, avoiding losses for the company.An example of stock where the LIFO methodology is indicated is the stock of electronics in general, such as TVs and Smartphones since they have no expiration date.<h3>FEFO</h3>This method is directly linked to product shelf life. The acronym FEFO stands for &quot;First Expire, First Out&quot;. The company needs to have control of the validity of the items, and as the expiration date approaches, they must be removed from stock.It is widely used in the food sector, for example, in which the evaluation of product quality is directly related to the shelf life.<h2>Don&#39;t miss out!</h2>It&#39;s time for you to start your training in one of the most valued methodologies on the market!With our <a target="_blank" rel="nofollow" href="https://thinkleansixsigma.thinkific.com/courses/lean-six-sigma-black-belt-upgrade">Green Belt training in Lean Six Sigma</a>, you will develop fundamental skills and knowledge for your professional growth!Our teaching methodology has content such as videos, exercises, complementary readings and personal assistance, so you can take the next step towards Green Belt professional recognition in Lean Six Sigma.Don&#39;t waste time and reach the next level in your professional career!<a target="_blank" rel="nofollow" href="https://thinkleansixsigma.thinkific.com/courses/lean-six-sigma-black-belt-upgrade"> <Image quality="95" src="https://images.prismic.io/voitto-blog/97fe760e-630f-45d0-9d4a-8f9cf76c75ef_Green+Belt+-+Bot%C3%A3o+Banner.png" width="1026" height="206" alt="Green Belt in Lean Six Sigma" title="Green Belt in Lean Six Sigma"/></a><h2>Examples of FIFO Usage</h2>For the use of FIFO, the basic rule is that the oldest products in stock are the first to be delivered to the consumer.As an example, let&#39;s consider that your company resells products:In the month of January, you made the purchase of two lots of product A, with lot 1 purchased on 10/01 and lot 2 on 20/01.If a customer purchases a product on 01/21, he should receive an item from lot 1 (if it is not already sold out), even though lot 2 has already been delivered by the supplier.Only after the exhaustion of the items from batch 1 should the products from batch 2 be issued.Another example can easily be seen in a supermarket, where the products that arrived first at the distribution center are placed at the front of the shelves.This way it is possible to get consumers to buy the oldest items, avoiding problems such as the loss of goods due to expiration dates.How to apply FIFOFor a correct application of the method, there are two basic rules that must be followed and that show the relationship of this system with the Lean Manufacturing methodology:1. No item can overtake another itemThe sequence of the parts must be maintained, no part can overtake another in the queue. In addition, an item that is outside the queue cannot be &quot;slotted&quot; in front of other parts.Imagine yourself in a supermarket queue with 10 people in front of you. Given a constant flow, you can get an idea of how long it will take to be served. Now, imagine that one person &quot;cuts&quot; the line in front of you: your waiting time will certainly be longer.This rule is important to maintain a constant and smooth flow, one of the principles of Lean logistics.2. A maximum capacity must be definedThe second rule for implementing the FIFO method is to clearly define a maximum capacity, above which there is no more space in the queue, and when it is reached, the process must be stopped.The idea of this rule is to avoid overproduction, which is considered as one of the 8 Lean Manufacturing wastes.Advantages of FIFOFIFO controls the volume of incoming and outgoing goods in a company, and this process can generate benefits for several sectors of the company, as we will see below:Accounting easeOn the accounting side, FIFO is useful to facilitate the calculation of the value of the goods stored at a certain time. We bring you an example to make it easier to understand:In week 1, your company purchases 300 items of product A with a unit value of $50.00 (lot 1).VIn week 2, your company acquires another 400 items of product A, but now with a unit value of $60.00 (lot 2).VIn week 3, your company sells 600 items of product A.VIn your inventory, your company has 100 items of product A, but what was the cost of these? Since you use the FIFO system in your company, you know that of the 600 items sold in week 3, 300 came from lot 1, because it is the first to be sold out.Thus, it is easy to see that the 100 items remaining in your inventory come from batch 2.Therefore, the value of your stock is 100 (items) * $ 60.00 (unit value of batch 2) = $ 6,000.00.<h3>Reducing costs and waste</h3>With the FIFO system, you can optimize the storage of goods, since it reduces the need for large inventory spaces. Thus, the related costs fall, which is fundamental for any company.The use of this method facilitates the handling of perishable products and avoids the loss of goods due to expiration date.<h3>Agility</h3>Since FIFO works with a lean material flow, the system prevents overproduction and overfilling of the system, since we have a defined maximum capacity (remember the rules?).This makes it much easier for the company to react quickly and efficiently to variations in demand for its products.<h3>Defined flow of information</h3>Since it is a relatively simple method, you only need to control the first process in the system, while the others are capable of managing themselves. In this sense, the Kanban tool has great value.<h3>Visual Management</h3>It is usually easy to identify a bottleneck in a FIFO system. In addition, the employees themselves may be able to identify some flaw in the system and can correct it before it becomes a critical problem.As we have seen, the FIFO methodology is largely related to Lean Manufacturing, as it has its total focus to avoid waste, this being one of the principles of Lean. Furthermore, Lean Manufacturing enables the use of several tools that can be used to improve various processes in a company, maximizing productivity and increasing revenues.<h2>So, what do you think?</h2>What if you could start your training in the market trend methodology during your break between classes or work hours?How about enjoying now completely free content that Think Lean Six Sigma has prepared for you? unlock the main myths about Lean Six Sigma methodology with the <a target="_blank" rel="nofollow" href="https://conteudo.voitto.com.br/ebook-lean-six-sigma-ultimate-guide">Lean Six Sigma Ultimate Guide Ebook</a>!Download now and understand how to become a Lean Six Sigma professional applying the most used methodology in world-class industries.Deepen your knowledge of the Lean Six Sigma methodology and train yourself now to become a better professional.Click on the image down below to free download the ebook!<a target="_blank" rel="nofollow" href="https://conteudo.pocketbook4you.com/ebook-lean-six-sigma-ultimate-guide"> <Image quality="95" src="https://images.prismic.io/voitto-blog/1950b644-70cf-455d-85fd-0967efc554f4_Bot%C3%A3o+Banner+Cursos+-+TLSS+%286%29.png" width="1025" height="205" alt="Lean Six Sigma Ultimate Guide" title="Lean Six Sigma Ultimate Guide"/></a>

Learn about the FIFO system and its importance for inventory flow management

Learn what the FIFO system is, how to apply it in your organization and discover its relationship with the Lean philosophy!